Real Estate Rookie Podcast – Episode: How to Find “Hidden” Deals That Most Investors Miss (Even as a Beginner)
Release Date: February 26, 2025
Hosts: Ashley Kerr and Tony J. Robinson
Guest: Avery Caro

Introduction: Navigating a Challenging Market

Time Stamp: [00:00] - [04:31]

The episode kicks off with hosts Ashley Kerr and Tony J. Robinson introducing Avery Caro, a seasoned real estate investor who has successfully expanded her portfolio to 250 doors in just five years. Avery shares her expertise on identifying "hidden" high-potential deals in the current real estate climate.

Key Points:

• Market Conditions: Avery discusses the implications of rising interest rates, which have almost tripled over six months, and the stagnant inventory caused by a reduced number of active buyers. This environment creates a stalemate where sellers are hesitant to lower prices, but there are fewer buyers competing for properties.

  Notable Quote:
  Avery Caro at [00:55]: “There are not many buyers in the market at all. So if you are patient and persistent and make a lot of offers and make those low offers... you will be able to find great deals.”

• Opportunities for Rookies: With fewer competitors, rookie investors have a unique chance to negotiate terms that were previously unattainable, such as obtaining credits for inspection issues or having sellers cover certain repairs.

  Notable Quote:
  Tony J. Robinson at [02:47]: “Now, sellers being more flexible with what it is they're looking for... properties are sitting on the market because the price is too high.”

Strategies for Finding Hidden Deals

Time Stamp: [04:31] - [10:48]

Avery delves into her tactics for uncovering undervalued properties that most investors overlook.

Key Points:

• High Days on Market: Properties that have been listed for extended periods often indicate that the seller may be willing to negotiate. Avery advises new investors to focus on these listings as sellers become more open to accepting lower offers after multiple failed attempts to sell.

  Notable Quote:
  Avery Caro at [04:55]: “Look for those high days on market properties... your agent was honest with them about that.”

• Poorly Presented Listings: Avery emphasizes the importance of scrutinizing MLS listings for poor-quality photos or vague descriptions. Such listings may hide the property's true potential and allow investors to acquire deals at a discount.

  Notable Quote:
  Avery Caro at [06:06]: “I recommend going to see that property immediately because you can really find some good stuff just because people are not listing things properly.”

• Bedroom Count vs. Square Footage: Often, properties in vacation markets list fewer bedrooms than they can accommodate by utilizing bunk rooms or additional spaces not officially recognized as bedrooms. Identifying these discrepancies can reveal opportunities for maximizing rental income.

  Notable Quote:
  Avery Caro at [06:40]: “If you're looking at a property and it says it's a two bedroom, but it's like 3,500 square feet... there might be the opportunity to sleep more people than what it's actually listed for.”

Leveraging Market Data and Personal Knowledge

Time Stamp: [10:48] - [18:08]

The conversation shifts to the importance of combining data-driven insights with personal familiarity of a market.

Key Points:

• Data Tools: Avery highlights essential tools like Air DNA, Price Labs, and Rabu for analyzing market trends, occupancy rates, and revenue projections. However, she cautions against relying solely on these data sources without ground-level knowledge.

  Notable Quote:
  Avery Caro at [18:08]: “I use the data to give me a range and then use the enemy method to figure out... how to make sure that they choose mine instead of theirs.”

• Competitive Edge: Investing in markets where you have personal experience or a deep understanding can provide a significant advantage. Avery shares how her knowledge of the Smoky Mountains and Destin, Florida, allowed her to identify lucrative opportunities before they became saturated.

  Notable Quote:
  Avery Caro at [15:39]: “Choose something that you do know, then bring in the data... there’s really no substitute for really understanding a market.”

Optimizing Property Listings for Maximum Impact

Time Stamp: [19:56] - [25:01]

Avery and the hosts discuss the necessity of creating appealing and competitive property listings in a crowded market.

Key Points:

• Professional Presentation: High-quality, cohesive furnishings and bright, inviting decor are essential. Avery advises against over-amenitizing properties, which can deter potential guests by pushing rental prices beyond their budget.

  Notable Quote:
  Avery Caro at [19:56]: “Everything needs to be cohesive. I would say, like West Elm level furniture or above... find that happy medium of cute, clean, comfortable.”

• Balancing Amenities: While additional amenities can enhance a property's appeal, excessive investment can reduce return on investment. Avery shares anecdotes where over-amenitizing led to difficulties in selling properties or achieving desired rental income.

  Notable Quote:
  Avery Caro at [24:18]: “Adding too much to where in order to break even, you have to push your price per night up so high that now the demographic... can no longer afford.”

Real-World Examples of Hidden Deals

Time Stamp: [27:43] - [30:17]

Avery shares a specific success story illustrating her approach to uncovering hidden deals.

Key Points:

• Multi-Parcel Opportunity: Avery recounts how she secured a deal in Destin by identifying a property listed as a single three-bedroom house, which was actually three individual properties spread across two parcels. This discrepancy allowed her to purchase at a favorable price and maximize rental income.

  Notable Quote:
  Avery Caro at [27:43]: “We got this for them for 1.5 million. It was a three bedroom, a three bedroom and a five bedroom... that was one where I was like, dang, I wish I would have seen that before.”

Choosing the Right Market for Your Investment Goals

Time Stamp: [33:54] - [39:57]

The discussion emphasizes the importance of selecting markets that align with personal investment goals and knowledge.

Key Points:

• Personal Alignment: Avery stresses that there is no universally "best" market; instead, the right market depends on an investor's specific goals and familiarity. Investing in a market you understand and appreciate can lead to more authentic marketing and better property management.

  Notable Quote:
  Avery Caro at [37:39]: “There is no right market to invest in. There is a right market for you to invest in.”

• Avoiding Over-Trailblazing: New investors should avoid attempting to be the first short-term rental operator in an emerging market unless they possess extensive experience. Established vacation markets offer robust vendor networks and proven demand, reducing the learning curve for newcomers.

  Notable Quote:
  Avery Caro at [33:54]: “Those are areas where this has been an industry for decades and decades, well before Airbnb, well before the Internet... very plug and play.”

• Customized Investment Strategies: The hosts and Avery highlight that different investors have varied motivations—ranging from seeking tax benefits to long-term appreciation. Understanding these motivations is crucial for selecting appropriate markets.

  Notable Quote:
  Tony J. Robinson at [39:38]: “The best city for me to invest in is different than the best city for Avery to invest in... you need to find a city that aligns with your specific investment goals.”

Conclusion: Learning and Persistence Pay Off

Time Stamp: [39:50] - End

Avery concludes with encouragement for rookie investors to continue learning and persevering through challenges. She shares personal experiences of overcoming early setbacks, reinforcing the importance of resilience in real estate investing.

Key Takeaways:

• Resilience: Challenges are inevitable, but persistence and honesty about when to exit a deal are vital for long-term success.
• Continuous Learning: Engaging with knowledgeable vendors and continuously refining strategies will enhance investment outcomes.

Final Notable Quote:
Avery Caro at [25:01]: “If you truly have tried everything, you have to be honest with yourself about, am I doing the best job that I can... it's just time to go.”

Additional Resources:

• Avery Caro’s Book: Smarter Short Term Rentals to Build a Dynamic Real Estate Business and Out Host the Competition – Available on the BiggerPockets bookstore (biggerpockets.com/smarter-strs).

This episode of Real Estate Rookie provides invaluable insights for beginner investors looking to navigate a challenging market. Avery Caro’s strategies for identifying hidden deals, coupled with her emphasis on market knowledge and data analysis, offer a comprehensive roadmap for building a successful real estate portfolio.