3% Interest Rates in 2025? This “Hack” Unlocks It

0:002025 is a brand new landscape for real estate investors. Whether you're growing your portfolio or investing for the first time, you sort of need to understand the tactics that work today, not the tactics that work yesterday, not the ones that are going to work in 2026, the ones that work right now. So today I'm sharing my top five real estate hacks of 2025 that you need to move forward on your path to financial independence. Do you want a 3 % mortgage? I bet you do. So watch and find out how to get one.

0:37Hey everyone, it's Dave, head of real estate investing at BiggerPockets and an investor for 15 years now. And honestly, a lot has changed in those 15 years. And also in some other ways, nothing has changed. For me, the big picture stuff is really all the same. I still take a long-term approach to real estate investing. I'm always looking for the highest risk-adjusted returns, no matter what year it is. I look to buy great assets at good values, in other words, in good prices. I want to continue to earn active income as efficiently as possible, so that gives me more money to invest. None of that stuff really changes.

1:19That's my big-picture strategy. But the tactics, the stuff that you're actually doing each and every day, that stuff actually has changed. The type of assets I look for, the types of financing, actually even the markets that I invested, those have and will continue to evolve. So in today's episode, I'm going to be talking about five tactical things that almost anyone can use to get ahead in 2025. Some of these are things that I do myself. Some of them are tips that come from the hundreds of conversations I have every single month with successful investors. And today I'm sharing them all with you.

1:58All right. My first number one hack for tactics you should be using in 2025 is to be offer ready. And when I say offer ready, that means that you are ready to pounce. You have all of your ducks in a row so that when you find a good deal in this market and good deals will emerge in this market, we'll talk a little bit more about that in just a minute. But if you have all of your ducks in a row, you will be able to capitalize on the transitional market that we're in. Right now, if you look at the data or you just talk to real estate investors who are doing things on the ground, what you see is pretty clear that there's a split in the market.

2:41Inventory is going up. And so there's more deals and still the majority of them are bad. You don't want them. And that's kind of always the case in real estate investing. You're never going to have a time when everything that hits the MLS is a good deal. But right now, to me, the difference between good deals and bad deals is particularly wide because a lot of sellers are just stuck thinking that they can get prices from last year or two years ago. Well, that's just not true in the majority of markets. Meanwhile, some people are getting more and more motivated. We're having more motivated sellers.

3:14So that means better deals are coming, but they're going to be few and far between. And that means the people who are going to succeed in 2025, find great deals, add to their portfolio are the ones who are ready to pounce on those opportunities when they find them. So that is sort of the overarching hack that I want to share with all of you. But there's actually like a couple of other steps that you should probably learn about in order to actually be offer ready. The four things you really want to focus on is one, your team. That means having a great investor-friendly agent, because if you're going to write offers for the majority of people, they need an agent to be able to do that.

3:55You also need an agent who is really good at comping in today's market, because as I just said, prices are all over the place. And so if you find a deal that you like, it's a great asset, you need to not only make sure that it's an appropriate price right now, but ideally in 2025, you want to be buying below current comps. A lot of markets right now are at risk of modest declines, one, two percent, something like that. So ideally, when you're buying right now, you buy one, two percent under current comps. That's going to protect you. And a great agent can really help you do that. We have ways to match you with agents on BiggerPockets.

4:34If you don't have one of those, Go to biggerpockets.com slash agents. You can get matched for free. So that's one. Obviously, you also need the other elements of your team as well. I think that's important to have a lender, of course, to have a property manager if you're doing a buy and hold. And if you're going to do value add, I think it really helps to have some contractors lined up. Now, every deal you do, you're going to have to go out and get it bid. But having initial conversations with two or three contractors so that you know that when you go out and make an offer on a deal that you can execute on your business plan quickly, that is going to be super important here in 2025.

5:12The second thing is, of course, just educating yourself. This is kind of always true, but I find that a lot of people start looking at properties and looking at deals before they fully understand exactly how to operate their deal. And that is what gets people frozen when they actually see a good deal and then they're unable to pull the trigger because they lose confidence. They don't feel like they actually know what they're doing. And so that's the other step in being offer ready is just knowing exactly what you're trying to do and having a game plan for what your buy box is, how you're going to execute that and learning everything you need, whether it's through this podcast, through YouTube, whatever it is, go learn what you need to know before you start looking at deals.

5:55The third thing you need to do to be offer ready is to get a pre-approval. This is super important because right now, what I'm seeing, at least in the deals that I've done in the last two years, is that I've not necessarily had the highest offer for my deals, but I've had the strongest offer because I'm reducing the risk for sellers. I give them a very clear look at who I am and that I'm going to close on the property. The biggest problem for sellers right now is, yeah, prices are going down. So it's not, that's the biggest problem. So maybe the second biggest problem is that a lot of contracts are getting canceled.

6:35They, you know, people put something under contract and they can't get financing or something falls apart. And so personally, my strategy for bidding on properties has been to either put more money down, more earnest money, have a really good pre-approval, pre-qualification ready to offer to show that I'm serious. And there, unless there's something bad that comes up on the inspection or there's something on title, then I am going to close on this property. And so having a conversation with your lender to position yourself for strong offers is super important in 2025. The last part of being offer ready is something I call benchmarking.

7:12And I should probably talk more about this on the show, but it is something I do pretty much every day. And I really recommend that people do in their investing career. And this is basically looking at a lot of deals and figuring out what the average deal is in your area. That's why I call it benchmarking. It's because you need to come up with a benchmark of what you can get on an average deal in your market with your strategy. For example, if you were to go out and buy a duplex in St. Paul, Minnesota, what's the cash on cash return you're gonna get? What is the financing you're going to get? What is the rents you're going to get?

7:52If you don't know that cold, it's going to be really hard to spot these good deals. When you're out there and there's a lot of garbage, but a lot of good deals, you need to be able to compare it to a benchmark. You need to look at the deal in question and say, is this better than the average deal in my market? Is it worse than the average deal in my market? And if it's better, which it needs to be for you to actually offer on it, how much better? Is it 5 % better? Is it 50 % better? This exercise, I think to me, has always made me feel confident when I offer on a property because I know I've looked at 50 deals this year in certain areas of the Midwest.

8:31I haven't offered on most of them. But when those come around where it's like, oh man, this one is better in every way than all the other deals I've been looking at, that's when you know how to pound. So I really recommend that you do this benchmarking. That's by analyzing deals. That's one way to do it. The second way is we have a tool, free tool in BiggerPockets called BiggerDeals that allows you to look at cashflow and expected returns on properties. And then the third way is just talk to other investors. Talk to people in your market who are doing deals, who have done deals recently, and see what they're getting.

9:05They'll probably tell you, whether it's on BiggerPockets forums, at ARIA, local friends, whatever it is. Ask them what their cash on cash return is. Ask them what their mortgage rate is. Find that out. because knowing what the average is and knowing that you as an investor, your job is to do better than that average. That's gonna enable you to go out and execute on those deals. So again, this is my first hack, kind of a conglomerate hack. It's like five things in one, I know. I'm cheating on my own episode format here. But I really think being offer ready is sort of the key to jumping on good deals right now.

9:39Again, those things that you need to do to be offer ready, to educate yourself, have a great team, get that pre-approval locked up and your financing locked up, and then do benchmarking so you're able to identify the deals and then go execute on them quickly. To me, this is gonna be a huge divider for which investors succeed and which one just sit on the sidelines in 2025. So that's it. That's my first hack for 2025. I have four more great hacks for you, but we need to take a quick break. We'll be right back. This week's bigger news is brought to you by the Fundrise Flagship Fund. Invest in private market real estate with the Fundrise flagship fund.

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13:47Welcome back to the BiggerPockets podcast. I'm Dave Meyer sharing my five real estate hacks for 2025 that actually work. The second hack is something I've used a few times in the last year now, and I feel like this is kind of the perfect tactic strategy for 2025, at least for me and the way I approach real estate investing. It is called the Delayed BRRRR. I need a better name for it. If anyone has a good name, drop it in the comments, either on YouTube or on Spotify, because I could use help branding this. But basically what it is, is the BRRRR method, which stands for buy, rehab, rent, refinance, and repeat.

14:25The idea behind a BRRRR is that you take a property, a rental property that is not up to its highest and best use, you renovate it, you increase the capacity to generate rents from it, then you rent it out to great tenants, you refinance it to pull some of the equity that you built by improving that property out, and then you take the money that you refinance and you invest it into the next deal. And what's so appealing about a BRRRR is that it allows you to sort of recycle your money. You are able to get a lot of the benefits of doing a flip, but you get to hold on to the property and get that passive income that over time is going to snowball and help you achieve financial independence.

15:06Now, the Burr Method, a lot of people have been saying that it is dead. And I think that is nonsense. We have guests on this show all the time who are successfully doing the Burr. But I think the reason people think the BRRRR is dead is because there is a period of time for a while when you could do this strategy and you could pull 100 % of your equity invested out of a deal. And that's pretty hard right now. I think if you get 70 % out, you're doing great. If you do 80%, you're doing excellent. That's still recycling 70, 80 % of your capital. That's an amazing investment you can't do pretty much anywhere else.

15:41So I'm still in personally on the BRRRR method. The way I'm thinking about this and trying to mitigate risk in a confusing market, but I am still trying to acquire rental properties for my portfolio. And the way I'm thinking about doing that is by finding BRRRR deals that can work as rental properties today, even if I don't do the renovation. So I think this is a tactic that works particularly well. One, for people who have capital and don't need to be perfectly optimized about recycling every single dollar that they have. The second one is for new people. If you are a newer investor, it can work really well to have a great sort of low risk, high upside deal.

16:23The delayed BRRRR is a really good thing to consider. Let me just give you an example. I bought a duplex for about$250 ,000. The rents at the time were about$2 ,200 per month. So not quite the 1 % rule, but getting close. So that property was cash flowing. It wasn't incredible cash flow, but it was pretty solid cash flow to the point where I could hold on to this deal for six months. I could hold on to it for a year or two years if I needed to and still be earning a better return than I would be earning in the stock market or a lot of other places. And the reason I like doing this is because I bought this property with tenants in both units and they were good tenants.

17:08And so I didn't really see a reason to kick good tenants out of a property to spend more money and renovate. Instead, what I decided to do is just see when these tenants chose to leave on their own. And when they did that, I would update the units as well as I could and hopefully drive up the rent. And that's exactly what happened. It took about a year and a half. And I mostly invest in like sort of downtown areas where it's a lot of young professionals. So the turnover is relatively high. So I had a fair degree of confidence that this would be a year or two or maybe. The first one didn't renew their lease after about six months.

17:45So I spent three weeks renovating. It was just cosmetic. I didn't need a ton. So three weeks renovating it. I drove up the rents on that particular unit. I think it was from$1 ,100 to$1 ,400. So that's another$3 ,600 a year in income on this property with a relatively cheap renovation and only one month of vacancy. That's the reason I love this delayed burst because if you're going to do it all at once, you sort of have to kick out your tenants and you have risk of just higher holding costs and higher vacancy costs. This way, it was very minimal. and I could plan it really well. Then I think it was like another six months after that, the other tenant left, I did the exact same thing.

18:23Right now, my rents on this property are about$2 ,800 per month. I think I put a total of$20 ,000,$23 ,000 in. So I am now above the 1 % rule, even with all of my investment that I put into rehab. And I was able to do this in a relatively relaxed way. I do this stuff out of state. And so it allowed me to not have to really nail the timing on everything to work perfectly. Instead, it just allowed me to do a really high upside deal, but over time without a lot of the risks of being so dependent on your schedule that sometimes happens when you're trying to really recycle your money as quickly as possible.

19:05I think this is a great strategy for 2025 because risk management is essential. I am looking for optionality. As I said earlier, I think there's some markets where properties prices are going to decline by one or two percent. You know, the labor market's holding up pretty well, but there's a chance we see an uptick in vacancies just nationally this year. And so I'm looking for ways to create optionality. And I think the delayed burr is a great way to capture upside. It can still be a home run deal, but it gives you more optionality and helps you mitigate risk. So that's my second hack for you today.

19:41My third hack for 2025 is look at secondary and tertiary markets. Now, I know everyone wants to invest in the super hot markets. It's the Raleigh's, the Nashville's, the Tampa's, the Austin's of a couple of years ago. Those are the big, sexy markets where everyone's moving. They're the headlines where all the companies are moving to. And they're great. A lot of them are seeing a correction right now. But long term, these are great markets with strong fundamentals. I have nothing against these markets. But what I am seeing, and I look at this data quite a lot, is that a lot of the opportunity right now in 2025 lies in, I would call, secondary or tertiary markets.

20:24So these are smaller cities where they are still strong fundamentals. Don't get me wrong. Don't just pick a smaller city. It still needs to be a place with job growth and population growth, affordability. Those kinds of things absolutely need to happen. But these second and tertiary cities just are more affordable, right? These are more affordable, not just for people, but for businesses, too. And you're starting to see job growth pop up and accelerate around some of these smaller cities. And to me, that means population will follow and it will mean housing prices and rents will follow as well.

20:57And I want to make clear that in some cases, this does mean out of state investing, but it doesn't necessarily have to be. You can still invest in a secondary or tertiary market, even if you live in a big city. Just for example, I used to live in Denver and I invested there, still do invest there. And honestly, I missed the boat on Colorado Springs. I was never even thinking about it at that time because Denver was a great market. But Colorado Springs, about an hour south of Denver, and it was a much more affordable price point for a lot of the time I was living there and investing there. And I could have invested in there and got a lot of appreciation upside.

21:35There are other cities close to Denver, like Longmont, that you can do, right? There are tons of examples of this all over the country, right? Instead of Cleveland, which is affordable, but maybe you go to Akron. Or instead of Nashville, you look at Knoxville. You know, the economic engine that is Denver spills over sometimes into these secondary and tertiary markets. The same thing is true in other big cities throughout the country. And so, you know, look at Dallas, right? That's kind of like a megatropolis. Like Dallas itself has its own thing. Fort Worth has also grown as a product of Dallas, right?

22:10And so these are things that you can be thinking about as an investor, whether you want to do that out of state or in state. My thesis for like two years, my investing thesis I've been saying is a lot about affordability. I really believe that the defining challenge and opportunity in the housing market is that housing is just unaffordable and it's unlikely to get better anytime soon. And that reality or that thesis, I should say, it's not a fact, but that reality that I don't think it's going to get a lot better soon, I think it will get better slowly over time, means that the markets that are affordable have more room to go up.

22:47That's the basic theory. And so we're seeing this in reality. The theory has so far proven true. We'll obviously have to see where it goes from here, but that's generally the hack that I am operating on myself. All right, that was our third hack. Just as a recap, number one was being offer ready. Number two was trying the delayed burr. Number three was considering secondary or tertiary cities. I got two more hacks for you, but we gotta take a break. We'll be right back.

23:14Brandon Turner:A few weeks ago, I took a trip down to Pensacola, Florida with my dad and my kids. We spent our days at the beach and the pool. We cooked dinner together one night, and I got to experience the simple joy of just watching my dad suck up time with his grandkids. We played a round of mini golf that ended up being the best part of the whole trip. And it was one of those visits where you just slow down with the people you love and realize how much these ordinary days together actually mean. But while I was gone, my house was just sitting there empty. That got me thinking about something I hadn't really considered before.