Real Estate Rookie Podcast Summary

Episode Title: Should I Use My Home Equity to Buy My Next Rental Property? (Rookie Reply)
Hosts: Ashley Kerrick & Tony J. Robinson
Aired: February 20, 2026
Podcast: Real Estate Rookie (BiggerPockets)

Episode Overview

In this Rookie Reply episode, Ashley and Tony tackle three practical questions from the BiggerPockets forums, addressing frequent pain points for new real estate investors. The focus is on:

• Tapping home equity to expand your rental portfolio
• Accurately estimating rental prices
• Effectively hiring and managing short-term rental cleaning crews

The conversation is honest, tactical, and always approachable—tailored for investors on their first few deals.

Key Discussion Points & Insights

1. Should You Use Home Equity to Buy Your Next Rental? (00:27–08:57)

Core Question:
A listener wants to leverage $110,000 in equity from a property they're still renovating—wondering about best practices, the wisdom of the BRRRR method, and choosing between cash-out refinancing and a HELOC.

Understanding and Accessing Equity (00:27–02:16)

• Definition of Equity:
  Tony clarifies that equity is the difference between your home's market value and the loan balance.
• Validation:
  Tony urges listeners to verify the equity calculation source: “Was that based on the Zillow Zestimate ... or did your neighbor's house sell for a certain amount?” (00:50)

Best Options for Accessing Equity (02:16–05:53)

• Rental Property Financing:
  Ashley notes that standard HELOCs and refinances may not apply if the property becomes a rental. Instead, she suggests:
  • Commercial Lines of Credit: Seek small, local banks and clarify if they offer second-lien HELOCs for rentals, as some only allow first-lien positions.
  • Commercial Refinances: These often come with shorter amortizations (15 or 20 years vs. the usual 30).
  • DSCR Loans:
    Helpful if your personal debt-to-income ratio is high; the loan assesses the property's rental income potential.
• Interest Rate Consideration:
  “If it’s like a 2.9%, then we’re probably not going to want to refinance...unless there is extreme value in that equity” (05:28—Ashley)

Equity Strategies and Portfolio Growth (05:53–08:57)

• Accessible Amount:
  Tony estimates you may only access $70–80K of the $110K without a sale.
• The BRRRR Method:
  • Tony: “I’m a fan of the BRRRR strategy because it allows you to recycle a portion of that capital.” (06:15)
  • He cautions it requires skills in finding under-market properties and managing renovations.
  • Ashley adds BRRRR isn’t only for long-term rentals—consider short- or mid-term as fallback strategies:
    “If you are worried about [feast or famine with STRs], what are your other strategies you can pivot to ... can you easily pivot to a midterm or long-term rental?” (07:28)
• Actionable Advice: Always run the numbers for each scenario, weigh opportunity costs, and plan for a backup strategy.

2. Which Rent Estimator Tools Are Reliable? (12:14–17:09)

Core Question:
A listener asks which rent estimator, like BiggerPockets’ tool or PropStream, is most accurate and whether they use the same data.

Data Quality & Manual Research (12:14–15:34)

• Ashley’s Take:
  • She finds many tools unreliable, especially in small markets:
    “Every time I tried to use them, not enough data...in my small little tiny rural towns.” (12:33)
  • She prefers manual tracking—keep a spreadsheet of market listings, note when properties rent, and call property managers or landlords for comps.
  • Suggests using free rent estimators like TurboTenant, Rentometer, etc., for triangulation but not as sole sources.

Larger Markets & Blended Approaches (15:34–17:09)

• Tony’s Take:
  • He finds estimators more accurate in larger or urban markets.
  • Shares a personal example with BiggerPockets’ tool in Shreveport, LA—“It was almost spot on to what I was actually charging in rent” (16:16–16:55)
  • “Depending on how big of a market you are, the BiggerPockets Rental Estimator could be a good starting point...still...do a lot of that manual underwriting yourself.”

3. Interviewing and Paying Short-Term Rental Cleaning Crews (20:40–30:08)

Core Question:
A new STR owner in DFW asks for a walkthrough on hiring, vetting, and managing STR-specific cleaning crews, payment practices, and how to handle laundry.

Vetting and Interviewing Cleaners (20:40–24:40)

• Tony’s Checklist:

  • Prefer Teams: Avoid one-person shops to reduce risks if the cleaner is unavailable.
    • “If they get sick, if they get a flat tire, if they have a kid who gets sick...all the things that happen in their life that would prevent them from getting to your property now becomes a fire...” (21:09)
  • Experience:
    • Prefer cleaners with STR experience and comfort with checklists/photos/processes (“very specific system that cleaners have to plug into”).
  • System Flexibility:
    • Cleaners must adopt his systems for scheduling, check-ins/outs, and documentation.
  • Same-Day Turns Required:
    • “Anyone who can’t do same-day turns is a hard no.” (23:57)

• Ashley:

  • Inherited her cleaner from a co-host, but shares insights on pay structure and management.

Pay Structure & Bookkeeping (24:40–29:04)

• Hourly vs. Per-Clean:
  • Ashley: Currently pays by the hour, previously by the job.
  • Tony:
    • Pays by the job for single-family, by the hour for hotels.
    • “It’s easier to control the cost and...make sure that we always have the margin built into the cleaning fee.” (27:08)
    • Suggests surveying local STRs’ cleaning fees to set baseline expected rates.
• Payment Frequency:
  • Bi-weekly or monthly, depending on the cleaner’s preference.
  • Payments via business platforms (Ashley uses Turno/Baselane; Tony uses Relay/ACH).
• Tax Documentation:
  • 1099s for contractors.
  • Ashley: “Do not pay them until you get the W9.” (29:04)
  • Relay can automate W9 collection before releasing payments.

Laundry Logistics (29:04–30:08)

• Cleaners either take laundry offsite (especially when in-property machines are unavailable or for high-volume linens) or do it onsite for smaller properties.

Notable Tony quote (21:09):
“If they get sick, if they get a flat tire, if they have a kid who gets sick...all the things that happen in their life that would prevent them from getting to your property now becomes a fire that you have to put out.”

Notable Quotes and Moments

• On Using Equity Wisely:
  Ashley (05:28): “If it’s like a 2.9%, then we’re probably not going to want to refinance...unless there is extreme value in that equity.”
• On Manual Rent Research:
  Ashley (12:33): “Every time I tried to use [rent estimators], not enough data...in my small little tiny rural towns.”
• On Cleaner Reliability:
  Tony (21:09): “If they get sick, if they get a flat tire...all the things that happen...now becomes a fire you have to put out.”
• On Payment Documentation:
  Ashley (29:04): “Do not pay them until you get the W9. Once you pay someone for a whole year and then you’re chasing them down...they’re less likely to comply.”

Timestamps for Key Segments

• 00:27 - Listener question: Using equity to scale
• 02:16 - Equity access methods (HELOCs, commercial lines, DSCR loans)
• 05:53 - Deploying capital & BRRRR method discussion
• 07:28 - STR “feast or famine” and backup strategies
• 12:14 - Rent estimator tools: strengths & limitations
• 15:34 - Combining tech tools and manual research
• 20:40 - Interviewing and hiring STR cleaners
• 24:40 - Cleaner pay structures, accounting, and taxes
• 29:04 - Laundry logistics and W9/1099 best practices

Takeaways for New Investors

• Validate your actual equity; get appraisals or precise comps.
• Small bank commercial products and DSCR loans can help tap equity on future rentals.
• The BRRRR strategy is powerful but requires discipline, good deal-finding, and rehab management.
• Rent estimators are good for “ballpark” numbers—always supplement with manual, local research.
• For STRs, treat cleaner hiring as highly strategic—hire a team, vet for readiness and flexibility, and systematize payment and documentation from day one.

For more in-depth scenarios and rookie-level advice, subscribe to Real Estate Rookie on YouTube or follow @BiggerPocketsRookie on Instagram.