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Rich Dad Radio Show: In-Your-Face Advice on Investing, Personal Finance, & Starting a Business
How to Buy Your First (or next) Investment Property in 2025
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Sign Up for Jaren's FREE webinar: https://bit.ly/3EIg0DK If you've been waiting for the perfect time to invest in real estate, 2025 is it! In this episode of the Rich Dad Real Estate Show, Jaren Sustar breaks down exactly why this year presents one...
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Welcome to the Rich Dad Real Estate show where we talk about the good news and bad news of real estate, hosted by yours truly, Jaron Sustar. And this is a monumental moment, monumental day for me and the Rich dad brand because I am live with you guys right now. Usually when I record these podcasts I can mess up. We can edit them, make them sound good. But today, whatever I say is out for the world to hear and I am so excited that you guys are hanging out today. I'm so excited to be doing this live. We're going to have an absolute blast spending time and hanging out together and I'm going to teach you guys what you need to be buying real estate wise in 2025. I truly believe, I really, really, really sincerely mean this, that 2025 is going to be one of the best years of real estate that we've had in recent times. There are so many opportunities that are available right now. I personally we have just locked up 11 units in the last week and a half. 11 units. Why? Because deals are appearing, deals are showing themselves and I'm going to teach you why that is. Because if you think back to the last few years, real estate has been ridiculously hot. It's been very hard to find good deals. The prices went up like crazy, rates went up like crazy. And people were like, dude, how in the world am I supposed to buy real estate right now? Well, it was very, very hard. You had to know what you were doing. You had to know what you were looking for. You had to look for specific types of properties and specific locations. And it made it harder for the average person who was just getting started to get into the game or somebody who may have a few properties to be able to scale. Well, we're back to where it is more palatable and easier to find these deals for the everyday average person. And I'm going to show you guys how to do it. And I can't wait to break it down for you today. Hey, we're going to put in the show notes after this show, a link for a live training that I am doing Thursday night. So this Thursday, today's Tuesday. Thursday night, February 13th, 8pm Eastern. I'm going to go really in depth on how you can buy your first or next rental property or fix and flip in 2025. It's going to give you all the tactical information. We're going to get into the details, dig into the weeds. So make sure you go and check that out after the show. We'll put it into the show notes. So today I want to break down, you know, mainly the title of this is how to buy real estate in 2025. What are you going to do in 2025? But there's some things that we have to understand before we can actually go and capitalize on buying real estate. And so I want to talk to you guys about, number one, why real estate now? Why do we want to look at real estate now? Okay. As it pertains to as a whole and in 2025, what to buy in 2025 and how we go about finding the deals that we need to buy in 2025. There are lots of different ways that we can go on real estate. I mean, when you hear the word real estate, you gotta get overwhelmed a little bit. I know I did when I first started. And even today it's easy to want to chase the shiny object syndrome. You got apartments and self storage and mobile, all these different things. And say, how in the world, what do I, how do I know what to do? And I want you to walk away after we hang out together today knowing, hey, this is the game plan, I'm going to go execute it. And if, if you do that, if you walk away knowing that I've done my job and our time spent together has been amazing. So why real estate in general. And I don't want to spend a lot of time on this because I want to get into the tacticals. But I think it's important to remind ourselves, and I do this very often. Luckily, I teach a lot, so I get to hear myself say it a lot. And I think it's good to almost brainwash ourselves with this information of why do we buy real estate? Out of all the things in the world that you can buy, why real estate? I think there are six main reasons, and I call these things the greatest financial concoction known to man. Okay, so when you add these six benefits of real estate together, I have coined it as the greatest financial concoction known to man. So what are those six things? Why do we buy real estate? Well, number one is leverage in real estate. You can use other people's money to buy properties. I usually make the analogy of if you want to go buy $100,000 worth of Apple stock or Google stock or McDonald's or whoever, you're going to have to come up with what, a hundred thousand dollars. But if you want to buy $100,000 property, how much do you have to come up with? $20,000. Right? On average, that's 20% down, is what people are used to doing. Or maybe you'll have a 10% down loan program. You only got to come up with $10,000 or 5% down program. That's $5,000 or three and a half percent program, and that's $3,500. Or you buy real estate like I do, where we leverage other people's money to buy it. And you don't have to bring any of your own money into the deal. And so we can get into these large assets that cost hundreds of thousands and millions of dollars without putting any or very little of our own capital in. That is huge that we can put a small amount of money in, or none, depending on how you structure the deal and now control a very expensive asset. You just can't do that in many different avenues of wealth throughout the world. But real estate can. And the beautiful thing about using debt to buy real estate is real estate isn't speculative. Okay? So real estate has been proving itself since the beginning of time. Literally, people who've been buying it since the beginning of time have been getting wealthy. I mean, think back to, you know, know you read the Bible, people who owned all the land, they were the wealthiest people. They had the goats and the sheep and everything. And so it's not a, it's not a, you know, A crypto per se. Right. And some of you guys are big crypto fans and you know that it's going to go to the moon. Well, it's only been around for a short period of time, so none of you really know. But with real estate, we can know, looking since the beginning of history, that real estate goes, starts here and then it goes up over time. It just, that is backed by data. And so being able to use leverage and other people's money to acquire that is a game changer. Number two is forced depreciation, which is just a simple word, or excuse me, a fancy word for a simple process. Forced depreciation means you can buy a property that's ugly, you can make it pretty through rehab, and now it's instantly worth more. If you go buy a stock, you have no control over what that company's going to do. You don't get to go make Apple more valuable now. You trust that their leadership will. But with real estate, you go buy it with somebody else's money and then you go make it valuable instantly through rehab, and now it's worth way more. That's, that's astounding that we can do that. Then you get third, what is called traditional appreciation. So what I just talked about, over time, real estate's going to go up, so we use somebody else's money to buy it, we make it more valuable instantly through rehab, and then over time, it's going to continue to, to grow in value, because that's what real estate does now, all while it's growing in value. What are the tenants doing for you? Your tenants, you're renting the property out. They're actually going to pay down that leverage that you use to buy the property. Somebody else is going to pay that off for you. And so you've got tenants that are paying down your debt here, while the property is going up in value here. That spread is your net worth, and that's how you build wealth. Well, you do that with 5, 10, 15 properties, and they all got a spread of a hundred thousand dollars. Now we're worth a million worth 1.5 or worth 10 million, 20 million, depending on whatever our spread is. But the whole premise of it is we use somebody else's money to buy it. It goes up in value over time because that's what real estate does. And then somebody pays off the debt for us. It's literally a cheat. Code number five is we get cash flow. So once we get our money coming in from our tenants and we pay off our expenses every Month, whatever's left over goes into our pocket as cash flow. That's gravy, baby. That's just money. Every month, they call it mailbox money. The first of every month, rent's due, pay me my rent. I'm gonna pay off my expenses, and then I'm gonna keep that cash flow in my pocket. So I told you guys that I just locked up 11 units here in the last week and a half. The cash flow on those properties combined is gonna be around 1250amonth, $1250 per month. That's going to go into my pocket after all my expenses are paid. Taxes, insurance, maintenance, property management, mortgage, capital expenditures, you name it. After all that's paid, 1250 bucks is going in my. Into my pocket. That's. What is that, 12,000, 13, $14,000 a year? Anybody excited about that? Would you take an extra 14, $15,000 a year off of 11 doors? I know I would. And that's not even a absolute killer deal. But you start doing this multiple times, it completely changes your life and cash flow. You, next thing you know, you got 5,000 bucks a month coming in. You got 10,000, you got 15, 20. And you have this asset that not only is going up in value, attempts paying down your debt, but now this cash flow is funding your lifestyle. And that's how you escape the rat race, is when you have income coming in from your passive investments that are then paying for your lifestyle. And when you do that, you get off that hamster wheel and life starts to change drastically. And then number six is tax benefits. So we can do depreciation, we can do accelerate, accelerated depreciation. We got write offs. We, we could do 1031 exchanges. There's so many benefits that come from owning real estate from a tax perspective that reduce our tax liability while increasing our wealth. And at the more wealth you generate, you start, you, the wealthier you get. You're not necessarily only thinking about, how do I make more money, how do I build more wealth, but it's more, how do I preserve the wealth that I have? And that is a shift that comes with the more money you have, with the more assets you have. And so I tell folks, when you're first starting out, get excited about the tax benefits. You should, but let's just worry about acquiring as many properties as we can, making as much money as we can. Then as that wealth grows over time, we can start working with CPAs and figuring out, okay, how can we get the most tax benefit? Because if you're only Making, you know, a few, a little bit of money per year. You don't have any assets. Yes, tax benefits are still there, but they're not going to pack the punch that they would if you have a large portfolio. And so if we focus on capitalizing on those first five key metrics, which is leverage, force, appreciation, appreciation, debt, pay down cash flow and build that portfolio up, then the tax benefits are only going to allow us to preserve our wealth later. And this, my friends, is the greatest financial concoction on demand. That's why we buy real estate. Just from a bird's eye view. Those six reasons are why we buy real estate and is why you listening to this should make 2025 the year that you buy real estate. Or if you already have some, make it the year that you go and, and you buy more real estate. So why real estate in 2025? So let's get specific to now. So I gave you the broad reason of here's why we do it, all these six reasons. But why do we want to do it this year? Why am I making such a big deal about 2025? Well, I mentioned it in the intro. I got ahead of myself. But it got very hard to find good deals there for a while after Covid, real estate went on an absolute tear. I mean, do you guys remember houses were flying off the market within hours, you know, and they were, they were bidding wars. And so you had just this crazy market for two to three years and then add increased interest rates on top of that, it got very, very hard to find deals. Well, we're not there anymore. We're not. That's not the market. In fact. In fact, let's see if I got the statistic here. In. Yes, in 2024, it was the lowest numbers of homes sold since 1995. You guys hear me? In 2024 we had the least number of inventory moved in the last three decades. Do you know what that means from a real estate economic, from an investor standpoint, the market slowed drastically. What happens when inventory isn't moving? Prices come down. So somebody, let's just look at a house that's listed on Zillow. If somebody lists a property for sale on Zillow for $200,000, we. Well, two years ago the thing was flying off the market within a couple hours. Now the average sitting time is 45 to 60 days. So what are they doing when they reach that two week mark and their property hasn't got any traction or going under contract yet, they're dropping the price and then Another two weeks. They're dropping the price. They're dropping the price. And so people have tried for the last year, year and a half to still get price at where we were capturing it a few years ago when it was on the real estate tier. And guess what? Data has shown us that they aren't getting it. Inventory just sat least number of homes sold in the last 30 years. And so because homes aren't selling at those high tier products, that means they're dropping in price. What does that mean for us as investors? That means that there are deals galore. And I truly mean that there are deals galore. Let me say one more time, there are deals galore. There are deals all over the place because homes that were overpriced have dropped to the point now to where they make sense as investors. Look, real estate goes through cycles, all right? It cycles. You know, I don't know the exact timeline and nobody does. It changes. But when the law of physics, like whenever there's pleasure happens, pain's coming, right? Or whenever there's pain, pleasure's on the other side. We just went through a red hot market in 2021, 2022, part of 23. We are on the pain side of that now. It was pleasure in real estate, now we're on the pain side. This is what you guys got to understand as investors. You want it to be the pain side. You know, when you're buying, when you're trying to buy real estate, when it's the most popular thing talked about on social media and it's going haywire and you know, everybody's selling their properties for the most they've ever done and you know, prices have increased drastically. That's actually not the best time to get in. And funny, it's funny because that's when it gets popular and everybody wants to jump in. But real estate is to be bought. As an investor, when we're in the colder markets like we are today, this is the time to buy. What's Warren Buffett say? He's like, be fearful when others are greedy and be greedy when others are fearful. Okay, so you're going to hear a lot of people talk about real estate is a terrible play right now. It's not good to buy home prices have been higher than they ever been. Interest rates have been higher, higher than they've ever been. That should signal to you that hey, I need to be looking to buy because everybody else is fearful. That's when you get the deals and then guess what, you buy the deals on this downslope and then what's real estate going to do again? It's going to ride an upslope. And if you look at a graph of real estate, it'll go up, down, it'll go up and down, but it always stays on an up curvature. So you're going to win in the long run. And so I want to encourage you guys to really dive in. Don't listen to the noise of being scared of real estate's not a good time to buy. I have been buying real estate for almost a decade now and I can remember back to 2017, 18, 19, 20, 21, 22, 23, 24, and now 25. And I am not exaggerating. Every single year people have told me how it's a terrible time to buy real estate right now. Every single year. You don't need to buy right now for whatever reason. Interest rates are too high. There's a pandemic. Listen to all the people who didn't buy at the pandemic because they were scared of pandemics going on. Well, look what real estate did the two years after that. People missed out because you listened to a broke person doesn't have any money. Stop taking financial advice. Stop taking real estate investing advice from your uncle who works at the car tire shop, has no wealth, no money saved, nothing invested. Now I got nothing. People, people, nothing against people at the car car tire shop. I love those guys. You guys get the point, hopefully that. Don't take money advice from broke people. Stop listening to them. Listen to people who are already where you want to go. What are they doing right now? Go mimic it. Very simple. Where people who are where you want to be, what have done, what you want to accomplish and what are they doing right now. And then you go mimic it. It's not rocket science. Don't listen to, don't listen to your friends or family. They're people who don't have wealth. They, they live in fear. That's why they don't have wealth. That's the middle class mindset. They were, they were groomed to, you know, be a student, to be an employee and to live the status quo life. Save your money. Save your money. Which leads me to my next point of saving money. Let's talk about that in the middle class. You know, when I grew up, it's just, you got to save your money. No, you should save an emergency fund of three to six months and everything else should be invested. Why? Because the dollar is losing value rapidly. Guess what? The dollar is going to continue to do rapidly lose value. Do you know why? Because the government is going to continue to print money. So the government's going to continue to print money. The dollar is going to continue to go down if you save your money. Every dollar you save is losing its purchase power. I keep cash on hand or in a bank account for emergency funds, okay? And I'm a believer that you need three to six months in an emergency fund. But I know that that dollar is losing its purchasing power every day. And so where the problem lies is when people want to invest at all and they think that saving is the safest bet. I got news for you. Saving is the least safest bet because you're guaranteed that everything that you save is losing value because your government is printing dollars. And your government's going to continue to print dollars. I don't care who the president is, okay? And we got a great economic outlook right now in the US at least with our current president. But even if they. Even if his administration didn't print money, which they will, but even if they stop, the next administration will or the next administration after that, they're gonna. They have a printing press. They have a literal printing press. And it's gonna continue happening. And the only way to hedge against that. Listen to me. The only way to hedge against inflation and dollars being printed is to own real assets. Why? Because real assets hedge against inflation. You cannot save your way to wealth. You cannot save your way to security. The only way you are going to protect your future self and your future family is by investing in assets today that are going to hedge against that dollar and your currency losing value over time. Your future self is literally staring at you 15 years from now, begging you to make the decision to invest in assets and stop holding on to your money. And so inflation has been running rampant. It's going to continue running rampant. And that is one of the main reasons we should start buying or add more properties to our portfolio. Not only to protect us for today, but to protect us for the future. We'll be right back.
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Jaron Sussstar, Host of the Rich Dad Real Estate show and the Jaron Sussar show here. If you're brand new and are serious about getting into real estate this year, or if you have a few properties and are serious about scaling your current portfolio, I've got something special for you. The Robert Kiyosaki, author of Rich Dad, Poor dad and I put together a free ebook that walks you step by step through how to buy your first or next investment property. Whether you're a complete beginner or you've done a few deals already, this guide is action packed with proven strategies and tips that can help make you a smarter investor and make better investment choices. In this book, we're going to break down everything from finding the right property to finance and options, and we even give you insight into how the pros are managing their real estate portfolios in today's market. And the best part? It's completely free. All you have to do is head to the link in the show notes below or or go to your first property co to download it right now. I believe 2025 is going to be one of the best years for real estate investing that we've seen in recent history and I do not want you to miss out. Plus your future self is counting on you to make good decisions today so that they can live a great life later. So go to your first property co or click the link down in the show notes to grab your free ebook today. Welcome back to the Rich Dad Real Estate show where we talk about the good news and bad news of real estate. Number three, I love this one is baby boomers are sell almost 10 million homes over the next decade. So you guys may or may not have heard of this, but there's the greatest transfer of wealth in our existence that is happening right now. Baby boomers are phasing out. They're getting older, they're passing away, and they're selling their businesses and they're selling their real estate. And the way I buy real estate. And I'll talk a little bit more about here about this here in a minute on when we get into the details of what are we actually buying in 2025 and how do we buy it. But I usually like to buy ugly houses. And my little joke is I buy ugly houses and I make them pretty, right? So we want to find, you know, these older distressed, ugly carpet, ugly finishes, ugly kitchen, ugly bathroom homes, fix them up. And now we've created a bunch of equity, AKA a bunch of wealth for ourselves. And we're going to bring in cash flow as a rental or we're going to sell it as a flip. Well, who do you think owns a lot of these old ugly homes? Baby boomers. No offense to any baby boomers on here. I love you all. I have a lot of baby boomer family. You are amazing and you've instilled a lot of wisdom in us. But your taste in your homes is atrocious. I swear, you'll have the ugliest house. You walk into a baby boomer's home, it's like they still got 1970s shag carpet or you're going to the bathroom and they've got those little square towels. And some of y'all may have this. I love you. I'm saying all this with love, trying to help you out here. But they've got the little square tiles on the wall and they'll be like lime green or pink. You guys know what I'm saying here, right? You guys are tracking with me. Or they got the decorative, like, wood piece up above the sink that's kind of wavy. That's my favorite, man. Anyways, I commend you guys for saying, you know what? I don't care what modern people should say. My house looks like I'm keeping it How I want. So good for y'all. But for us investors, it's a fantastic opportunity to be able to capitalize. And you're going to be able to help these people, too. You know, a lot of people just think real estate investors are bad people. That's just not true. We're able to help so many folks. These baby boomers have to move. They need to move to an assisted living or they need to move to a smaller place where they're not keeping up with the yard anymore. They need to sell it or their children inherit the property and they can't afford the taxes, they can't afford the maintenance, whatever the case may be, they need to sell the property. Us as investors are able to come in, buy it at a deal that's good for them and at a deal that's good for us. They're able to move on with life. We're able to then increase the quality of that neighborhood, give quality housing to either a tenant after we fix the property up, or we can sell the property as a fix and flip and help somebody get into their first starter home or, you know, their, their second home. And so we're able to really help the flow of quote, unquote, humanity and humanity's housing as this next generation phases out. What we don't want is these homes going into foreclosure or these homes sitting there for decades and rotting. That's how neighborhoods go downhill. And so we can help keep neighborhoods thriving and alive by keeping them up to date. And we have a duty to do that as investors by finding these folks who are needing to get rid of their homes, getting them and then making them into what they could be. And then I think fourth for why we need to buy. And I've already hit on this in 2025 as a positive outlook for the future. I just, I mentioned a second ago, the real estate goes in cycles. It's been really hot now. It's cold. It's going to get hot again, guys. It's just all there is to it. You know, rates mixed with home prices have slowed down the market. People were locked into a 2.93% interest rate. And then prices went up. They just couldn't make sense for it to move. Well, prices are coming down, okay? So that, that's one side of the equation. Rates are still right here. Rates are going to come down. And then as that happens, there's going to be an uptick in the market. And then, you know, real estate's just kind of gradually like this right now. Not, not doing too much. When those rates match those prices, you're going to look at about a two year, I don't want to call it a frenzy period because I don't think it's going to be as crazy as when there was 3% rates. But when those rates get to 4 and a half, 5%, people are going to jump from those 3 to 3 and a half percent, from those 3 to 3 and a Half percent rates to those 4 and a half to 5% rates to go get the house they want. There's going to be a lot more activity. It's going to drive prices up again. Okay, look, rates, here's what I'll tell you. Prices of real estate. The price of real estate is going to, if you look at a graph, is going to go up like this over time. Okay? Rates are always going to go up, down, up, down, up, down. It's just the name of the game. And so I encourage people don't let rates deter you from getting in. What rates do in the short term is they affect short term cash flow. Guess what? That's okay. It sucks, right? Because if you look at a property that you were going to buy as a rental property and you're buying it with a 7.2% rate, which is what I just got quoted yesterday, and then you look at a property and let's say you were going to get a four and a half percent rate, you're looking at maybe 100, depending on what the rents are, you could be looking at 150 to 300 bucks difference or more in cash flow. So you're going to take a hit. When you're keeping rentals right now in a high interest market, your cash flow is not going to be as high as it could be. But what we have to do is we have to say, okay, cash flow is not as high as it is as it could be because rates are high right now. But I know this Jaren dude told me this rich dad, real estate expert Jaren guy says rates go up and down. Then go fact check me and you'll see the rates go down, up in time. So if we buy good real estate at a discount now, leave ourselves some breathing room for equity. We know that, okay, we've got good equity, we've got an appreciating property. Tenants are paying down my debt. Cash flow is not where I want it to be today. But once those rates drop down to four and a half percent, 5%, 6%, then I can refi. That's going to lower the cost of my debt. And now I've already got a good property in a good area that has a lot of equity for me. Now I'm just going to increase the returns on this property by bumping the cash flow because the rates went down. And that's how professional, seasoned investors think. Right? And so it's been nice to be quite honest with you, as somebody who's been doing this a long time and understands the game, to not have to deal with as much competition. There was so much competition in 21 and 22 because everybody wanted to be a real estate investor because the market was hot, right? Well, now the market's not hot, so it's not popular. Rates have been higher. So it's like, hey, if you just listen to what I'm saying and do exactly what I'm doing, you're gonna go in. Because there's not a ton of competition out there and there are tons of deals to be had. And so I really want you guys to take these things in. Understand that inflation is gonna keep going up, hedge against it. With real estate, there's deals galore. Right now. We got a positive outlook for the future. And baby boomers, the ones who own half the ugly homes they're selling, and we need to go buy them, and we need to keep these neighborhoods looking pretty. So that leads me to point number three. What in the world do you buy in 2025? What type of real estate? Well, you've got. I mentioned this earlier. We got apartments, we got commercial properties, we got warehouses, we got self storage, we've got land. I mean, we could go through the whole gamut. There is such a wide array of things that you could choose different types of asset classes within real estate. And I want to be very, very clear, you can make money in all of them. They all beat saving dollars. You're not going to save your way to wealth. So choosing any of these avenues would is the better choice than saving your money. But here's what I want you guys to do. Here's the direction you're getting from me. For 2025 and even 2026, I want you guys to focus on residential homes. So this can be a single family home up to a quadplex. Okay? So you got duplexes, two doors, triplexes, three doors, quad plexes, four doors, all the way down to a single family home. Okay? And I really like the single family home. And let me tell you why. Let me tell you why. Especially for you guys starting out or for y'all who have a Few properties and you're wanting to scale. Number one, they're very, very easy to find. Homes are everywhere. They're a dime a dozen. Okay, so we're not having to go search and put a lot of marketing in and sweat equity. Dude, you can find a house. I can literally leave my office, go drive for 10 minutes and I can find three vacant houses right now. And most of you guys could do that. Okay? So they're very easy to find. Number two, it's very easy to know what they're worth. Right? So if we want to know what a home is worth, then we're going to get on Zillow and we're going to see what recently sold homes that are comparable to the ones one we're looking at. Same bed, bath, same square footage in that range and we're going to see what they sold for and that's going to tell us, oh, okay. Homes in this area are selling for X amount dollar per square foot. And then when they're fixed up, they're selling for this amount dollar per square foot. And it's literally as easy as hopping on an app and looking at recently sold homes and seeing what they sold for price per square foot. So we can learn to analyze and then we can analyze very, very quickly when looking at these properties. Number three, it's easy to get funding for how many times the banks lend to, to residential properties daily? I mean probably millions in the, I mean it's 300, 300 million people in the U.S. there's what, 8 billion people in the, in the entire world. There's probably millions of lending going on for residential properties every day. It's common. So to go to a bank and get a loan for these, these homes are very, very easy. And then my favorite reason is there's multiple exit strategies. And this is why I think it's important for somebody starting out. So if you buy an apartment complex or you buy a commercial property or a warehouse or self storage and you want or need to sell, who can you sell that to? Another investor. Right. That's the only other person you're going to be able to sell to. You're not going to be able to sell it to just, you know, the random person on the street. But when we are looking at homes, single family residential homes, they appeal to the masses. What is the American dream? It is to own your own home. And so if you have a property that you've bought and you've fixed up and you list it to market, you're now marketing to the masses. And so you've opened up the window of opportunity for somebody to buy your property. Also, when it comes to renting your property, you have a way larger pool of people who would want to rent your property. And so when you're looking as a newer investor, having those multiple exit strategies are fantastic. Plus, not only can you sell them to the general public as the American dream, but you could also sell them to investors as well. But unlike the other asset classes, you're not limited to that. Now people will talk about, you know, yeah, you need to start in residential, then you can graduate to commercial and larger deals when, when you're, you know, when you get bigger or whatever. And you know, I don't tend to agree with that. I invest, I have, I'm invested in skyscrapers, warehouses, land, you name it, I own all of it. But to this day, my number one, number one asset class still to this day are residential properties. Okay? So don't let anybody tell you that again. You can make money in all of them. This isn't some kindergarten thing. I do think it's easier to start here. You can stay here your entire career and make a lot of wealth and completely change your life, or once you get the hang of it, then you can go and try some other things that are a little more niche down. And I don't want to say they have more risk, but they're not as accessible and easy to learn. Fine, let's do it. But I want you guys to stay focused this year just on those residential properties and they'll change your life. Okay? So once we've done that, we've got to narrow down our focus to say, okay, where are we going to find these property? So I told you, we're going to focus on the residential. Now what are we going to, where are we going to find them? Okay, what I recommend is what I call B2C class areas. So not the worst part of town and not the best part of town. Okay? So your best part of town is where your doctors, lawyers, attorneys and all of them live. Most of the time it's hard to make deals make sense there because the homes are too expensive. And then we also don't want to buy in the war zone areas. D class neighborhoods where there's a lot of high violent crime. It's not a good place to own. We want to own in the working class areas. So the B2C class, where the standard average person live and where the old baby boomers live and the hospitality workers, the teachers, the blue collar jobs, those are the great neighborhoods, because there's a lot of opportunity there to find undervalued deals. But then they're in good enough areas to where they're still going to appreciate and gain in value over time. But you can also still get cash flow. Once we narrow, narrow down those neighborhoods, we're going to go look for distressed properties. All right. And that's kind of a strong word. I probably need to come with a different word than distress, but that's the word in the, in the industry. But just think, you know, like I was making fun of the older people earlier. The 1970s shag carpet, the tile, ugly tile in the bathrooms, outdated kitchen, outdated fixtures, you know, ugly paint, just overgrown roof nature. But whatever the case may be, it's just a. It doesn't fit in. It's a home that is ugly and needs love. Right. Those are the homes we're looking for. And once we find those, then. And this can go hand in hand, whether we find the property first or whether we find the owner first, we got to find the motivated sellers. Okay, so who own those homes. And again, you can start with the sellers, and then, you know, the house appears. Or you can start by driving around, find the house, and then reach a hold of the seller. But there's three things that I really focus on when I'm. When I'm reaching out to people to try and buy their property. Okay. So you can get in the weeds here, and you can focus on a lot of different distressed sellers, and that's sellers that are in totally different places in their life. Whether it's a recent divorce or whether it's foreclosure or their house is going to go to tax or whatever. There's a lot of different things. Like, you can. You could dial into any and a lot of those and do. Okay. But the three that have worked best for me, I want to share with you guys today because you can get too scattered. And especially when you're starting, I think it's good to narrow down so that you're not just trying a bunch of different stuff. It's smarter to be able to narrow down on two to three ways that you're gonna reach distressed seller and then collect some data and see what's working before we go try anything else. So, number one, the best thing I do for finding motivated sellers is looking up vacant homes. So you can do this two ways. You can drive around, which is the best way. Or you can use softwares. There's different softwares that you can use that will pull list of vacant homes in your target market. It start there. If a home's vacant, you got an opportunity to grab it because it's just sitting there. People with vacant homes that tend to want to sell, right? Unless just they got a bunch of money and they're holding onto it for sentimental reasons. But I don't usually see that. Most of the time it's somebody who doesn't know what to do with it. Then they're stuck paying taxes. Let's start with vacant number two is out of state LLC owners who have equity and property and they've owned for three plus years. I have bought a number of properties by sending mailers out to llc, owners of properties. So they own properties in an LLC in my target market, but they live out of state, they're not around the property, they're not local. They found a deal on this property somehow, they bought it in a package, whatever the case may be, three years ago. And oftentimes when I will approach them, they've got equity in the deal, they've had it three years. They don't want to have to deal with the turnover once the tenant leaves and put more money in it. And they are inclined to sell. And so that has been a great lead generator for me over the years. And then number three is estates. So this is a spouse who has just had another spouse pass away and they're having to move. And this sounds terrible, but it's a fact of life. And we don't do these people wrong. We don't exploit them. We explain to them exactly what we do. We tell them what our offer can be, how we can buy cash as is. And a lot of times they are so thankful because they have so much junk that they've accumulated over years because they're usually older, they don't know what to do with it. Especially if it's a wife left and her husband passed away, she's having to move in town with her daughter having to move in a townhouse. And she's like, I got so much junk in here, I can't pay to have it moved. I, I can't move it. I don't have family here to help me. And I come in and say, listen, you don't have to do anything with this. We'll buy the house as is, we'll take care of all this, blah, blah, blah, blah, blah. So we're able to help these people who they just lost their spouse, they can't live there anymore. They don't want to live there anymore. They just want this house off their hands and we're able to take it, fix it up, make it pretty and help the neighborhood. And then, or it may be a scenario where both spouses have passed away and now the children have it. And so the children don't want to have to deal with the property anymore. They're having to pay taxes on it. They can't afford the taxes. They got one sibling, I bought one property one time where the older sibling was ready to sell it. The younger sibling was still living in there. But the older sibling that want the younger sibling living in, living in there because she'd been mooching off the parents for years. And so that was crazy. But we got the younger sibling out. It took two weeks after I closed on the property to get her out. But the moral of the story is, you know, there's a lot of opportunity there when you are buying properties from children of parents who pass away. They left in their houses and they don't, the kids don't know what to do with them or they can't afford them. And so those have been three ways that I've been able to help sellers out by taking the properties off their hand and make them nice vacant homes out of state LLC owners who've owned a property for at least three years and they got some equity in the deal. And then estate sales, whether it's the spouse has just lost a spouse and they gotta move, or the children inherited property from their family and they don't want it. And so then you go to okay, cool man. How do I contact them? Well, it's pretty simple. You can drive for dollars. So drive around like I said and find these vacant homes. Pick up the phone, you can find their phone number. There's apps, I use one called Deal Machine, but there's tons of apps out there where you can find their phone number. You can call the owners, right, and say, hey, I'm interested in purchasing, would you sell? Another way is networking. I get a lot of deals just from networking, going to networking events or posting on my personal Facebook page. Hey, looking to buy some properties in the area. Does anybody know of anybody who's looking to sell? Right? And so you start getting into the real estate world and investors start letting you know of deals they're selling. Like I just bought this nine unit portfolio or we're in the middle of purchasing it, it came from another investor sending it to me, right? And you know, getting in with brokerages, other brokers who talk with other investors who are looking to sell deals, just really getting Your tentacles in every part of the industry so that you're getting leads. And then the third thing I do, I keep it real simple, is I send mailers out. So if I am driving down the road and I see a home that I'm interested in, I'll send mailers or I'll pull a list on a software like deal machine of LLC owners who live out of state, who've owned a property for three years with equity, and I'll send them mailers. I closed a duplex recently. A guy in California owned a duplex in my neighbor, in my. In my. Not my neighborhood, but the area that I live in. He got my mailer. He called me, hey, dude, I got your mailer. Are you. Are you a wholesaler? I said, no, I'm not a wholesaler. I'm a buyer. He said, good, I don't want to sell to a wholesaler. I only want to sell to an end buyer. He said, do you buy in cash? I said, we can buy in cash. He said, great, what's your offer? And so I looked it up. I think the duplex is worth 150k, and I needed to leave some meat on the bone for me to make a deal. He had bought the property for like 60 or 55k a couple years ago. I said, hey, I'll offer you $85,000. I think he countered at 90 something along those lines. We agreed at 86,900. Close the property. I had to put 15k in it. So I'll be all in at 100. Now it's worth 150k and it'll either cash flow a couple hundred bucks a month, or it's going to sell and make me a $50,000 gross profit. And that came literally by me pulling a list on a software of LLC owners who live out of state, sending that dude a mailer. He lived in California, got the mailer, called me, and we got the deal done. This stuff works, guys. And right now is the time to do it, okay? And so I want to encourage you, for your future, to take what I said today and go put it to work. I feel like this is a pretty actionable episode to where I'm walking you through exactly why you need to do it, how you need to do it, where you need to go to get it done. And there's really no excuse other than you to go and do it. And I believe in all you guys. I think you can do it. And, you know, I'll remind you. And I said this at the beginning of the episode. I'm going to teach more in depth on this Thursday night, my free webinar. Okay, I'm going to do a free training, teach you guys how to buy your first or next deal in 2025. There it is on the screen. Burnwithjaren.com webinar/or-registration. Go sign up now. It's completely free. I am going to take what I did today and I'm going to go even more in depth. We're going to talk about analyzing properties, whether it be a rental, whether it be a flip, how to make those offers, how to get the funding, all the good stuff. We're going to take it a step further Thursday night and so I want to make sure you guys are with me. We'll put that link in the show notes so that you can be there. But the key for you is find a way to get into the real estate game in 2025. It will completely change your life. Thank you guys for hanging out with me today. I love it as always, and I'll see you next week.
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This podcast is a presentation of Rich Dad Media Network.