Real Estate Rookie Podcast Summary

Episode: How I’m Finding Profitable Properties in 2025 (Shotgun Method)
Release Date: April 2, 2025
Hosts: Ashley Kehr and Tony J Robinson
Guest: Henry Washington

Introduction

In this insightful episode of the Real Estate Rookie, hosts Ashley Kehr and Tony J Robinson welcome seasoned investor Henry Washington. Henry shares his remarkable journey from a full-time tech employee to building a thriving real estate portfolio. The discussion delves into innovative strategies for finding profitable properties in the challenging 2025 real estate market.

From Employee to Real Estate Investor

[00:42] Henry Washington opens up about his transition from a software designer and data analyst to a real estate investor. Despite earning a good income, Henry struggled with money management, especially after marriage. This compelled him to seek additional income streams, leading him to real estate.

Henry Washington: "I realized I made good money, but I was bad with money... So I had to figure out a way to make more money."

Determined to improve his financial habits, Henry began saving diligently and immersing himself in the real estate community. He attended every local meetup, positioning himself to network with active investors, offering help to build mutually beneficial relationships.

Funding the First Deal: Leveraging a 401(k)

[03:18] When discussing his first investment, Henry reveals a bold strategy: borrowing from his wife's 401(k).

Henry Washington: "We borrowed against my wife's 401k... our tenants were paying off our loan."

He explains the mechanics of 401(k) loans, emphasizing the importance of securing a property that generates sufficient cash flow to cover the loan repayments without straining personal finances. This move not only kickstarted his investment journey but also demonstrated the viability of leveraging retirement funds responsibly.

Navigating the 2025 Real Estate Market

[11:27] As the real estate landscape evolves, Henry maintains a steadfast strategy, focusing on single-family and small multi-family properties. Despite rising interest rates and property prices, he remains unphased by the broader market challenges.

Henry Washington: "I haven't had to pivot. I'm still doing traditional real estate investing—fixing and renting or selling properties."

However, he adapts his underwriting process to account for higher expenses and interest rates. Henry emphasizes the necessity of offering lower purchase prices with greater margins to ensure properties remain cash-flow positive even in a tighter market.

Underwriting and Deal Analysis

[14:27] Henry discusses his dual approach to underwriting deals for both flipping and renting, prioritizing conservative financial assessments to safeguard his investments.

Henry Washington: "I underwrite everything as a flip because I have the biggest margins... nine times out of 10 I can make it a rental if I need to."

He shares his profit margin expectations, aligning risk with reward. For significant renovations, he aims for proportional returns, ensuring that each deal's risk is adequately compensated by its potential reward.

Strategies for Finding Deals: The Shotgun Method

[24:46] Central to the episode is Henry’s "Shotgun Method" for sourcing deals. He outlines a multifaceted approach that includes:

1. Direct to Seller Outreach: Utilizing his website and direct mail to connect with property owners directly, eliminating middlemen and reducing acquisition costs.

2. Building Relationships with Wholesalers: Henry partners with new, motivated wholesalers to gain early access to deals, fostering mutually beneficial collaborations.

3. Targeted Property Listings: He meticulously filters properties on platforms like Realtor.com and Zillow, identifying listings stagnant on the market beyond the average days on market and making aggressive offers at 50% of the listing price.

Henry Washington: "That's just like a shotgun approach you can take to make offers on several deals on the MLS right now."

This method allows Henry to cast a wide net, increasing his chances of securing undervalued properties that align with his investment criteria.

Maximizing Cash Flow and Equity

[17:59] When addressing cash flow strategies, Henry differentiates his approach as his portfolio matures. For seasoned investors like himself, the focus shifts towards properties with inherent equity and long-term appreciation potential rather than immediate high cash flow.

Henry Washington: "I do flips and rentals because real estate pays me in ways that far more important than the monthly cash flow."

He highlights the importance of building equity from day one and utilizing strategies like cost segregation to optimize tax benefits, thereby enhancing the overall return on investment.

Overcoming Challenges: Adjusting to Market Shifts

[11:27] The conversation touches on the unprecedented combination of high-interest rates, soaring property prices, and escalating taxes and insurance costs in 2025. Henry emphasizes adaptability in underwriting to withstand these pressures.

Henry Washington: "I underwrite a whole lot more conservatively... and I can hold that property longer if I'm going to flip it."

By maintaining flexibility and preparing for various market conditions, Henry ensures his investments remain resilient amid economic fluctuations.

Building a Supportive Partnership

[37:32] Addressing the critical aspect of gaining spousal support, Henry shares valuable insights on effective communication and aligning investment goals with a partner's interests.

Henry Washington: "Speak to your spouse around how it's going to bring more financial security to them."

He recounts how he convinced his wife by presenting a clear, mutually beneficial plan that accelerated their financial goals compared to traditional savings and career progression alone.

Conclusion and Final Thoughts

In wrapping up, Henry Washington reaffirms his commitment to "boring" real estate investing—focusing on reliable, traditional methods rather than chasing trendy, high-risk opportunities. His disciplined approach, combined with strategic deal sourcing and conservative financial planning, serves as a blueprint for both novice and experienced investors navigating the complexities of the 2025 market.

Henry Washington: "You can do it, Tony. But you got to be sure you're buying a good deal."

Henry encourages investors to prioritize sound deals, maintain flexibility in their strategies, and build strong support systems to achieve sustained success in real estate investing.

Connect with Henry Washington:

• Instagram: @henrywashington
• Website: henrywashington.com

This summary captures the essence of Henry Washington's expert insights shared on the Real Estate Rookie podcast, providing actionable strategies and thoughtful advice for aspiring real estate investors.