How to Get 10%+ Off Your Next Real Estate Deal Right Now

0:00Is this the best rental property opportunity of 2027? Today, I'm sitting down with another real estate investing veteran, Zach Lemaster. Zach has been purchasing real estate since 2013 and has bought rentals every single year since then. When interest rates were high, he bought. When prices were low, he bought. And everything in between, he bought. Through pure consistency, picking the right markets, and learning from many failed management experiences, he replaced the income of his full-time job and started Rent to Retirement, one of the nation's leading turnkey real estate companies. Now, while everyone is waiting for interest rates to drop, Zach is doing the opposite, consistently unlocking 10 % plus discounts on some of the newest rental properties in the country.

0:49And that's on the low end of the discounts he's getting. Today, we're getting into why this could be one of the greatest and most heavily discounted rental investing opportunities of 2027, and how anyone can get in on these deals.

1:09Zach LeMaster, welcome back to the BiggerPockets podcast. I'm excited to have you here today, Zach, because Zach, if you guys haven't heard, Zach's been on the show, he's been on the YouTube channel many times, he's the CEO of Rental Retirement, one of the biggest trusted partners, BiggerPockets does turnkey rental properties. But we were talking before the show, we've actually never heard your story, Zach, but you are an active investor yourself. So maybe you could just fill us in a little bit about where were you in life when you got into real estate investing? Yeah, I'm excited to share. And it's been an evolution and it's still a journey, right?

1:43I view real estate investing and business as a lifelong journey. But like I think many of the audience, Dave, I started in a career path that had nothing to do with real estate. So my wife and I are both optometrists by education. I was on military scholarship, HPSP. So I was commissioned as a captain in the Air Force. They paid for part of school and then I practiced optometry in the Air Force. This is probably about 15 years ago at this point. And that's where I started investing with military in general. You get access to VA loans, which are fantastic loans because yeah, and a lot of cases you put no money down.

2:14You don't have PMI to pay. I didn't have any money to put down anyways early in my career. So that worked out. But I read all the books. I was a bigger, I was a bigger pockets member and just really liked real estate simply because it was a tangible asset. And candidly, Dave, I didn't understand any other forms of investing stock, anything else, right? So real estate made sense. So I bought my first property. I house hacked it before I knew house hacking, you know, the term, but bought a duplex with a VA loan, put no money down, lived in half, rented out the other half. Again, it's probably about 15 years ago at this point.

2:45I was stationed in North Dakota at the time. The next house I bought was another duplex locally and I continued to buy locally over the next few years and really just liked real estate. I learned how to scale my portfolio through different creative methods because, of course, like everyone, I ran out of capital to put down as down payments. We all do at some point and then just continually invested. At some point, Dave, I found that investing locally was maybe not what I wanted to continue to do and started to explore other markets where there was possibly higher returns. My wife and I started to look at other locations and invested out of state.

3:18We had a terrible experience. We lost a lot of money on the first few deals, which is, you know, that's a learning experience. But then we refined our process and our system and then really just learned how to identify markets that fit our goals the best, offer the best returns, and aggressively invested out of state. Eventually replaced our active income as optometrists, left the Air Force and started rental retirement. But that was really the foundation in the early stages is just learning how to invest out of state because that made more sense for us. You were early on that. When were you starting to invest out of state?

3:49Do you remember what year it was? I think our first out of state property was probably 2013-ish. We invested in Southside Chicago because the numbers were really good. We invested in Section 8 housing, so low-income housing. That was CHA, Chicago Housing Authority. They call them two flats there, which are basically duplexes or tri-flats where it's three levels. did some renovation on the properties. The numbers on paper looked really good, but we really had a challenge with keeping the homes leased, with ongoing maintenance, dealing with the housing authority. So it was just kind of an uphill battle of like continual expenses, death by a thousand paper cuts type of thing.

4:26Looking back on it now, what would you have done differently for your first deal out of state? Because I know there's a lot of people in the bigger pockets community who want to invest out of state. There's expensive markets, doesn't make sense. You want to look at the Midwest. like what lessons would you pass on? Yeah, there's a lot. And I wouldn't actually change anything because that's how we learned. But certainly we've we've applied the lessons both in our personal investing and and our active business with rent retirement. And that's the foundation of rent retirement is how to effectively invest out of state.

4:57And, you know, we lay the groundwork for that for our investors. But we did everything wrong in the book. You know, first of all, we didn't research the market enough to really understand, is this the right place for us? Is this the right place based on our goals. We bought property probably too early. We built a team around the property and we had all the contractor issues. I mean, investing out of state is challenging, but I always tell people it's no different than investing locally. Actually, there's no, I think, huge benefit to being able to drive by or do things yourself. I think a lot of times actually puts you at a disadvantage if you feel like you're required to do all those things because that's probably not the best utilization of your time.

5:33I think really building like the team and is the more important thing focusing on your investing versus being in the weeds with it but i think you know stepping back being more intentional on like what your goals are finding a market that fits those goals i think a lot of people do try to invest locally too much because that's what feels comfortable to them when the reality is it's like is this even the right market for you the chances are there's likely a better market suited for your goals and a market that's going to offer a better return outside of your local area but a lot of people that they're hesitant to take that first step because it's daunting.

6:06And as I just mentioned, I had a bad experience, but you've learned through that. And I think if you do open your mind to investing out of state, one, I think it's a necessity to diversify your portfolio, but also there's a lot more opportunity. I think it makes you a better investor long-term. I'm with you on that. I've done both. For the first 10 years of my investing career, I invested locally. I just happened to be in a good market. I was in Denver starting in 2010, And one of the best markets you could have been in, you know, looking back on it now, very fortunate place to be if you want to be a real estate investor.

6:35And then 10 years into it, I moved to Europe and everything is long distance to me at this point. So what's the point of only limiting myself to Denver? And when I started to do that, it really sort of like changed my whole investing philosophy. And I realized how much investing locally actually had held me back. And this isn't true of everyone. Some people can scale really well locally, but I was just doing everything myself. I didn't have property management software. I was doing that all myself. I am famously terrible at maintenance, but I still tried. I would always go f*** something up for like a couple of hours before I hired someone.

7:12And it was just a massive waste of time, right? And I did that for 10 years. And looking back on it now, if I really wanted to have the more optimal situation, I would have built the team and outsourced a lot so that I could focus on the stuff I'm good at, which is sort of like portfolio level strategy. That's the stuff I like doing. Again, that's not true from everyone. If you're super handy, if you're flipping, like that's a totally different story. But for someone like me, I'm totally with you. And I've enjoyed investing out of state because it's a skill set that I feel like I'm good at. So I'm curious, you said that people should really think about their goals when investing out of state.

7:50What type of goals and what type of investor do you think best align with the out of state approach? Let's talk big picture for a second, Dave, because a lot of people that we work with or speak to generally, I mean, they're interested in real estate because they're looking for some level of passive income to some degree eventually, right? And having some level of like residual income. Now that varies for every single person that could be ultimately retirement and financial freedom for some people. In others, it could be just supplemental income and diversification in their portfolio. But very seldom do we come across someone that's like, hey, I want to be actively managing my properties in the weeds, trading one job for another forever.

8:33Generally, I think people think about investing passively over time. And so I encourage people to start there. Keep that in mind, a big picture, and actually start your goals there. So often we see people that jump into their first flip and it goes terribly wrong and maybe they learn some lessons, but it drags out. And that's wasted time. Again, to your point, that's time that they could have been better spent building their strategy and trying to execute that. But when people are first thinking about real estate investing, do think long-term, big picture. Understand how much time involved do you want to be because real estate investing can be extremely time-involving.

9:11Think about your capital position? What is your risk position? Real estate investing, like any investing, can be extremely risky in certain assets, but there's different type of asset classes that are more passive, less risk, diversified type of investing. Think about what your skill set is. If you're trying to learn a new skill set, maybe it's best not to do that on your own, but find a mentor or partner with someone or invest with someone that has a proven track record and learn that. These are all really important things for newer investors that are, I think you're a necessity for you to think about to be successful and not have to spin your wheels and waste all the time that many of us did that have been very expensive and time-consuming mistakes that we would have been further ahead, right?

9:51Yeah. But you said something really important there, Zach, which is I think when people try and answer this question, they sort of look at it in a vacuum. They're like, you know, local is better than out of state. But it really does depend on your goals, as we talked about, but the resources that you have is such an important thing for you to sit down and audit and think through. I have this concept in one of my books, Start With Strategy, where I say like every deal, every portfolio needs three things. You need skill, you need money, and you need time, right? And so many people just focus on the money part of it, and they don't think about realistically how much time they want to put into something, or whether or not they have the skill to execute the strategy that they want to pull off.

10:41Like maybe you want to do BRRRR, but you're terrible at managing a renovation or you're not handy. Maybe you shouldn't do BRRRR. And maybe that means you pick a turnkey kind of rental, which is perfect for you. When I did this, I did this thing called like a time audit. It's just budgeting basically for your time. It's simple. I realized how much time I was spending doing property management, something I don't like, I'm not good at. and it's just like not helping me grow my business. And so where you fall in these spectrums should really help you focus where you wanna be. If you have a lot of time and you're really handy, go flip a house, like go for it.

11:16If you aren't handy and you don't have a lot of time, either need to buy something locally that's fixed up and ready to go or you need to work with a partner. Both are fine approaches, but it's just being honest with yourself about what you can bring to the table and what you can offer to your portfolio. I think it's just like maybe the most important thing when you're starting out to being successful long-term. Another common mistake we see with newer investors is that, and we're all guilty of this, but they try to do too much at once or they try out too many different strategies. And it's okay.

11:46Like, look, real estate investing, there's a lot of different ways to make money and create wealth, but you can't do all of them successfully at once. And so I really encourage people when they're first getting started, because you don't know what you don't know. And if you want to reduce your risk and increase your probability of success early on, like stick to the fundamentals of real estate. That's why we like residential. Now, I personally invest in a lot of industrial and commercial retail and things like that at this point. But we still hold majority of our portfolio in residential real estate, specifically single family and small multi.

12:18Because I think that is the most sustainable asset class, Dave. I don't know if you agree or not, but it's like people need housing. Oh, yeah. We have a shortage of housing in a lot of locations, especially affordable housing in different markets. And so that's where the opportunity lies. But it's really hard to screw up residential real estate if you're underwriting appropriately, you're buying at a good price, the property cash flows, you got a good market, a good team. And so I really encourage people, choose one strategy and just go for that and stick to the fundamentals and stop looking for the unicorn deal that's going to be a home run because those will come.

12:50but only after years of going through the base hits and the repetition. Yeah. So you really got to just choose a strategy. I think one isolated strategy, stick to the fundamentals, and then at some point understand you don't understand everything and just take action. All right, everyone, we got to take a quick break, but we're going to have more with rent to retirement CEO, Zach Lemaster, right after this. Most investors only think about insurance when something goes wrong, a tenant injury, storm damage, loss of rent. Then suddenly the cheapest policy doesn't feel like the best one anymore. That's why a lot of BiggerPockets investors use steadily for landlord insurance designed specifically for rental properties.

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14:56It's$12 a month. You're welcome. Sign up right now for$50 off your first year of RentReady with promo code BPCASH. BiggerPockets Pro members get it completely free. Sign in through your pro account at rentready.com slash biggerpockets. That's rent, R-E-D-I dot com slash biggerpockets. Welcome back to the BiggerPockets podcast. I'm here talking to the CEO of Rent to Retirement, Zach Lemaster, about his own personal investing journey and his big picture strategy for 2026. Let's jump back in. I'll say the biggest, most impactful thing for us, just my wife and I, in creating financial independence for us and real estate success in general is that I've invested in real estate every single year since I bought that first property probably 15 years ago.

15:45I'm not saying I've made money on all deals, but I've continually invested in any market cycle. And that's really relevant today because, you know, underwriting is harder today, but there's exceptional buying opportunities. So one, I've continually invested every single year because that's, again, an educational thing to continue. And we've been, you know, growing our portfolio and trading up, 1031 exchanges, all the things. The second thing we did is we were very intentional. I kind of already alluded to this, but we were very intentional on where we bought. And I think sometimes people overcomplicate it.

16:14But at the end of the day, if you buy, if you consistently, so that's the continual investing, if you consistently buy good properties in good markets with good teams, like that is a recipe to success over time. Time is your biggest partner in real estate investing. And that's why you don't look for those home run deals, because if you bought just a handful of typical homes or base hits, like those will compound over time. So consistently investing in good locations. And then the third piece, candidly, Dave, is just being a creative investor to make deals happen and make the numbers work in a market that is challenging and maximizing your tax benefits.

16:48It is so advantageous for investors to take advantage of the tax benefits, things like cost segregation studies, things like 1031 exchanges, opportunity zones. These can catapult your investing huge and take you to the next level. So I just wanted to share that. When you put it that way, like real estate really is an almost stupidly simple business. You know, like we try and congratulate ourselves on being like geniuses. But like you said, like buy a good asset in a good location and wait. That's really the business. It really isn't that complicated, not even just for the last 10 years or low interest rate or for centuries.

17:22This has been a thing that works. And so I really like the dollar cost averaging approach. Like you said, if you guys haven't heard that term, it's borrowing it from the stock market. But the idea is you buy assets in any market cycle consistently. Sometimes you'll pay a little more. Sometimes you'll get a great deal. But if you can just attach your long-term performance to the long-term performance of the housing market, you're going to be good. Same idea with the stock market, right? Like the stock market has historically just gone up for generations. Same thing with the housing market. So you don't need to be smarter than the housing market.

17:58You just kind of have to hitch your wagon to something that is already doing well. The trick is to just get in there and hitch your wagon. Zach, though, you mentioned it's hard to underwrite, which is true. So what is your big picture strategy or what you're going out and looking for, what you're trying to acquire? Yeah. I think a lot of people have pulled back, Dave, because of possibly limited inventory, market uncertainty, still interest rates that I think we should now just call normal interest rates. But I think times like this actually make you a better investor because you have to truly go out and hunt for deals and find creative ways to make deals happen.

18:40Investing when there was historically low interest rates that we're never going to see again, that was easy. You could buy pretty much anything and it would cash flow decently and things appreciated. But right now, this is the time when you have to be a true real estate investor. That means underwriting a lot of deals, making a ton of offers, exploring markets outside of your local market. One of your previous questions I didn't answer is like, who's the right person for out-of-state investing? Candidly, I think it'd be everybody at some point and should be because you need to diversify. And I think it's worth exploring.

19:10But really the people that like, if your local market's too expensive and you're beating your head against the wall and haven't taken action because it's too expensive, it's too regulated, it's too taxed, whatever the case is, look at other markets. If you're a busy professional and like, you don't want to manage the property anyways, there's no advantage for you to invest locally, then maybe you should start looking elsewhere and find a place that attaches your goals, right? But today's market, you have to be creative to underwrite deals. Unless you want to put 30%, 40%, 50 % down to make things cash flow, you can still get very good deals.

19:40Where we see the best opportunity, and this is just our own experience internally, is working with new construction. We do a lot of build to rent, turnkey homes. And what we know, working with some of the largest national builders and local builders, is that they are highly incentivized to get stuff off their books, especially this time of year before some of their fiscal years end in October, some in the calendar year. To give a practical example, we're seeing upwards of 20 % in some cases, 15 to 20 % that the builder is reducing home prices by. They're offering incentives as cash back to people and incentives to buy rates down.

20:16That is exceptional. You could actually, in theory, still get a 3 % or 4 % interest rate. You're going to pay a ton of points. That doesn't mean you're necessarily going to pay it. The builder will pay it for you. But the point is that you just have to search harder for deals and find creative ways to make them make sense. And that, I think, is where you really hone your skills as an investor, whether it's creative financing, better deal negotiation, because you have the ability. This is a buyer's market. You can negotiate and you should. You just have to work a little bit harder, Dave. But this is where the best deals are actually bought before we get back into the seller's market and you ride that appreciation wave when everyone else is jumping in and there's competition, right?

20:54I really love that Warren Buffett quote, be greedy when others are fearful and fearful when others are greedy. And listen, it's not the same as it was in 2010. But in some ways, it reminds me of that time because everyone who's starting now is like, oh, it must have been so easy in 2010. No one was buying real estate in 2010. That's why in retrospect, it was easy if you were buying because no one else was doing it. Everyone else was afraid to do it. And again, prices were way cheaper then. It was a different kind of environment. But I do think it's the same kind of thing. Like the people who figure out how to make it work are going to get the full benefit of the upswing.

21:35Like if you're trying to design the best time to buy real estate, it's before things recovered. And I just notice it in the markets where I invest. Inventory is getting so much better. Like good assets are coming for sale. And to Zach's point, it's really just a measure of creativity. Maybe we can dive into some of the creative ways that you're making deals work. You mentioned seller finance or creative finance. You mentioned rate buy downs, new construction. What are maybe some areas of the country and some of the tactics you've used successfully? And if you have any examples of deals, that would be awesome.

22:10Where we see the best opportunity right now, Dave, is still a sunbelt. I think that's been a trend that's been continuing. We do a little bit in the Midwest where I have more affordable housing. That's more of a cash flow play. So again, we have a diversified portfolio, but about 80 % of what we do is Southeast new construction homes in growth markets. These are areas in Alabama, Georgia, North, and sometimes South Carolina, Florida, Texas. This is one of the biggest lessons I've learned over time, Dave, is that we bought so many houses and we did the renovations and we're just older homes. And while we got good price points on them.

22:45They were older homes and they came with a lot of maintenance issues. And at some point, even if we're getting great deals on them, I'm like, I just don't want to deal with the noise. Even if we have property management, I just want consistency and I want things to be easy. You get that over time. You're hungry when you're just starting out and you're trying to make every deal work and be scrappy. Over time, you want simplicity and consistency. And so I just, you know, that's the thing is we started to focus on new construction because you have builder warranties on everything. Everything's new, attracts better quality tenants.