Pay Off Your Property or Buy More? + Handling Repairs with Tenants in Place (Rookie Reply)

Summary

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Real Estate Rookie – Episode Summary

Podcast: Real Estate Rookie
Hosts: Ashley Kehr & Tony J Robinson (BiggerPockets)
Episode: Pay Off Your Property or Buy More? + Handling Repairs with Tenants in Place (Rookie Reply)
Date: January 30, 2026

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Episode Overview

In this Rookie Reply episode, Ashley and Tony tackle three big topics facing new landlords and small-portfolio investors:

1. How to handle significant repairs when tenants are in place—what's fair, what's required, and where to draw the line.
2. When and how to review your equity and consider refinancing versus holding or paying off property.
3. How to think about growing with partnerships, specifically residential vs. commercial deals when you’ve got investor interest but limited funds.

The episode keeps a practical, judgment-free tone, focusing on actionable advice for investors working on their first few deals.

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Segment 1: Handling Repairs with Tenants in Place ([00:00]–[09:37])

Key Issue:

When a crucial repair (like ripping out a tub & subfloor) renders a bathroom or whole unit unusable, what are the landlord’s duties—and how far should you go in assisting tenants with the transition?

Key Discussion Points & Insights:

• Situation Presented:

  • Landlord Brandon’s tenants discover a bathroom leak after moving in. Repair is a 4–6 day job; landlord offers two options: (1) Rent comp for the days out, or (2) a vacant nearby unit as temporary housing.
  • Tenants accept the temporary unit but want the landlord to pay for a moving truck.

• Ashley’s Take:

  • Repair timeline seems long—“First thing I thought of is four to six days seems like a really long time for them to replace the tub and the subfloor.” ([02:47])
  • Recommends landlords confirm with multiple contractors to shorten job time if possible.
  • Shares a similar experience:
    • “I had a unit where we had similar situation...they did it within 24 hours… Fair housing agreed with me and said 24 hours is a completely acceptable time period to go without a shower to make a repair.” ([02:47])
  • Cautions against moving tenants into another owned unit due to potential liability:
    • “I’d rather put them up at a hotel… What if they cause damage to this unit? ...Their security deposit is on a different property and not that property.” ([05:28])
  • Recommends minimizing direct involvement—prefer using third-party services for temporary housing/boarding pets if necessary.
  • On moving trucks:
    • “I definitely agree not to rent the truck for them and take responsibility of moving their belongings.” ([05:01])

• Tony’s Contributions:

  • Points out that if only the tub is unusable, alternatives may be reasonable:
    • “Maybe you get them a gym pass so they can go shower at the gym if they need to…” ([07:24])
  • Agrees that time frame can likely be reduced; also recognizes smaller towns may have limited contractor availability ([08:16]).

Notable Quote:

• Ashley: “Try to eliminate yourself from the equation as much as possible and use third party resources…” ([06:44])

Takeaway Advice:

• Seek the fastest repair timeline possible; multiple contractor quotes are essential.
• Temporary housing is appropriate but should minimize landlord liability.
• Never feel obligated to pay for tenants' moving costs in an emergency repair (especially without lease stipulation).
• Provide alternatives (hotel, gym, etc.) but keep boundaries clear.

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Segment 2: When to Reassess Properties Equity/Refinance ([12:06]–[20:24])

Key Issue:

How often and under what circumstances should landlords evaluate the equity in their properties for refinancing, versus holding or paying off?

Key Discussion Points & Insights:

• Question from Listener:

  • Should landlords regularly assess for refinance opportunities, or just focus on pay-off?

• Tony’s Perspective:

  • Five-year plan with partners is more about flexibility in partnerships than systematically refinancing or selling ([13:02]).
  • Emphasizes that the approach depends on personal goals and risk appetite.
    • “Some folks…would rather have eight fully paid off properties…even if the return is less… They just like the idea of not having a mortgage on any of their real estate.” ([13:47])
  • Others focus on maximizing leverage for growth:
    • “If they get more than X percent equity in a deal, then… they need to go redeploy some of that equity…” ([14:15])

• Ashley’s Story:

  • Discusses her own cash-out refi—first time doing so many years after original purchase ([15:06]).
  • Avoids full leverage; prefers a conservative approach and reserves significant equity in properties for peace of mind.
  • “For a lot of my properties, I don’t want to play around, I don’t want to refinance. Like, I want those paid off. Like, I want that peace of mind...” ([16:34])

• Tax Advantage Highlight:

  • Tony stresses that refinancing (vs. selling) has tax benefits because proceeds from a loan are not taxable like capital gains would be ([17:52]).

Notable Quotes:

• Tony: “I think that’s the beauty of investing in real estate … each one of those strategies could be correct because the right strategy is very much dependent on you as an individual person…” ([18:46])
• Ashley: “It’s actually more important for me…even if I have slower growth, to be under leveraged and to have more equity in my properties…” ([19:37])

Takeaway Advice:

• There’s no “one size fits all”—both paying off and leveraging for growth have merits.
• Analyze your own goals, risk comfort, and cash flow needs before refinancing.
• Leverage tax benefits of refinancing when considering tapping into property equity.

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Segment 3: Partnering Up – Residential vs. Commercial for First-Time Investors ([23:19]–[31:01])

Key Issue:

A new investor with limited capital and a potential partner wonders if he should focus on commercial deals for higher returns, or stick with single-family Section 8 homes.

Key Discussion Points & Insights:

• Tony’s Initial Response:

  • Warns against thinking commercial = always better returns.
    • “There can be more cash flow... but it’ll probably also require maybe a little bit more capital as well.” ([23:51])
  • Suggests comparing capital requirements for several single-family homes to one multifamily/commercial property.

• Ashley’s Perspective:

  • Urges deeper analysis of operational complexity:
    • “I think they need to look at other elements of investing in residential like section 8 compared to commercial…” ([26:03])
  • Wonders if new investors fully appreciate the management demands and vacancy risks of commercial properties.
  • “Just the return isn’t always the most important piece. Once you figure out which asset class is better for you… then analyze the deals.” ([26:33])
  • Highlights management differences—commercial and residential property management are not interchangeable.

• Finding Deals & Underwriting:

  • Tony says don’t write off platforms like Crexi and LoopNet—deals do get done there ([29:26]).
  • Emphasizes the necessity of proper deal underwriting and relationship-building with brokers.
    • “Both sides of the coin are dangerous. If you over-project, you end up buying a deal that maybe isn’t going to pencil out and if you under-project you end up buying nothing because all the deals look bad.” ([30:45])

Notable Quotes:

• Tony: “Aligning your skill set with the strategy is one of the most important things.” ([29:26])
• Ashley: “Making sure that you have somebody in your area that does one or the other depending on what strategy you decide on because they are definitely not the same management.” ([28:54])

Takeaway Advice:

• Choose asset class (commercial vs. residential) based on experience, management preference, and local demand—not just headline cash flow.
• Residential (like Section 8) can be simpler and more predictable for newer investors.
• Underwriting and networking are key for commercial—take time to learn the nuances.
• Make sure the partnership fits both parties’ risk tolerance and work input expectations.

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Memorable Moments & Quotes

• Ashley’s realism about repair timelines:
  • “Try to eliminate yourself from the equation as much as possible…” ([06:44])
• Tony’s partnership wisdom:
  • “The beauty of real estate investing is that you can talk to 100 different people who have 100 different strategies, and each one of those strategies could be correct…” ([18:46])
• Ashley on peace of mind over aggressive leveraging:
  • “It’s actually more important for me…to be under leveraged and to have more equity in my properties…” ([19:37])
• Tony on patience in dealmaking:
  • “I’ve met tons of folks who have bought right off of [Crexi and LoopNet]. I’ve personally done it myself. It’s just a matter of being consistent and actually picking up the phone and talking to folks…” ([29:26])

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Timestamps of Key Segments

• Tenant repair responsibilities / temporary housing: [00:00]–[09:37]
• Portfolio equity review and refinancing: [12:06]–[20:24]
• How to start investments with partners / resi vs. commercial: [23:19]–[31:01]

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Tone and Style

Direct, conversational, supportive, and focused on practical solutions for small-scale, newer investors. The hosts emphasize understanding both the “math” and the “mindset” behind decisions and encourage listeners to focus on what fits their lifestyle and risk tolerance.

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This episode is ideal for listeners facing their first major tenant repair dilemma, thinking about cashing out equity or paying down debt, or those who have an opportunity to leverage a new partnership and want to make a measured, informed leap into the next phase of building their portfolio.

Transcript

[A]

Today we are kicking things off with a question that every landlord eventually faces. What do you actually owe a tenant when a repair turns into a full blown project and their living space becomes unusable?

[B]

And this one gets interesting fast. It's not just about fixing a bathroom. It's about what's fair, what's reasonable, and what responsibilities belong to the landlord versus the tenant. We also get into when you should be reviewing your investments and what to do when an opportunity actually comes.

[A]

This is the Real Estate Rookie Podcast. I'm Ashley Hare.

[B]

And I'm Tony J. Robinson. And with that, let's get into today's first question. So today's first question comes from brandon in the BiggerPockets forums. And Brandon says, about a month ago, new tenants moved into one of my rental houses. After they moved in, they discovered a leak in the bathroom. My maintenance guy checked it out and said the entire tub has to be ripped out and most likely the subfloor needs to be replaced as well. And it's about a four to six day job. Obviously, that means they'll be without a bathroom for a few days. So we offer them two options. Number one, comp their rent for the days the bathroom is unusable, or two, let them stay in one of our vacant three bedroom units for free until the work is done. They chose the temporary unit, but then asked if we could also rent a truck to move some of their belongings over there. I personally don't feel like that's something that we're responsible for. The repair is unforeseen and out of our control. And we already provided temporary housing or rent relief. For context, our lease also includes a section recommending renters insurance. But as far as I know, renters insurance would not cover the cost of a moving truck in this situation. So here's my question. As a landlord or homeowner, what would you do? Do you think covering a moving truck is our responsibility? Are we being fair with the options we offered? And then finally, some people are also saying that maybe giving them a place like an Airbnb or hotel. But in my area, there is not any Airbnbs and hotels are limited. They do have a dog and the hotel will not allow the dog. All right, bit of a sticky situation here. And this is never, I think, a fun time when you got to take a tenant out of their their unit. I know when I worked at, again, very briefly after I graduated from college, I worked at this big leasing company and they actually had, I mean, they had like thousands of units in the town that I work in or that I live in. And they had at a few of their larger complexes, units that were fully furnished that they would just keep empty for these kind of situations. So if a guest had something that would prevent them from staying at their own unit, they would say, hey, we have our hotel at one of our other properties, you can go stay. As that was. That was kind of their, their way to work around that. But as someone who has a lot of experience in this, what, what is your initial take on whose responsibility it is to cover the cost of this move and getting them from the unit they're in to the vacant unit and then back?

[A]

Well, the first thing I thought of is four to six days seems like a really long time for them to replace the tub and the subfloor. I had a unit where we had similar situation. The tub needed to be ripped out, the drains all replaced. And this was for an upstairs unit. So there was a tenant living downstairs, tenant living upstairs. Their bathrooms were right on top of each other and so they did it within 24 hours. So they came one morning, they ripped everything out. They started putting everything together and making all the repairs and they were done by the next day. By 1pm the upstairs tenant was currently being evicted and actually called fair housing on me, saying that I did not give him a place to live and he couldn't use his toilet, couldn't use his shower, blah, blah, blah, which he could use his toilet. The only water that was not working was to the shower. His bathroom sink worked, his toilet worked and his kitchen sink worked, and it was just a shower. And the fair housing agreed with me and said 24 hours is a completely acceptable time period to go without a shower to make a repair. Where he was getting a brand new tub and a brand new surround put in and new drainage, which he had been complaining that it wasn't draining properly either. So you're making the repair that he requested. So that would be the first thing is contacting other plumbers and seeing if there is a different time frame than four to six days to actually get that replaced. Because I feel like it could be done maybe if it's this huge bathroom. But if you're just replacing where the tub is, I don't see it taking that long. So I would try and find a contractor that can do it in a shorter amount of time. I would have recommended the hotel before he added that section at the bottom. That that's what he. There's not a hotel that accepts a pet, so maybe what you could do in that situation is do the hotel but also set the pet up at a, a boarding place or a groomers or something like that where they take in dogs and you could pay for the dog to be boarded for those four to six days and then you could also pay for their housing if they accept it or not. I feel like that's on them. I definitely agree not to rent the truck for them and take responsibility of moving their belongings. And I think didn't mention in there if the, this rental was fully furnished.

[B]

Or it doesn't say, it just says our vacant three bedroom unit.

[A]

So like if there's no furniture in there, then yes, I could understand why they want to move some of their stuff if there's no furniture in there. So maybe you should provide some kind of assistance in moving for that period of time. But I, I think I would rather not have them in one of my units and I'd rather put them up at a hotel. I mean what if they cause damage to this unit? You don't have a lease with them on this property. Their dog, you know, rips a hole in the carpet, chews a hole in the carpet or something while they're there. I think of liability reasons. They don't have a lease agreement with you for that other property. It's a different property. Their security deposit is on a different property and not that property. I would try to reimburse them for a hotel stay somewhere else. I, when I used to work for an investor who had a 40 unit complex, we had to do this a couple of times where we would actually call the hotel and we would make the reservation for them in their name and we would pay it, but they would still have to put their credit card for incidentals when they arrived at the hotel. So we, we did it that way to set up and like a couple times people wouldn't even show up to the hotel and wouldn't even stay there. So I don't know, like, wouldn't it tell us anything? It would just be like we'd get the email from the hotel and saying here's your one night fee for no show for your, you know, one week stay or whatever it was. But I think try and eliminate yourself from the equation as much as possible and use third party resources to kind of take that away. But I think that the dog issue in the hotel, not accepting dogs is maybe looking for a place to offer to pay for the dog to be boarded and then it can be up to them if they choose, could do that or not.

[B]

Yeah, I Mean, but you bring up a really good point Ash about it sounds like the tub is all that needs to be ripped out. And he said like most likely the subfloor. So I guess the question is with the rest of the restroom still be usable during that time frame? And if so, you know, maybe you get them a gym pass so they can go shower at the gym if they need to for, you know, the, whatever 72 hours while this is happening. Because the, the toilet and the sink and everything else still, still works. I think that's. That might honestly be the best approach is like, hey, I'll pay for you to go to the YMCA if you need to, you know, to shower while the tub's being replaced. But everything else in your restroom is still usable. And I love your call out of the time frame.

[A]

I mean, unless they're gonna like tile it and things like that. But like if you're just doing a standard tub with a surround, like it shouldn't be that big of a job.

[B]

So hopefully that helps. Brandon. Yeah, it seems like he might be in a smaller town too, so maybe he's limited on. On labor. You know, the fact that there are no Airbnbs and seems like only one hotel. Could maybe just be a smaller town. Don't have a lot of options for plumbing work, which, you know, we've run into in some of our cities as well.

[A]

Well, I'm in a small town and I got actually literally just. I think it was on Monday I get a. The tenant put in a maintenance request for their hot water tank wasn't working. The plumbers showed up. They and I didn't even know Daryl handled all this. So I didn't even know until I got the invoice. But they called, they were there. We needed to put in a new hot water tank and the. From it leaking. The hot water tank was leaking. The subfloor needs to replace it. It been slowly leaking for a while and the tenant never noticed. And so the subfloor was starting to rot. So they actually went to the local ace Hardware, got materials, replaced the subfloor for me, replaced the hot water tank all in that same day in their. In their laundry room or their utility room of their apartment. So definitely things can be done a lot faster than four to six days. We're going to take a short break and we will have two more questions from the rookie listeners afterward from our show sponsors. We'll be right back.

[C]

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[A]

Okay, welcome back. Our next question comes from Tracy in the BP forums, I've seen many investors unlock growth simply by reassessing older properties for refinance opportunities instead of selling. Curious how often property owners here evaluate equity positions as part of their long term management strategy. I think this is a pretty good question that we don't often get all the time as far as like assessing your portfolio and understanding when to exit, when to keep, or how to become, you know, more strategic or how to leverage the property for more opportunities. I know, Tony, you have a five year exit plan with a lot of your partners in that plan. Do you, Is it just to sell or do you have a plan that maybe you guys decide to refinance at that point?

[B]

That five year plan is really more so geared towards unhappiness in the partnership. So like, if any of us were unhappy, it would just be an easy way for us to break without there needing to be an argument over what should we do. But it is an option for us as well to refinance if we, you know, if we find that it makes sense. Now we did buy a lot of our properties when rates were relatively low, so I can't see a scenario where us refinancing any of these properties, the near term would make sense for us. But I, I do like the idea, or just the, the question itself of at what point do you evaluate how much equity you have in a home to see if it makes sense to go redeploy that capital elsewhere? Dave Meyer's book, Start With Strategy. I know he, he kind of touches on like portfolio strategy a bit as well, but I think a lot of it comes down to the, the person and their risk profile, their, their risk appetite and, and what kind of portfolio actually makes them sleep easy at night. Because there are some folks who are of the mind that I'd rather have eight fully paid off properties, even if that means that my return is less than what I could get because I've got a lot of equity trapped in these. They just like the idea of not having a mortgage on any of their real estate. And for them that, that makes sense. And there are others who are maybe a little, little bit more mathematical. And if they get more than X percent equity in a deal, then they're like, hey, we need to go redeploy some of that equity into something else and we're going to push back up to what our Max LTV is. So let's say that someone's Max LTV is 75% and they've got a deal where they're sitting at 50%, well, they've now got 25% equity that they can go leverage to go buy their next deal. So I think a lot of it does come down to you as an individual. And what's more important to you? Is it the growth and the scale and getting the next deal to keep the portfolio growing, you know, to kind of keep putting fuel in that engine, or is it. I just want a very small portfolio that produces some, some heavy cash flow even if, even if it's not like maximized in the best way. And I don't think there is a right or wrong answer to that. It's really like a personal choice.

[A]

I'm actually refinancing a property right now to and I'm doing a cash out refinance. This is the first time I've ever done a cash out refinance on a property that I bought a long time ago. Usually the only time I'm doing it is I purchased property, rehabbed it, you know, doing the BRRRR strategy, then I'm refinancing to pull the cash back out. This property I bought in 2014, it was the second duplex I ever purchased, second property I ever purchased, and we bought it for I think like 70, 80,000. And we actually put a 15 year note on it and there's about 30,000 left right now on the note and we're going to pull out another 50,000 to bring the note up to 80,000. The property's worth about 150,000. The bank I asked them what would be the amount that I could refinance that you don't need to go in and do an appraisal. So I don't have to pay 800 bucks for an appraisal. I don't have to coordinate with my tenants to get an appraiser in there. And so as of right now, they asked me, well, what's the amount that you want? And I said I'd like 50,000. So as of right now, they're going to do a kind of a desktop appraisal, I guess, where they're looking at comparison things like that, not actually paying for an appraiser to go out to the property, which if that happens, that's fine. I'm just trying to make things easier on myself. But that 50,000 is going to be used for another property that we own in that same LLC to do a bunch of improvements and upgrades. Until this point in time, any time a property has needed a big capital improvement or renovation, my partner and I have always put in the money for that, whatever we would need beyond our reserves and things like that or to replenish our reserve. So this is the first time I'm actually doing that, tapping into a property that has a lot of equity to actually take this other property and turn it into a better property and really maximize the potential of this other property. But I think it's a great strategy to do and I think it's been a really big mindset shift for me is like, the longer you hold the property, like the more opportunities and the different options you have moving forward. So a lot of my properties, I don't want to play around, I don't want to refinance. Like, I want those paid off. Like, I want that peace of mind on some of those properties. But like some of them, especially the ones I have with like partnerships, I'm okay with, like playing around with the money to see how I can deploy it in different places and in things like that.

[B]

Yeah, I mean, I think the other benefit too is that refinancing and, and tapping into your capital that way is more advantageous from a tax perspective as well. Because if I, if I sell a property to tap into it, that, that's like a capital gains event, right? Like, like you're, you're, you're going to pay on what you earned on that sale. But if you refinance, you're just getting more debt. Right. And you're not taxed on new debt that you get. So there's also something to be said about leveraging that equity as like a, a tax advantageous way to, to scale your portfolio as well. So just something else to consider. But I think that's the beauty of investing in real estate is that you can talk to 100 different people who have 100 different strategies, and each one of those strategies could be correct because like, the right strategy is very much dependent on you as an individual person, what your goals are, what your risk appetite is, and all these different elements that go into why you decided to invest in real estate in the first place. So I, I think a lot of it comes down to that. But you know, to Ash's point, I think there's, if you do want to tap into it, there's probably like some, some math that you can look into to see, okay, what amount actually makes sense for me to pull out. Am I actually going to increase my cash flow by doing this, or am I going to decrease my cash flow if I, you know, take a 3% interest rate and refinance into a 6% but I get a hundred thousand dollars in capital to go buy another deal. Like am I actually ending out on top at the end or am I maybe making less in cash flow on an annual basis? But then you can factor in the appreciation of the other deal. So there's a lot of different ways you can look at it. I think my strong recommendation would just be to evaluate all of those levers that you're pulling to make sure that the end, you're still getting closer to the goal that you have of why you invest in real estate to begin with.

[A]

Yeah, and I think that's a great point too, is to like looking at what works for you. And I definitely don't like being over leveraged. So like this property, you know, the comparable show that it's probably worth 150,000, but I'm at the 30,000 balance that's due on the loan plus another 50. That's still leaving me like 70,000 in equity left in the property. Where someone else would say why would you leave that in there if you're going to refinance, like pull out the full amount and use that money to build your portfolio, scale, things like that. But it's actually more important for me, even if I have slower, slower growth, to be under leveraged and to have more equity in my properties so that anything ever did happen, I have options available to me with that equity.

[B]

All right guys, we're going to take our final break here, but when we come back, we're going to talk about how to take down a really solid deal when you maybe don't have enough funds to do it. So we'll be right back afterward. From today's show, sponsors, the rise of.

[C]

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[B]

All right guys, welcome back. All right guys, here's our last question for today. Also comes from the BiggerPockets forums and the question is so the issue for me has always been about not having enough money. I recently had my uncle reach out to me because he heard I'm getting into real estate and he wants to invest and is willing to partner up with me as he owns multiple businesses. At first I figured why not do section 8 houses, but I don't think he would want to put 20k into a single family home and only cash flow 500, which would be 250 every month. So I figured commercial real estate would make more sense. I'm new, but also a quick learner. It's easy to learn when it's fun to learn different ways about real estate. I've always heard of commercial and the different types of it, but I just don't know which one would be best and especially where to look and how to find the best ones. I've looked at Crexi and LoopNet, but the numbers are horrible. On most deals I've looked at, if somebody can guide me or point me to a direction so I can find something to take it to my uncle and start this journey. All right, so first let me say, I mean, congratulations for you on having someone in your family reach out and say, hey, I've heard that you've been thinking about real estate. Let's do this together. I've got all the capital. I think that's for a lot of folks listening. Their dream is to have someone just reach out to them and say, hey, let's do this together. But it sounds like in some way, shape or form you've been talking about wanting to do this because he said, hey, I've heard that you're, you're getting into real estate, so kudos to you on that. Now, I think that when we talk about partnerships, there are, there's a lot of different ways that we can, we can approach this. You said part of your draw into commercial real estate is simply that there, there can be more cash flow on any given deal, which is true, but it's also probably more capital. Right? So you could have, you know, four single family homes or maybe four, you know, five single family homes or one five unit multifamily. And the, the capital required to take those deals down could be roughly the same. Right? So don't think about it so much as, as one being better than the other because I mean, you'll still need capital in either deal. It's just, are we going to spread that capital out across multiple deals? Are we going to dump all that capital into one deal? So if your only true motivation is you think that there'll be more cash on the commercial deal, it's true, but it'll probably also require maybe a little bit more capital as well. And maybe in some situations you would be better off buying five section 8 houses where you live as opposed to buying one multifamily property. So just something to, something to consider. There's the other point, Ash, on like finding deals, but I guess I just want to get your take first. Like do you think that the logic behind why this person's looking at commercial makes sense or would you give them any feedback there?

[A]

I think they need to look at other elements of investing in residential like section 8 compared to commercial. Just them thinking that they're going to get a better return or more cash flow. Since he says, you know, he doesn't think his uncle would only want 250, which to you put in 20k, you get 250, that's what a 15 cash on cash return.

[B]

Yeah, that's pretty good.

[A]

I mean, yeah, that's not bad. Especially since, okay, it's a single family home, you're one tenant managing one tenant. I think really look at the pros and cons of each strategy and I think look more at what you are capable of and really understanding the full thing besides just the return. And I think once you figure out which asset class is better for you and fits your goals and what you're capable of, then then I think you can get more into the nitty gritty of analyzing the deals and looking at the numbers and then only buy a property within that strategy that, that fits what you're looking for. So like for example, for a commercial, like you have a vacancy a lot of times commercial properties are a lot harder to fill than just a single family home to find a tenant. Like if your commercial property is retail or a restaurant, you know, like, or even just office space. So I think understanding that in like if you have commercial space, you have an operating business most likely in that where like you know, we, I used to manage a couple commercial properties and if the H Vac system goes down or the plow dry, the plow driver doesn't show up or something and they can't get customers in and they, their customers don't have, you know, AC running when they're, they're, you know, doing their business. I, I think that you know, that's more urgent and can be more of a problem to you than if it's a residential customer who puts in their maintenance or costing their AC isn't working today. You know, you can make that where I think so I think just really understanding the two different management IT styles it takes for each of those properties and if you're going to hire out management, there are commercial property managers and there are residential property managers. And I think making sure that you have somebody in your area that does one or the other depending on what strategy you decide on because they are definitely not the same management. And I think that should be a big thing you should look at when deciding between the two, especially if you're going to manage yourself, trying to think if there's anything else to, to kind of look at. But also like look at the, the vacancy rate of single family homes and commercial property in your area. Like what actually does rent out better. Look at the rental rates, look at the demand. Like are there people actively searching? So like for the commercial property you could go to local real estate agents that do commercial property only and ask like do you have clients that are looking for commercial properties in these areas to lease to put their business in things like that too.

[B]

Ash, I couldn't agree more. I, I definitely think that aligning your skill set with the strategy is one of the most important things. And I think the final piece I'll comment on is just like the actual deal finding people always kind of poo poo on Crexi and LoopNet. But we bought our very first commercial property right off of Crexi and it took some, it took some time to like negotiate with them. There was a lot of back and forth and it had been listed for a while so we maybe caught them at the right time. But I, I think it's a great place to start to start building connections with brokers and this just continue to follow up with those folks even after you find that first deal because maybe when they get another deal you can be one of the first folks they reach out to. So I wouldn't just necessarily negate or say that all the deals on Craig Scene LoopNet are no good because I've met tons of folks who have bought right off of those platforms. I've personally done it myself. It's just a matter of being consistent and actually picking up the phone and talking to folks and building that relationships with those brokers so that you can be one of the folks they think about calling as more deals come across their desk. And then I guess the last thing I'd say is just make sure your underwriting is solid as well. Underwriting commercial properties because there's a wide range is going to be very different. How you underwrite a hotel, that process is different than a mixed use building which is different than self storage, which is different than light industrial. Like you've got to make sure that you understand how to really underwrite these properties so that your projections are accurate because both sides of the coin are dangerous. If you, if you over project you end up buying a deal that maybe isn't going to pencil out and if you under project you end up buying nothing because all the deals look bad. So making sure that you're truly educated on what the correct underwriting process looks like.

[A]

Thank you guys so much for listening to this episode of Rookie Reply. I'm Ashley, he's Tony, and we'll see you guys on the next one.

[B]

Hey, rookies, if you're watching this, we want you to apply to be a guest on the Real Estate Rookie Podcast. That's right. Ashley and I are looking for amazing stories just like yours to be a part of our Real Estate Rookie Podcast. Now look, you don't need to be an expert. You don't need to have done thousands of deals. Even if you've done one deal, your story could help inspire the next listener.

[A]

As a rookie investor, especially if you just got your first deal. It is all fresh in your minds and you are the best person to tell your story. Give your experience on how you got it done to help someone else get their first deal.

[B]

So head over to biggerpockets.com guest if you want to be a part of our show again. That's biggerpockets.com guest and we'd love to have you on.