The Easiest Way to Invest in Real Estate This Year

Summary

BiggerPockets Real Estate Podcast: "The Easiest Way to Invest in Real Estate This Year"

Release Date: January 8, 2025
Host/Author: BiggerPockets
Host: Dave Meyer
Guest: Ian K. (Producer of the BiggerPockets Real Estate Podcast)

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1. Introduction to Overcoming Investment Hesitation

In the episode titled "The Easiest Way to Invest in Real Estate This Year," hosts Dave Meyer and Henry Washington address a common barrier faced by aspiring real estate investors: the hesitation to take the first step. They aim to help listeners move past their fears and embark on their investment journey.

Dave Meyer starts the conversation by acknowledging that many individuals are eager to invest but find the initial leap daunting. Henry Washington reinforces this sentiment, emphasizing the potential for real estate to build long-term wealth and achieve financial freedom within a decade.

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2. Introducing the Guest: Ian K.

To provide a relatable perspective, the hosts introduce Ian K., the producer of the BiggerPockets Real Estate Podcast, who shares that despite working closely with real estate content, he hasn't yet invested in property himself.

Ian K. explains his background:

"I didn't know anything about real estate before working here. I was into personal finance, primarily the stock market. Real estate never felt like something I had the knowledge or confidence to pursue."
— Ian K., [02:59]

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3. House Hacking: A Viable Starting Point

Dave and Henry delve into house hacking as a practical strategy for first-time investors like Ian. House hacking involves purchasing a multi-family property, living in one unit, and renting out the others to offset mortgage costs.

Ian K. expresses his uncertainty about starting:

"I got sold on real estate as an investment through the shows, but I'm just not sure where to start."
— Ian K., [03:54]

Henry Washington responds by suggesting leveraging one's primary residence:

"The best way to get in this business is by leveraging your primary residence. Get pre-qualified for a home purchase and look for duplexes, triplexes, or quadplexes where you can live in one unit and rent out the others."
— Ian K., [07:28]

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4. Practical Steps and Personal Experiences

The hosts share personal experiences to illustrate the benefits of house hacking. Dave Meyer discusses how purchasing a duplex can significantly reduce living expenses, allowing for substantial savings that can be reinvested into future properties.

Dave Meyer explains the financial mechanics:

"If you're paying $2,000 a month for rent and buy a duplex where you pay $1,000, you're saving $1,000 each month. Over two years, that's $24,000 for a down payment on your next property."
— Ian K., [08:17]

Ian K. adds his perspective on overcoming emotional barriers:

"We lived in New York and always rented, which made it hard to feel settled. But house hacking allowed us to save aggressively without changing our lifestyle drastically."
— Ian K., [19:32]

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5. Addressing Analysis Paralysis

A significant portion of the discussion focuses on analysis paralysis, where potential investors become overwhelmed by choices and information, preventing them from taking actionable steps.

Ian K. voices his struggle:

"The hard part isn't analyzing deals; it's stepping into rooms, meeting investors, and building connections. That aspect gives me more paralysis than the numbers."
— Ian K., [32:01]

Dave Meyer offers a solution by emphasizing actionable steps over exhaustive preparation:

"Don't let analysis paralysis hold you back. Start attending meetups, talk to agents, and immerse yourself in the real estate community. Once you're engaging with others, the path becomes clearer."
— Dave Meyer, [32:57]

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6. Strategies to Overcome Hesitation

The hosts provide actionable advice to help listeners like Ian move forward:

1. Set a Clear Goal and Deadline:

   • Decide on a specific date by which you aim to purchase your first property.
   • Example commitment: "I'm buying a property by Q4 of 2025."

2. Build a Support Network:

   • Attend real estate meetups.
   • Connect with agents, lenders, and other investors who can provide guidance.

3. Take Incremental Steps:

   • Start by touring properties without the pressure to buy.
   • Get pre-qualified for a mortgage to understand your budget.

Dave Meyer emphasizes the importance of a defined plan:

"When you attend meetups with a clear goal, like 'I'm buying a duplex by X date,' you stand out and attract meaningful support from the community."
— Dave Meyer, [35:52]

Ian K. commits to taking these steps:

"I need to start seeing houses in person and talking to agents. It's a big step, but I have to take it."
— Ian K., [41:48]

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7. Conclusion and Accountability

The episode concludes with Ian K. pledging to take concrete actions towards his first investment. His commitment includes:

• Touring Properties: Visiting potential multipurpose homes to understand the market better.
• Networking: Engaging with local real estate investors and professionals.
• Setting Deadlines: Establishing a timeframe to purchase his first property.

Dave Meyer reinforces the importance of accountability:

"By committing to these steps and agreeing to report back, Ian creates a sense of responsibility that will motivate him to follow through."
— Dave Meyer, [41:28]

Ian K. adds humorously:

"You’re going to hear back one way or the other."
— Ian K., [42:36]

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Key Takeaways

• House Hacking is an effective entry point for first-time real estate investors, allowing for reduced living expenses and continued savings.
• Overcoming Emotional Barriers is crucial. Understanding that discomfort is temporary and part of the growth process helps in making strategic investment decisions.
• Actionable Steps like setting clear goals, networking, and taking incremental actions can break the cycle of analysis paralysis.
• Community Support from platforms like BiggerPockets and local meetups provides valuable resources and accountability for new investors.

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Notable Quotes

• Ian K. on Initial Hesitation:
  "I'm sold. I want to get in. I'm just not sure where to start."
  — Ian K., [02:59]

• Henry Washington on House Hacking Benefits:
  "It's a cheat code. It's not as binary as it seems... you can find a really nice place that's also a great investment."
  — Ian K., [21:32]

• Dave Meyer on Taking Action:
  "Don't do meetups from the perspective of wanting to get comfortable before making a decision. Do it from the perspective that you've made a decision to buy a property."
  — Dave Meyer, [35:52]

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Conclusion

This episode of the BiggerPockets Real Estate Podcast serves as a motivational guide for aspiring investors hesitant to take their first step. Through personal anecdotes, practical advice, and a focus on actionable strategies, Dave Meyer and Henry Washington provide listeners with the tools and encouragement needed to embark on their real estate investment journey.

Transcript

[Dave Meyer]

If you know you want to invest.

[Henry Washington]

In real estate, but for some reason you haven't yet pulled the trigger, it's okay.

[Dave Meyer]

Because today we're going to help you get over the hump and get into your first year.

[Henry Washington]

Hey, guys, it's Dave here from Biggerpockets, here with my friend Henry Washington. If you've listened to the last few.

[Dave Meyer]

Episodes of the show, you're probably excited.

[Henry Washington]

I hope you're excited about the possibility.

[Dave Meyer]

Of investing here in 2025.

[Henry Washington]

And we've talked about how real estate.

[Dave Meyer]

Is the best asset class to build.

[Henry Washington]

Long term wealth and eventually achieve financial freedom. And on average, if you start investing today, you can be financially free in 10, 12, 15 years. And we've also talked about why right now is a great time to get into the market and buy a deal based on our economic outlook for the rest of the year.

[Dave Meyer]

But we've also realized that even if.

[Henry Washington]

You agree with me on all of these topics and you're fired up about investing, if you've never bought a property before, you might be hesitant to take the leap because it is a scary proposition to actually become an investor. Henry, tell me. I mean, this is a pretty common scenario, right?

[Ian K.]

I mean, this is a question that people ask literally all the time. They say, I, I want to do this. Like I, I got it. But I, I still don't know what to go do next.

[Dave Meyer]

If people seem to intuitively understand that real estate investing is a great option.

[Henry Washington]

For them, it's just kind of obvious.

[Dave Meyer]

But there is this analysis or hesitance or honestly fear about getting started and we're going to close the gap. Today. We're actually bringing on a potential investor onto the show who's in this exact situation. He also happens to be the producer of the Bigger Pockets real estate show. Ian K. We were actually, the three of us, Henry, Ian and I were planning a show to help people close this gap and Ian was like this, this is me.

[Henry Washington]

I am this person.

[Dave Meyer]

We got to make a show to help me. So we, Henry and I basically bullied Ian into coming onto the show and we're going to talk to him about what's stopping him from getting his first deal. And hopefully we're going to coach him into a position to where he can go out and execute on his first deal in the next couple of months. Henry, I know you're excited.

[Ian K.]

I cannot wait.

[Dave Meyer]

I am also excited. So let's bring Ian on. Ian K. Welcome to your first episode as a guest on the BiggerPockets podcast.

[Ian K.]

Totally different on this side of the camera.

[Dave Meyer]

Yeah, I was going to say I was going to welcome you, but you're here every single time we're recording, so you're already here, but welcome to having a microphone in front of your face.

[Ian K.]

Oh, well, thank you. My greatest fear is not being on the podcast. It's knowing there's nobody else producing the podcast.

[Dave Meyer]

We're flying blind right now. There's no guardrails right now.

[Ian K.]

Hopefully this show makes it on the air.

[Dave Meyer]

Yeah, we'll see. So. So, Ian, tell us just a little bit about your position and what you're hoping to learn and get coached on, I guess, from Henry and I today.

[Ian K.]

I started working at Biggerpockets, producing this show in August. So I've been here about four months. And before that, I didn't know anything about real estate. You know, I. I was into personal finance. Like, I had investments primarily in the stock market. But real estate was never something that felt, you know, I never thought about it. It didn't feel like something I would have any idea how to do it. And then over the course of working on this show and listening to this show, I got sold on it as an investment, you know, especially in the shows that, if you're listening to this now, the last few that have come out are Dave's theory of real estate and his case for why compared to stocks or bonds or crypto or other things you can buy, real estate is a great, great option. I, I believe that, like, I, you know, not just saying it because I work on the show, but the case is convincing. So I'm sold. I want to get in. I'm just not sure where to start.

[Dave Meyer]

Henry, isn't this so validating? Like Ian, who knows? Who actually knows us? And here's the unproduced version of this, the unedited version, still is interested in investing. After knowing both of us, literally everyone.

[Ian K.]

In my life who spends any amount of time around me, I have convinced in some way, shape, form or fashion to do an investment real estate deal. Every single one of my friends who I spend a significant amount of time with has either flipped a house, bought a rental property, or done some sort of real estate deal, all with the exception of one, and I'm working on that one right now.

[Dave Meyer]

That is an impressive track record, but I love that and I'm encouraged by this because I feel the same way. Henry. Everyone wants to get into it. I meet random people and tell them what you're interested. People get the idea of real estate. People inherently understand what a good investment it is, but like Ian, it is somewhat confusing at first if you're just starting out to figure out what steps to take next. So let's jump into that. Henry, you. You seem ready to grill Ian on his. On his position here, so I'm going to just hand it off to you.

[Ian K.]

I do want to cook in here because I feel like one of the first things he asked is, this is something I should be looking at now or something I should be looking at in the future. And, like, it's now. The answer is now, but for the sake of the show and the listeners, because everybody's in a different place. One of the first things that I always want to know about somebody who's thinking about investing is, like, at what level they're thinking about investing. Like, what is it that you're looking to achieve with real estate investing? Because if you see yourself as a person who's going to have a real estate investment business that you're going to scale to some amount of properties larger than maybe, say, 10, then there's probably a different approach that I would tell you to take, or I would tell you to take two approaches at the same time. But if you're somebody that's like, hey, I just want to buy one house a year to, you know, two houses a year, then the approach, I think, would be a little different. So it really just depends. The first thing you have to know is, like, where are you trying to go with real estate investing? What's the goal?

Yeah, well, I put it this way. I'm not trying to do what you do, Henry. Yeah.

[Dave Meyer]

So you're more on my. My end of the spectrum, where you're going to hopefully keep working in, because we need you here. So you're going to say, hey, I'm quitting bigger pockets. That's going to be a problem.

[Ian K.]

Yeah, I'm definitely more. I'd say toward the Dave end of the spectrum. And, like, before I started working here, the concept of, like, financial freedom, this idea of accumulating a certain amount of money, assets to quit your job, like, I never really even heard of that. Like, that's not the angle that I approach this from. I'm approaching this almost from the same angle that, like, I've always approached stock market investing, which is this is generally, like, a good place to put my money. It'll accumulate over time, and it'll put me in a better financial position in the long term. You know, if I could get to a portfolio where I've got four, five, six properties, you know, somewhere Three, four, five years from now, like that would be incredible to me.

I love it because I think there's tons of people in that boat. And to add a little more color context, would you mind sharing with everyone how old you are?

I'm 36 years old.

Okay, 36 years old. Ready to start again? I started when I was 36. Perfect. So what I would say, somebody in your boat, you're already investing in real estate, you're just on the side that pays for it instead of the side that makes money. You're just investing in somebody else's real estate. I assume you're in a house right now.

I am, but this, I don't own this house. I'm just renting it.

Right. So you're in a house and you're renting, which means you're paying to live somewhere, which means you're investing in somebody else's real estate, which is. There's nothing wrong with renting. I don't think there's anything wrong with renting. But you're asking how to get started and when you should get started. I think the best way to get in this business is by leveraging your primary residence. And so if I were you, if I were in your position, I would be getting pre qualified for a home purchase and I would be shopping right now for duplexes, triplexes or quad plexes where you could live in one of the units and rent the other units out. And also for everyone else, you are no kids, right?

That's right.

And significant other. Yes. No.

Yes.

Okay. So I mean, I feel like there's tons of people in this boat, even some who have kids. But maybe in this boat, right. Ideally you can house hack by buying a multi family living in one unit and renting the other units. And that's a fairly easy way to get started because the analysis isn't as tedious. Like if I go buy a multifamily, I gotta find something that's gonna cash flow, hopefully in the first year, Right. Or else it might not make sense for me to invest in that right now. But if you're gonna live in something for a year or two you're not necessarily worried too much about, is it gonna pay me 5, 6, $700 a month in net cash flow? What you're worried about is, is it going to limit my monthly living expenses? Let's say if you're paying $2,000 a month, you go get a multifamily unit and now you're only paying, let's call it, you know, $1,000 a month. Say it cut your cost in half. Well, you still pay $2,000 a month because you're used to it. Don't change your lifestyle, right? You just pay that extra thousand into a Savings account over 12 months and then you'll have $12,000 over 24 months, you'll have $24,000. Now you have a down payment for your next property, right? It just allows you to scale. So you're not adjusting your lifestyle because you don' your next deal, you just save that money and use it to reinvest in your next asset. And I tell everyone, like in your boat, you should buy a duplex and live in it every single year until you or your significant others say, I will never share another wall with anybody else. And the reason I say every year is because your first time, your FHA program, your VA loans, your conventional loans, they're going to require you to live in it for at least 12 months before you can go use that loan product again. Fha, you can only have one, but you can get multiple conventional loans. And so you live in it for 12 months and buy another one. And if you repeated that for two years, you'd have what, four to eight doors, depending on how many you bought in just two years? You know, I think that that alone would probably put you in a significantly better financial position. And you don't have to do much to do that. You don't have to sacrifice much. And you're in a very, very great time of the year to be looking for properties.

[Henry Washington]

Okay, so we do need to take a break, but I first want to tell you about something really cool coming up. It's called Momentum 2025. It's BiggerPocket's Virtual Investing Summit. It starts February 11th and you can join us for an eight week virtual series every Tuesday from 2 to 3:30pm Eastern Time, where we'll dive into all things real estate investing to set you up success here in 2025. I'll of course be there, but I'm also going to be joined by 17 other amazing real estate investors, including Henry Washington, Ashley Kerr, James Danard, and a whole lot more. We're all going to be there sharing our insights on what's happening in the market and how you should make Smart moves in 2025. And it's a really cool program because it's not just about listening. You're actually going to get a chance to meet other investors, match together in small mastermind groups. And this creates a great chance to share ideas to get feedback on your own plans and to have some external accountability. So that's going to be really cool. Alongside the direct access to seasoned pros, you're also going to get tons of bonus resources. By joining, you'll get more than 1200 bucks worth of goodies, including books. You'll get planners discounts for future events. It's really an incredible package. You can register now for Momentum 2025 at biggerpockets.com summit25 that's biggerpockets.com summit25 and if you sign up before January 11, so in just a couple of days you can actually snag a 30% discount on our early bird deals. So you want to make sure to.

[Dave Meyer]

Check that out as soon as possible.

[Henry Washington]

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[Dave Meyer]

Let's get back to the show. So Ian, what'd you house hack?

[Ian K.]

So I think it's a really appealing option. I think I might need Henry to come up here with his whiteboard and give this speech to my significant other.

[Dave Meyer]

What's the, what's the hesitation?

[Ian K.]

It's sort of the idea of like pushing back. Us having a primary that we're going to live in long term and really feel like a home to us. We lived in New York for a long time, so renting was kind of the only option. We've continued renting. We've moved a lot. There is kind of a soft, like not necessarily an economic reason, but more of a soft reason of just feeling settled, feeling like we're in a home that we're going to live in for a long time.

[Dave Meyer]

Yeah, that, that makes sense to me. I think there's economic reasons to buy a primary residence. There are emotional and just, like, stability reasons to do it well. So those make a lot of sense. But is it actually going to delay it, or will it actually speed up your ability to get a home? Because it will actually put you in a better financial position? But Henry is about to burst at the.

[Ian K.]

I don't want to take over this show, Dave.

[Dave Meyer]

I don't do it. Take over the show. I'm going to go eat lunch.

[Ian K.]

Look, I understand, Like, I don't want to seem like I'm not human. Like, I understand that. That's like, that's a want. Like, you want to feel like you've got your own place and that is yours. And you want to build this life. And I get it. Do you want to build a life or do you want to build the best life that you can? Right? Because that is comfortable, but wealth isn't built in your comfort zone. If you want to be comfortable, then don't do this. This isn't going to be comfortable in the first two years, but it's not going to be so uncomfortable that you're gonna hate the journey. It feels like you're taking a step backwards, but in actuality, you're taking a huge leap forward. So when I did this, the way I sold it to my wife was I said the goal for us was to get to whatever our dream home, right? What that dream home looks like. And I knew, and I said, okay, well, is our next home gonna be our dream home? And the answer was no. We couldn't afford our dream home as the next home. So the goal was to work, get the raises and promotions that we would need in order to afford the next home, buy the next home, do it again. Raises and promotions, buy the next home. And so when we mapped it out, it was going to take us at a minimum five to seven years to get from the home we could afford now to the home we felt like was our dream home. And we weren't factoring in the cost of real estate going up. We were just assuming that real estate prices were what they were now. Now, Right. So it was probably going to take a little longer. I said, so in five to seven years, we can potentially be in our dream home. Right? And so we wrote that down. I said, the house hacking option, if we were to go and buy a duplex, live in one unit, and rent the other unit, and the duplex we were looking to buy, we were going to be able to save about. We were paying $1,200 a month. And we ended up paying about. Just for mass sake, we ended up paying about. We're saving about 1,000 bucks a month. We were still paying about 200 bucks, right? And so we took that thousand bucks a month and we did. We put it in a savings account. We said, we'll do this for two years. After two years, we'll have $24,000. And at $24,000, we can then use as the down payment on the dream home. We probably have to supplement a little bit, put a little bit with it, but we've got two years to be able to put a little extra away now as well. And so by the time that two years comes, we can rent out the unit that we were living in. Rents will have increased, and the cash flow that that property produces will then cover a little under half of the mortgage payment for our dream home. Plus we will have all of the down payment saved up for a dream home. So I said, we can get to our dream home in five to seven years and we can pay the whole mortgage or we can get to our dream home in two years and only pay half the mortgage. Which option would you prefer?

[Dave Meyer]

Yeah, that's a really good way of putting it.

[Ian K.]

So we house hacked and we got there and we still to this day only pay half of our mortgage because the cash flow from the house hack that we lived in in our personal name because we used an FHA loan, we take that and we pay half of the mortgage at our dream home. Like I do this right now.

[Dave Meyer]

Can I also just challenge the idea of comfort? I guess, like, maybe I'm unique in this, but I just don't feel like sharing a wall with someone is that bad.

[Ian K.]

It's not uncomfortable.

[Dave Meyer]

It's just fine. I'm doing it right now.

[Henry Washington]

I'm.

[Dave Meyer]

I'm l. A townhouse.

[Ian K.]

You look so cozy right now.

[Henry Washington]

Yeah, thank you.

[Dave Meyer]

I am cozy right now. I grew up living in apartments at certain points in my life. I've lived in single family homes at certain points in my life. I personally think you can be very comfortable. I know certain people don't want that, especially if you have kids. But I would also say that there's such a broad spectrum of small multifamily properties. I house hacked in one where I lived in a tiny single bedroom apartment above kids who partied all the time. And it wasn't even that bad. But I would not recommend that for you. There are side by side duplexes where you get a fence down the middle. You each have your own yard, you have your own garage. You don't have to see these people if you don't want to. There's like, at least to me, plenty of ways to be comfortable in this scenario. It's not like, I guess I just, I personally don't feel like it's some huge sacrifice.

[Ian K.]

It's not. One of the best things to do is to just have an open mind and go start looking at places.

[Dave Meyer]

Yeah.

[Ian K.]

You know, I talked to my friend into, into doing this and they looked at several places and they didn't like most of them, but they were able to find one that was a brand new construction duplex. And this wife fell in love with the place and they moved into it and they thoroughly enjoy it. I just think that go into it with an open mind, start looking at properties, seeing what you can and can and can't be comfortable with, and then make a decision. But this is a cheat code.

[Dave Meyer]

It's not as binary as it seems where it's like we're either going to be in a terrible house or our dream house. The reality is usually somewhere in between where you're like, you can find a really nice place that's also a great investment and you're getting most of what you want.

[Ian K.]

Absolutely.

Okay, so I have a question based on that, which is like we talk a lot on the show about how to buy investment properties and we analyze deals and you know, you put on the calculator and you're looking for 6, 8, 10% return. How does the equation change? If you're looking for a property as a house act, are you still doing that same kind of math or is it not based on math at all really? And you're just buying, looking for a nice duplex that you want to live in.

[Dave Meyer]

When, when you're looking at an owner occupied investment, at least to me the math is a little bit different than if you're looking at a traditional investment. With an investment, I usually am comparing a rental property to what else I could invest that money with a stock market or investing in other business or crypto or other realist types of real estate deals. When you're looking at owner occupied, to me it's about comparing it to your current living expenses and trying to reduce those as much as possible and how much of your essentially your after tax pay that you're going to get to keep and then hopefully invest somewhere else in real estate. And so it's not as easy or as clean to come up with a cash on cash return for that. But I think I Just encourage you to look for a deal that will help you maximize that savings. The second thing I would also look for is will it cash flow and get good cash flow once you move out of that property. Because as Henry was saying, you're maybe going to live in this for a year or two and then, you know, position this to, to either buy another rental property or buy that dream home and rent this out. I would say in two years, is this going to offer me a 5 or 6 or 7% cash on cash return once I'm. I'm no longer living in it? Those are the, at least for me, Henry, the two ways I would think about this, but curious what you'd say.

[Ian K.]

No, I totally agree with you. This is something you can't look at like a traditional investment because you are going to live at it, which means there are things that you have to factor in that you're not going to factor in to a traditional investment, which means you are going to care and should care about where it is. You want to be able to feel safe in your home. You want to be able to have certain amenities that you're going to be willing or not willing to sacrifice. Right. So those things aren't things you're going to put into a rental property calculator. Those are things that you may be willing to spend a little more on to have peace of mind. So a, you need to look at those things and factor those things in. In terms of financially, I'm looking at two to three years down the road. What are the gross rents going to be and are those gross rents going to cover so that I don't have to come out of pocket every month?

[Dave Meyer]

I think it's one of those things where if you're buying for those amenities that you really want for your personal residence, that might save you less money when your owner occupying it, but also will make it a better deal in the long run because they're probably things that people will want as a renter or as a future buyer of that property.

[Ian K.]

Absolutely. The other thing that I want to mention for the listeners, which I don't think will apply to you, Ian, is that there are some markets where this house hacking method that we're talking about for you may not work. I mean, I have looked at house hack deals for people in markets like Los Angeles where it was going to cost them so much to buy the property to house hack that even after they rent out the other units, what they're left with paying on the mortgage is still more expensive than if they were just to go rent somewhere. And so it was a better investment for them to rent and then invest their money in cash flowing markets elsewhere because the house hack wasn't an affordable thing. I don't think that's true where you are, but as you're analyzing a deal, that's what I would be looking for for am I truly lowering my expense by house hacking or am I house hacking just to buy something? But what I'll still be left paying is more than what I would be paying if I just rented. So those are things for listeners to pay attention to if they're looking in expensive markets.

[Dave Meyer]

I'm glad you mentioned that, Henry, because that is true. That is, I think maybe one of the biggest changes in the real estate investing landscape over the last few years is that if you asked me this five years ago, you could say go house hack in any market, just throw a dart at the dartboard. It's going to be a better financial decision for you. It's true still in most places I would say. But you think about places like la, Seattle, even Denver. I have a lot of friends because I started investing in Denver. It doesn't always make sense there. It can, but it's not as just check mark go house hack as it once was. And so you definitely need to do that analysis. All right, so we've covered now why.

[Henry Washington]

House hacking could be a great option for Ian.

[Dave Meyer]

But after the break we're going to.

[Henry Washington]

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[Ian K.]

We're back. Here's the rest of Dave and I talking about how to make your first deal.

What if I find the house hacking isn't for me or not the right option. Like what if I did say want to continue renting for my primary and then just buy an investment property? Because I've kind of heard a few different ideas about this and the one that feels more natural to me would be to sort of take it slow. I could do things like start going to meetups, spend a lot of time in the bigger pockets, deal finder, running numbers, finding out kind of what makes sense for me. I like the idea of maybe finding partners and really investing like small amounts, five grand, something like that in in a few deals to learn how this business works and I could commit my time and energy to doing things like that. And I think by the second half end of 2025, feel probably like I'm ready to go make a deal. But I've heard a lot of people also say analysis paralysis. Like you never really learn how to do it until you do it. So the alternate would be to like not go out tomorrow but take more actions that are oriented around buying a deal in the next few months, narrowing in a buy box, talking to agents, going to see properties. So that's sort of where I get lost. There's all these options. They all seem pretty good. I'm not sure which one exactly would be the best.

[Dave Meyer]

I don't see it as an either or situation. If you're going to house hack or you're going to go rent and keep buying real estate, you should do the things you were just saying. Like you should start going to meetups, you should meet an agent because you're going to need those things, you're going to need a team, you're going to need a network, you're going to need a lender, regardless of which option you choose. And honestly, I feel like being around more real estate investors is going to help you figure out the answer. Like you will be looking at more deals, you'll be talking to people in your market about what works and the answer will become more clear. I think the analysis paralysis comes when you're just staying your own head and you never like go out and actually see what other people are doing. That to me is where more people get stuck rather than like once you get out and start talking to people and analyzing deals, I find fewer people actually have the quote unquote analysis paralysis at that stage.

[Ian K.]

Yeah, the fun part for me is getting in the calculator, looking at the numbers and trying to make the return better. The hard part to me, the part that doesn't seem as fun is, you know, just walking into a room not owning any properties of people who are investors and make connections, things like that. Sounds difficult. So I think that's the part that almost gives me more paralysis than analyzing a dealer looking at the numbers of what I can afford. I think that's something that maybe just takes a little bit of, I don't know, courage to overcome, you know, a little bit of, of commitment to go to those things and meet those people, to like put myself in a good position.

What are we, what are we doing, Ian?

[Dave Meyer]

What are we doing?

[Ian K.]

What are we doing, Ian? You sound like every other investor who thinks they want to invest in real estate. But they're never going to do it because I want to. I'll go to some meetups and I'll meet some people and I'll look at some deals and you know, maybe I'll, you know, build my network and then in, you know, Q4 of 2020, never, I'll make another, like just go get pre qualified and start looking at properties, go to the meetups and start talking to people like, you will figure it out. But you have to make a decision and your decision needs to be made now. Your decision needs to be, I'm going to buy a property by X date of X year. You determine that period, but stand on your guns. I think it should be sooner than later. Yeah, seems like you've got all of the pieces you need to move forward if you want to. What we're really trying to figure out is you're trying to get comfortable and I don't ain't never going to Be an. I'm comfortable. It's not. It's not. You might feel a little more comfortable, you might feel a little more prepared, but you're in a unique position that a lot of the people listening to the show aren't in. I would say, yes, you need to go to meetups, and yes, you need to do all those things, but don't do them from the perspective of, I want to get comfortable before I make a decision. Do it from the perspective of, I've made a decision that I'm going to go buy this property. And I'm now surrounding myself with people who understand this business, who know this business, who have connections in this business. And so when I get there, it's not me saying, hi, I'm Ian. I like real estate. I think I want to do something at some point. Because, you know who sounds like that at meetups? Every freaking body. And they never stand out. But if you go to those meetups and you say, yes, I'm in, I'm buying a property by Q4 of 2025, I am looking at doing a house hack. And these are the steps that I'm taking. Like. Like, those are the people that stand out. And the more of a plan that you have, even if that plan is just in your head, that you're able to share with people, the more that they'll directly be able to help you. The coolest part about real estate investing as a community and as a culture, like, look at the bigger pockets, forms, like, people just want to help you.

[Dave Meyer]

Yeah, it's so true.

[Ian K.]

And the more you have a defined plan and the more you sound like you're not just BSing, but you're actually going to do this, like people want. People you don't know will bend over backwards to move obstacles for you, to help you. But if you walk into those meetings and you sound like every other. I'm scared and I'm trying to get comfortable, and maybe I'll do this, maybe I won't. Then you'll just be like, I hear people like that all the time. I couldn't tell you what they look like. I don't remember talking to them.

[Dave Meyer]

Well, I think it's. It's giving someone a problem that they can help you with. Like, if you say, hey, this is what's challenging me, I can't find deals, someone might be able to help you, or. Or I need to learn about this loan product, I can point you in that direction. But what Henry's saying is, like, there are certain problems that no One in that room can help you with you. They can't help you get comfortable. Only you can do that for yourself. And so like, if you can solve that for yourself and then go ask specific questions, you're going to find success. Like, people will help you with, with specific goals. People message me on Instagram all the time. They're just like, how do I get started? I'm like, that's not a question I can answer for you. If you ask me a very specific question, like, did I do this analysis? Correct. I can help you with that question. You know, like that is, that is something that's not going to take me a lifetime of, you know, sitting on a couch and therapizing you to understand.

[Ian K.]

You already did it, Ian.

[Dave Meyer]

That's true.

[Ian K.]

You already did the things to prepare yourself. There is a huge chunk of people listening to us right now who wish that they were in the financial position that you are in right now to be able to start taking action. But they don't have savings. Savings or their credit's not in a good place or their spouse isn't on board or the dot, dot, dot, dot. All these things that you've already done.

[Dave Meyer]

Totally.

[Ian K.]

I've seen the disappointment on Henry's face.

[Dave Meyer]

That's all it takes.

[Ian K.]

Like Q4, 2025. I haven't done it. We have to come back and do this again with Henry.

What are we doing here, guys?

[Dave Meyer]

I also, this is maybe a controversial opinion, but you don't have to do all of that stuff. You don't have to like get, do, run a thousand deals. You don't need to go to meetups, you need to do some of those things. But you can also pick and choose. I go to meetups now because I like socializing with other real estate investors. I never went to meetups when I was just getting started in real estate investing. I used Google or biggerpockets forums or you know, just people that you would meet. Like you would go and talk to a contractor who would introduce you to a lender. You know, you can do that, that sort of networking too. You don't have to do all of the above. There are plenty of resources. Whether you use bigger pockets, you use an in person meetup, you use your personal network.

[Henry Washington]

You just need to pick one that.

[Dave Meyer]

You'Re comfortable with and go with that. It doesn't need to be everything.

[Ian K.]

Let's take some meaningful action towards your goals. Determine when you want to buy a property, start looking on the market for those properties. Go and take a tour of those Properties. None of these things cost you anything. Go and get pre qualified. Doesn't cost you anything. You can do all these steps and look at houses for 90 days and buy nothing, and it cost you nothing but your time. But you will have learned so much just by doing that.

I think that despite producing the show and listening to every single episode of the show 4, 5, 6 times before it gets released, I don't think I realized that I was having a little bit of paralysis. You know, I thought it was recent enough. Like, I just started learning about this a few months ago. I'm doing everything I can do, but I think that is not true. I need to go start seeing some houses. Yeah, I gotta. I gotta talk to an agent. I gotta get in there. And I do think about that a lot. I'm like, what if, you know, what if I don't know what to look for? What if I'm looking at the wrong stuff? I don't know how to look at a foundation, you know? But I think I do have to go just start doing it.

[Dave Meyer]

I still don't know how to look at a foundation.

[Ian K.]

I don't know how to look at a foundation. I'm terrible at looking at foundations. Every time I look at one and I'm like, I can tell if it's bad, but I can't tell if it's $20,000 bad or $2,000 bad. Like, I don't know, I gotta call a guy still.

[Dave Meyer]

Exactly. You just need a guy. You just need a guy person who can help you.

[Ian K.]

Yeah, my guy is gonna be youtub.

[Dave Meyer]

A lot of people don't think that they're having analysis paralysis. It's like a fine line to walk. You shouldn't just do this blindly. But, you know, two, three, six months I think is sort of the reasonable amount of time to give yourself, to educate yourself. Like, I was actually talking to a different person in the BiggerPockets community this morning who is looking for some advice. And she was saying that she's listened to 40 hours of our podcast over the last six months. I was like, that's enough. Like, listening because you do want to. You need to, like, keep thinking about your deal and optimizing your portfolio. But you've done enough. And she's similar to you, Ian has. Is in the financial position where she can do it. And I was like, it's time to go. And I think that's hopefully where you're going to be at, where you're going to put yourself in a position to decide one way or another and come back on the show, we'll help you out. Or we'll just make fun of you for not doing it one way or the other.

[Ian K.]

I was reluctant to come on this time because I knew this was going to happen. But I will commit to coming back later in the year, whether I've done it or not, and that will be the motivation that if I. Because I don't want to have to come back and tell you that I haven't done it.

[Dave Meyer]

Oh, I like this accountability. Yeah, exactly. Okay, so now that. Now that you're. You're committed to it, do you know the next things that you should do? Like, right now, what are two or three things you. You will commit to doing to try and make this decision?

[Ian K.]

Yeah, I think that I have to go start seeing houses in the real world. I've done some analysis. I've looked some. But, like, I think that is a step that is not as big of a consequential barrier as it felt like in my head is calling some agents and saying, I want to go see some houses. I think that's like, the big step for me to take.

[Dave Meyer]

Thank you for coming on and being honest about this. I do really feel like this level of honesty and vulnerability about the challenges to getting in hopefully is helpful to the rest of everyone listening here, because the math makes sense. But there are other things that go into being a real estate investor that. And honestly, it's more about just like becoming an entrepreneur that is a little bit daunting. And hopefully, just by talking about it, Ian, by coming on and sharing your feelings about this, I think will help realize that everyone has this sort of moment of, like, jump in or not, and hopefully you all are doing it. But it is normal to have those reservations. It's really just about, you know, getting up the courage to go out and just start doing it. And hopefully Ann will hear back from you in the next three to six months that you've done it.

[Ian K.]

Well, I've committed you're going to hear back one way or the other.

[Dave Meyer]

Well, thank you all so much for listening. I hope you learned something about how to get started, some options for getting over some analysis paralysis or getting over the barriers to getting your first deal, even if it's house hacking or not in this episode. Henry and Ian, thank you both so much for being here and thank you all for listening. We'll see you next time on the Bigger Pockets podcast.

[Ian K.]

Not so easy when you're on that side of the mic.

[Dave Meyer]

Yeah.

[Ian K.]

Mr. Producer man, thank you all.

[Henry Washington]

For listening to the Biggerpockets Real Estate Podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify or any other podcast platform. Our new episodes come out Monday, Wednesday and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calico, content and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. the content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk, so use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose and remember past performance is not indicative of future results. Biggerpockets LLC disclaims all liability for direct, indirect, consequential or other damages arising from a reliance on information presented in this podcast.