4 High-Return, Beginner-Friendly Investing Strategies for 2026

0:00Tony Robinson:So you want to invest in real estate, but you're not sure where to start. Don't worry, we have all been there. And I understand that all the information about real estate investing out there can be somewhat overwhelming. So today, we're simplifying it. Rookie investors, these are the strategies that are working in the current 2025 housing market.

0:24Tony Robinson:Hey everyone, I'm Dave Meyer. I made my own rookie real estate investment in 2010. And now, 15 years later, I'm the head of real estate investing at BiggerPockets. Today on the show, I'm joined by an expert in early stage investing, Real Estate Rookie Podcast co-host, Tony Robinson. Tony, thanks for being here, man. Dave, I appreciate it, man. I'm super excited to dive into what's working for rookie investors today. It feels to me that the strategies that work for rookies, maybe even a couple of years ago, have changed a little bit. Is that what you're seeing? I think there's definitely been a shift in the level of preparedness someone needs to do well today.

1:06I think the strategies maybe still work, but how you jump into them and the bar that's needed to be successful has maybe shifted.

1:11Tony Robinson:Oh, okay. I like that perspective. Well, let's just jump right into that. So tell us a little bit more about what you're hearing from the rookie community and maybe just extrapolate a little bit on what you just said about level preparedness. Yeah, I think there's one big thing, Dave, that's swirling around the minds of a lot of folks who are looking to get started. And that question is, is now a good time to start investing in real estate? I think that's the biggest question that we hear now more than ever before. And it makes sense, right? I mean, there's obviously, you know, the data better than anyone, right?

1:42But there's the interest rate environment that we're in. There's the inflationary period that we just went through. There's the affordability issue that we're dealing with. So there's definitely a lot of pressure on being a successful real estate investor today. And because of that, there are a lot of folks who are asking, does it even make sense to get started? But I still firmly believe, and we've interviewed enough Ricky investors, I've talked to enough seasoned investors, and I still believe that the firm answer of when is the best time to invest in real estate is yesterday. Yeah. Because it's like, let's say that interest rates, when they were really high, and people were waiting for interest rates to drop.

2:20I think that was such a bad decision because if a deal works at a 7.5%, 8 % interest rate, if you're still cash flow positive, that deal is only going to get better when rates go down to 7 or 6 or if we get back down into the fives. If you were to wait on that deal, by the time the rates get down to seven or six or five, you're now competing with 30 other people for that same property and maybe spending even more on that deal than what you would have spent at a seven or an eight percent interest rate. So I think people just need to understand that we can't time the market. And the goal is, can we find a deal today that works?

2:55And if it checks all of the boxes, then let's move forward with it.

2:58Tony Robinson:I couldn't agree more. I think there are trade-offs in every kind of market and people people felt it was easier to get in in 2022. They look back at that and say that now, but I don't know if that was true as a rookie investor. You would have to be super aggressive with your bidding. You wouldn't be able to go look at the properties. You're waiving contingencies. There were trade-offs with that too. So I totally agree with you that if you can find a deal that works, then you can do it in really any kind of market. I'll just add that it's okay if you're concerned about the market to make your criteria about what quote unquote works a little bit stricter and to be a little bit more conservative about the returns that you want to get on your first deal to make sure that you protect yourself in some downside case.

3:45Tony Robinson:But I think it's as good a time as any to get into real estate. There's always going to be barriers. It's always going to be challenged and take some work. But I actually think for rookies, the lack of competition could be something that's honestly better than a super fast appreciating market. Dave, you just hit on something that I think is super important. I feel like right now we are in a phase in the real estate cycle where as buyers, we have more leverage than what we've seen in the last like five years or so. And I was just talking to an investor yesterday and they were buying their first short-term rental and they were able to negotiate a$100 ,000 discount on a property.

4:27Unreal, yeah. $100 ,000 discount on the property. Three years ago, four years ago, that would have been impossible, right? It would have been the other way. You paid$100 ,000 over asking. Yeah. You paid$100 ,000 over asking. So I think for the people who are looking to invest right now, just get the offer out because you don't know the sense of the seller or what their motivations are. And if you just get the offer out, you might find someone who's maybe at the point to really negotiate. So that's the first part, Dave, is just I think that we are in a space where it is conducive for folks who are looking to get started.

4:56Tony Robinson:All right. So let's talk a little bit about preparedness. So you mentioned that at the top of the show. Can you explain a little bit more about what you mean by that? First is that I think that what holds a lot of would-be investors back is maybe a mindset issue and not necessarily a technical or skill set issue. When I talk about mindset, it's really kind of two separate things. One is the dreaded analysis paralysis that so many people deal with. What I always tell folks is that if you're listening to the BiggerPockets podcast, and as you go through and listen to the interviews, you're like kind of nodding your head, like, yeah, I've heard that before.

5:33Yeah, actually, I do remember. Yeah, that's what this term means. And you're like able to really track and follow along with like 90 % of the conversations. Chances are it is analysis paralysis and you are ready. So I think that's one piece is just knowing when do you take the step from education to action? And it's when there is a certain point where all of the information starts to sound the same. So I think that's one piece on the mental side. And the other piece on the mental side, Dave, is this inability to be uncomfortable. And I see a lot of rookie investors who have invested all the time, effort, and energy to educate themselves.

6:06And they've even maybe started talking to agents and lenders, and maybe they're even putting out offers. but when it comes time to like actually close on a deal, there's this hesitation. And the hesitation is really based in the fact that they're uncomfortable. And what people have to understand is that if you're doing something new for the first time, anything of meaning, at least, it's physically impossible to be comfortable when you do that. What that means is that it's physically impossible to be growing and to be comfortable at the same time. So we have to let go of the notion that, hey, I'm only going to make this decision of getting started when I'm comfortable because the truth is you'll never get to that point.

6:40So I think if we can marry those two things of understanding what really drives analysis paralysis, understanding what really makes people stop, and you can put those two things together, that mindset will get you through and actually help you get into that first deal.

6:52Tony Robinson:I love that point about being uncomfortable. I'm gonna curse right now, but my wife calls them first times. She's just like, every time you do something for the first time, it sucks, but you just gotta grin and bear it. You just have to know that it's gonna be worth it. Like if you are clear about your goals and that you want to be in real estate, that you want to pursue financial freedom, there is no painless, there is no discomfort-free path to that for anyone. And so that's just, it's a question of what you want more. Do you want comfort or do you want the long-term results? I think that's a perfect way of putting it.

7:27Have you met any person who has retired off of their first deal?

7:32Tony Robinson:No, of course not. As far as I know, it has never happened, right? Yeah, no. And I think if we frame the first deal in the right way, it takes off some of that pressure. So many people want that first deal to be a home run. And I think when we put that pressure in the first deal, it makes the first deal less likely to happen. But if we frame the first deal as a learning opportunity, if we frame the first deal as the foundation to help us get the second deal, to get the fifth deal, to get the tenth deal, it becomes a lot easier to say, okay, I'm probably going to make some mistakes. It's probably not going to go according to plan.

8:02But that's okay because I'm just really here to learn. And when we frame it that way, it makes it so much easier to get started.

8:07Tony Robinson:I've been saying this recently to people in a different context that the problem with real estate investing right now is not the market. It's a matter of expectations. And I think that goes along with what you were just saying, that people are expecting the returns of a super experienced investor in ideal market conditions, neither of which you have. And that's OK. Like, that's fine. You are a rookie investor in a more balanced kind of market. And so trying to hit a single or a double is plenty. It's really good. I guess I would just liken it to every other job. Like imagine if you were a rookie entry level and you just walked into a corporation or a job and you're like, I want to be the president of this company or like, I want to see your role.

8:53Tony Robinson:Like you have to start at the bottom a little bit and work your way up. And sometimes your first deal can turn into a home run. I think it's just like the expectation of that you're going to walk in and be amazing at this and do this perfectly does hold more people back. It hurts more than it helps having that unrealistic expectation. But I do want to turn our conversation here a little bit to tactics and like what people should be doing to actually go achieve their first deal. But we got to take a quick break. We'll be right back. All right. Let's talk about something we have all dealt with. funding that takes forever.

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13:06Tony Robinson:Welcome back to the BiggerPockets podcast. I'm here with Tony Robinson talking about trends that we're seeing with rookies. Before the break, we talked a little bit just about the mindset that can help newer investors get into the market right now. But Tony, I want to talk to you a little bit more about some of the tactics that you see working because the market has shifted. And although I think we agree that it's still a good time to get into your first deal, maybe the things that you look for, the kind of deals that you're doing, your underwriting changes. So what are you seeing on that front?

13:38Yeah, I think there's a few strategies that have become slightly more popular over the last couple of years. Now, that doesn't speak to the effectiveness of the other strategies. It's just that maybe some are a little bit easier for a newer investor to get into. So I think one of the ones that we're seeing really have a bit of a moment right now is house hacking. And obviously house hacking has been around for a very long time. But I think even more people are looking to explore the opportunities of house hacking because it is a lower cost way to get into an investment property while also simultaneously reducing your living expenses.

14:12So we're seeing a lot more people get into house hacking. But I think maybe the caveat there, Dave, is that when people think house hacking, they maybe think, I'm going to buy a duplex and have someone live next to me. That's one way to do it. But we're seeing people do it in a lot of different ways as well, where we have some folks that are buying single-family homes and having an ADU in the back. And that's a way to still feel like you've got your own space. But now you've got this income-producing asset on the back end. So house hacking can take in a lot of different shapes and forms. But I think that is one strategy that's really encouraging people to get into real estate investing.

14:46Tony Robinson:I totally agree. I think for what, 80 % of investors, if you ask me what the best way to get into real estate investing in, I would say house hacking. The only caveat is if you live in super expensive markets, like sometimes doesn't actually lower those living expenses. But I've been super encouraged by this because I primarily invest in small multifamily properties, the ones that you're talking about, buying a duplex, living in one side, renting out the other. And the prices of those are getting better. I have to say that those deals are more of them are coming on the market and they're less competitive than they have in years.

15:19Tony Robinson:I feel like for, I don't know, I had a really hard time buying them from about 2021 to 2024. And now I'm seeing those deals come on the market every day. So I've just been encouraged, not just because it makes so much sense from a strategic standpoint, but I think that's one where the market is actually with us a little bit and could provide some tailwinds for anyone who's interested in that strategy. What other things are you seeing work right now? I think another strategy that's really kind of caught fire as of latest co-living, and think of this as basically rentals by the room, right? Room rentals.

15:53So instead of going out and buying a three-bedroom home and renting it out to one family, you would go out and buy that same three-bedroom home, but you would rent out each room individually. And there's layers within this. I know some people who do this to the extreme where they're taking a three-bedroom home and they're turning it into a six-bedroom home because they're getting rid of the living room and the dining area. And they're just like cramming the space with living spaces. I know people who are doing it as maybe like a combination of room rentals and short-term where they're actually furnishing every single room.

16:24But the idea of basically taking a traditional single-family structure and having multiple tenants inside of it is the basic concept. and you're really, really able to, in many cases, significantly increase the overall revenue of that property. Sometimes, you know, two, three, four X is what we've seen from some of the folks we've interviewed with very little additional overhead. Now, obviously, you know, from a management perspective, you've got to be able to keep some personalities in check and make sure that people can live together cohesively. And, you know, there are strategies for that, but I think there's a lot of upside in generating more profits with it.

16:54Tony Robinson:In any market, there's always some strategy or tactic that's sort of new. And if you get into it relatively early, you can have sort of outsized returns. I'm sure you see the same pattern in short-term rentals that happened a couple of years. There's like an inefficient market. No one was doing it. If you got in early, were a little uncomfortable and took a risk, you could do that. And I feel like we're in that moment with co-living right now because I'm not happy about this, but rent is very unaffordable right now. And so there is demand for this kind of living. And if you can provide that type of living experience, hopefully a good one, that you could definitely make some money out of that.

17:35Tony Robinson:Do you know many people who are doing this? Man, we've interviewed Miller McSwain, the Nausims based out of the Pacific Northwest. They're also doing this. There's a few other folks that we've interviewed that are doing it. But all across the country, you know, we've interviewed people in different parts of the country, and it seems to be working just nationally. Is it a significant operational property management burden, do you think? That was my concern as well, right? And when we interviewed Miller, we did a really deep dive into that specific question. And his answer was not really. And the reason why was because A, he did a really good job of setting up expectations for folks as they came in.

18:10So the lease was very clear about how they're going to interact with one another and who was responsible for what? And then he did things like offered a cleaning service as part of their rent. So no one has to argue about who's going to clean this and do that and do that. That's a good idea. He would host events basically for all of the tenants where he'd like buy pizza and hey, it's pizza night. You guys can all go hang out in there. So doing things that he could to try and build some of that camaraderie amongst the tenants. But he said for the most part, it's been a pretty smooth process, right?

18:40I mean, every type of management is going to have its headaches, but there wasn't a significant uptick in issues or management burden with co-living compared to a traditional long-term rental.

18:50Tony Robinson:Okay, cool. Well, I like these two strategies. I want to hear what else you got for us, but we got to take one more quick break. We'll be right back.

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