2025 Investing Update: Rates, Recession Risks, and Rookie Advantages

28:17but they're still building. And my wife and I were just like went through the, went by the new ones that they're building to check them out. And it's crazy what they're giving away. They're, they're like, Hey, we're going to upgrade your kitchen for you. We're going to, you know, buy down your rate. You know, we're going to give you a$750 Visa gift card, but they're given all kinds of crazy concessions. So it might not sound like a strategy to use, but even go look at some new construction and you might be able to find some really good deals just based on all the incentives that builders are giving buyers right now.

28:48That$750 Visa gift card, you could buy a coffee table. But I think along those lines of how to get creative and look for those incentives and how to ask the sellers for different things, it leaves more room for you to have liquidity. because if you're having to put less money into the deal, this gives you an option to hold your reserves. So building reserves, this will really help you whether any bumps that actually do happen in the economy, what is to come down the road. So if you use any of these incentives or you get a seller credit, like you should plan on taking that money that you have now back in your pocket and using that for your reserves.

29:34So if you planned on putting 5 % down, but now you've got that seller credit where you're only putting 3 % down. Take that money and have it in reserves because if the economy does get, we do go into a recession, we do property prices decrease, not only do you want to be able to weather vacancies, maybe longer turnovers, your short-term rental is not being rented out and you're having to cover these expenses, but also too you want to be in a position to buy so during COVID a March of 2020 like I feel like that is kind of like the peak of when it shut down March and April as in like my kids got taken out of school you're not supposed to go anywhere during that time I bought a foreclosure the house was listed at like 90 ,000 as soon as everything shut down everyone panicked didn't know what was going to happen.

30:33I still did. I'm not saying that I was super confident and everything's going to be okay. But I got that property that was listed at$90 ,000 for$27 ,000. So that's just, you want to have the reserves to protect yourself so you can weather the storms, but also so that you are ready to jump onto an opportunity because, again, you can't time the market and you can't know perfectly. But if things happen again, something happens or whatever, we have a recession and the economy does tank and real estate tanks and you have these cheap properties, you want to be able to jump on those deals. And then once you do jump on them, it could take some time for real estate to come back up.

31:25So you have to be able to hold those properties or do whatever with them until they do have some appreciation in growth. But I mean, if you just look over the history throughout the US, no matter which market, most often if you've held a property for 30 years, it has appreciated. You know, you hear your grandparents talk about how they built their house for$27 ,000 back in whatever time. So I think the liquidity is important to have the reserves to weather any storms and also to be ready to be aggressive to jump on any deals if the market does take a turn for the worse. Just on the topic of liquidity and building your funds, I was doing a little bit of research while you were talking, Ash, because I know Apple, I think Berkshire Hathaway is the same way, but Apple is known for keeping just like a ton of cash on hand.

32:23And, you know, fact check these numbers, right? But they're probably directionally correct. Apple's got, as of June 28th, so the last quarter, they had over$36 billion with a B in cash and cash equivalents. $36 billion just sitting there, right? I wonder what they're getting as an interest rate for like a high yield interest rate. Right? Imagine. and they're earning billions of dollars, hundreds of millions at least, right? But why do they do that, right? I think part of it is flexibility and what we talked about. You know, if Apple wants to go out and buy, you know, like some new company, they've got billions of dollars just sitting in a war chest so they can go and do that.

33:06In the same way that if we as investors, Ashley comes across a great deal at a great discount, she can go deploy that capital to go get it. Part of it is like managing. My kids have been really into collecting sports memorabilia and it is getting very expensive. So that is my little stash there. I'm going to start selling those babies off when it's time to buy a property. And just a side note, I don't know if I've been seeing this like across social media recently where it's comparing the return of like the S &P against Pokemon cards and Pokemon cards have like far outperformed the S &P. So it's like you never know.

33:42You never know. When I was in fifth grade, we're getting really sidetracked here today, but when I was in fifth grade, my brother loved Pokemon. And there was a boy in my class that had a big Pokemon collection. And he told me if I kissed him, he would give me his Pokemon collection. And I said no. So my brother never got it. You don't know, actually, but you just said no. It's like a multi-million dollar Pokemon. You don't even have to invest in real estate. I can just give him that little boy a Pokemon. But hey, hindsight is 20-20. But that's one of the reasons that Apple stockpiles so much cash so that they can have flexibility.

34:21Part of it is just like managing debt. Even these big companies, they take on debt for different strategic reasons. And think about when interest rates went from near zero to whatever they are now, that debt immediately got a lot more expensive. So whereas maybe strategically it made sense to have this debt when it was super low interest, it doesn't make a ton of sense once it gets high. And again, if you've got a lot of cash, you can just start paying down that debt more aggressively. Same thing for us as real estate investors. If we are buying properties at 2.65%, debt makes a lot of sense. If we're buying it at 8%, maybe it's a little bit harder.

34:57Maybe now we want to start putting down 30 % on these deals instead of 15 % or 20%. So I can go on and on, but just know that not only are we saying that it works here in the real estate sense, but just in a general business sense, building your cash reserves is typically better for business. Now, besides just like the analytics, the numbers of it is you have to have some kind of mindset shift. You have to be able to block out all the noise. So first, the headlines as the major headlines that maybe affect a different market than yours. Like Tony talked about, you should be hyper-focused on your local market.

35:37So if you're seeing, look for unemployment, what is actually the unemployment in your market, your area may not be as detrimental as what it's forecasting across the nation. So really understanding that and blocking out the noise, but not only with the news, the media, but social media. as far as looking at what other people are doing and realizing that it's your own journey. It's your own market. It's your own life. That just because somebody else is doing this and getting that doesn't mean that that is the right thing for you to do. You have to analyze your own market, analyze your own numbers, make sure whatever strategy or shiny object they're talking about would actually work in your market where you want to do this and don't get caught up.

36:38And I've talked about this before where I went through this year long period of like figuring out what's next. And I just felt like this pressure that like I had to do more. Everybody was doing syndications that I knew. And I hadn't done a syndication yet. I wasn't even close to doing a syndication. And I started, I got a property under contract and I was just like, okay, I got it under contract. The next step is the syndication. I started learning more about syndications, all this stuff. And I was like, you know what? This actually isn't for me. And luckily enough, there was like major problems with the property.

37:12So I ended up backing out of the deal for that reason. And I didn't even have to do anything more of the syndication, but it really made me realize that that's not actually something that matches the lifestyle I want or the type of thing that I want to do. I don't want to deal with other investors asking me what's going on with their money or what's going on with the deal. Just like I don't want to be a property manager to anyone else ever again, except for my own properties, because I don't want to deal with owners, deal with landlords. I see how I am. I don't want someone else to be like that to be.

37:49So I ignore the noise and really just focus on what's best for you. And that goes back to the basics. What's your why? What kind of life do you want? What actually fits around that? And I think the next piece of that too, Ashley, well, let me just comment on that first because I couldn't agree more. I think it's so easy right now in the age we live in to get enamored with so many different ideas and what's going on. But I think being able to focus on, hey, what's best for me, what actually works best for me will allow you to really maximize the things that are going on in the economy right now.

38:23I think the other piece, too, about the mindset shift is that, you know, Warren Buffett has that quote, right? Be fearful when others are greedy. Be greedy when others are fearful. And I think we're entering into this phase where there are a lot of people who are fearful about getting started. But sometimes, and historically, some of the biggest fortunes are made when people are fearful, right? The biggest fortunes are made during a downturn. Think about all the people who made tremendous amounts of wealth after the 2008 crash. Think about all the people who made tremendous amounts of wealth investing through COVID, right?

38:57It's like all these little things that have happened created tremendous amounts of wealth. And we're still in that golden opportunity. So I think just shifting your perspective from, man, this is a scary time to, yeah, it's scary, but it could also be the best time is the way that we kind of get around that. And I'll finish this point out with just a personal story. The very first short-term rental that we bought, we bought that during the summer of 2020. This was like the thick of COVID. Obviously, we had just gotten past March and April where everything was super crazy. But people kind of looked at us like, what are you doing buying a short-term rental when people are staying home?

39:34but it turned out to be the best investment that we ever made. Like still to this day, that is by far the best deal we've ever purchased. And had we been fearful, have we not had a little bit of courage, that never would have happened. You know, that wouldn't be me. I wouldn't be Tony J. Robinson, the guy who's built the short-term portfolio. So yeah, sometimes we've got to take a little bit of risks, measured risks, but risks all the same. So guys, we've covered the numbers and the strategies, but sometimes the biggest hurdle is how you think about the market. Now, before we wrap up with action steps, we're going to take one final break to hear a word from today's show sponsors.

40:07Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of the smartest ways to protect and even improve your property's cash flow. As the months get colder, frozen pipes, icy walkways, and seasonal wear and tear can increase the likelihood of claims. And traditional insurance companies aren't always built to handle these claims quickly or smoothly. That's why more real estate investors are turning to Steadily. They focus exclusively on landlords, whether it's a single-family rental, a BRRRR builder's risk policy, or midterm holiday guests.

40:42You get fast quotes, flexible coverage, and protection for property damage, liability, and even loss of rental income. Now is the perfect time to review your rates and coverage. Get a quote in minutes at biggerpockets.com slash landlord insurance. Steadily, landlord insurance designed for the modern investor. Thinking about wholesaling or flipping your first property, but not sure where to start? The truth is, deals don't just fall into your lap anymore. You need to go out and create opportunities. That's where PropStream comes in. With PropStream, you get instant access to over 160 million properties nationwide.

41:14Use 20 pre-built lead lists such as pre-foreclosures, tax delinquencies, and vacant homes to find motivated sellers fast. And now, PropStream has integrated batch leads and batch dialer to provide you with a complete all-in-one solution. That means you can not only find motivated sellers, but you can also reach out right away. Skip trace phone numbers free on select plans, then send postcards, emails, or call sellers directly. Don't worry if you're new. PropStream also gives you AI-powered insights and comps that are over 99 % accurate, so you know you're making smart offers. Plus, you'll have access to PropStream Academy to guide you step-by-step.

41:48Start your 7-day free trial and get 50 free leads at propstream.com. slash BP. That's P-R-O-P-S-T-R-E-A-M dot com slash BP. Don't just dream about real estate. Make it happen with PropStream. There are two kinds of real estate investors, those who have reviewed their insurance and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehabs, short-term rentals, or LLC-held properties. These gaps surface only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate investors, understanding portfolios, risk at scale, and cash flow protection.

42:23One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing at nreg.com slash bppod. That's n-r-e-i-g dot com slash bppod. Passive income sounds amazing until it involves 17 apps and active maintenance. That's where the Gemini credit card comes in. It earns you Bitcoin back on everyday purchases automatically. You use it like a normal credit card for lunch or gas or groceries. And every time you swipe, you earn up to 4 % back instantly in Bitcoin or one of over 50 other cryptos sent straight to your Gemini account.

43:01No points to track, no categories to activate, no waiting to redeem rewards. It just shows up and there's no annual fee, which is great because paying money to earn rewards has really never made much sense. So if you've been curious about building your Bitcoin stack without constantly thinking about it, this is one of the simplest ways to start. Go to Gemini.com slash card to learn more. Terms apply. See the link in the description for more information regarding rates and fees. Issued by WebBank. Some exclusions to instant rewards apply. This is not investment advice in trading crypto involves risk.

43:30Check Gemini's website for more details on rates and fees. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast, easy? Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job notice on other job sites. Indeed's sponsored job posts help you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking. And it works. Sponsored jobs on Indeed get 45 % more applications than non-sponsored posts. The best part, no monthly subscriptions or long-term contracts.

44:05You only pay for results. And speaking of results, in the minute I've been talking to you, 23 people just got hired through Indeed Worldwide. There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of the show will get a$75 sponsored job credit to get your jobs more visibility at Indeed.com slash rookie. Just go to Indeed.com slash rookie right now and support our show by saying you heard about Indeed on this podcast. That's Indeed.com slash rookie. Terms and conditions apply. Hiring indeed is all you need. All right, guys, welcome back. Now, before we wrap, we want to talk about really the action steps that you, the rookie, should be focusing on as you try and implement what we've talked about here in today's episode.

44:51And the first thing that you should do is to define your buy box. And when we talk about buy box, it's essentially what type of property should you be looking at? So obviously that's knowing your market, but more importantly, it's the type of property you want to go after. Are you looking for single family homes, small multifamily, large multifamily, manufactured homes, mobile homes, dirt lots? You know, like there's so many different ways that you can go about, but know what your buy box is. Do you want big? Do you want small? Do you want expensive? Do you want affordable? Identify what makes the most sense for you so that you can move fast when something does hit.

45:33when I got my very first deal, I could tell you within five minutes, even five seconds, whether or not a deal was a good deal in the zip codes that I was looking at, because I'd analyzed so many different deals in that specific zip code at a very tight buy box. I was looking for a three bedroom, two baths, single story home, built 1950s or later, and a specific zip code. And I'd analyzed virtually every single deal that fit that buy box. So I got really, really good at quickly identifying what a good deal is and what a good deal isn't. So when the right deal did pop, I was one of the first people to submit an offer because like, okay, this is the one.

46:09Let's go get after this one. And you guys, we have a checklist template for you guys to go along with this. If you go to biggerpockets.com slash resources, make sure it's plural because they're also be taken to like the guides, but biggerpockets.com slash resources. And you go to the beginner, rookie, real estate investments, whatever the first option is. And you go into there and you'll find our buy box checklist. So it will walk you through everything you should think of if you want a property that has that or not, or like a bedroom count. What's the ideal bedroom count? Is it two to three? Is it five to six for house hacking, rent by the room?

46:55So It just helps you think through how to actually build your buy box and what you should include in it. The next thing that you can also use on biggerpockets.com is the calculators, the calculator reports. I still have calculator reports saved from when I first discovered BiggerPockets in 2017. You can save them all in there if you're a pro member, but you need to practice. Think about great athletes. What do they do? They practice. Think about anyone who's in a competition. They practice. Think about even, you know, professionals. They practice in a sense that they're going to get their CE credits.

47:35They're doing continuous training. They're learning their, you know, doctors. They're continuously doing something to keep that memory, that, you know, physical memory of doing it. What's that? What am I thinking of, Tony? Muscle memory. Muscle memory, yes, when doing a surgery. So run the numbers as much as you can. Take a property off the MLS, even if you just look at it knowing this would never, ever in a million years make a good rental, practice running the numbers. Where are you getting the insurance quote from? Where are you finding the property taxes? How are you estimating the rehab? and just keep doing that, doing that, doing that, and really figuring out how to niche down.

48:23If you're in some kind of meetup or even a Facebook group with investors in your area, plug in these numbers for this property in this calculator report, or the BiggerPockets forums, you can do this. Add the calculator report and say, hey, this is for a property in Oklahoma City. I would love anyone's feedback that invests there to take a look at it. you will get, especially in the bigger package forums, you will get so many responses. I would assume it would probably be even more if you're like in a super local Facebook group where everybody is investing in that market to give you feedback as in, you know what?

48:59I actually don't think that would be the insurance. I have a property down the road. It's a duplex. It's similar. My insurance on that is X amount a year. So getting that feedback can be super helpful and can help you really tighten up your numbers and just get more and more comfortable. But I think just like exercising that muscle memory. The next important piece is building out your team. And luckily, BP has made it incredibly easy to at least start this process. There's the agent finder. There's the lender finder. You'll find plenty of insurance agencies within the bigger pockets ecosystem.

49:37And those are really the kind of the foundational people that you need as you start thinking about getting your first deal. Your agents or the multiple agents are going to expose you to different potential markets. They'll also be like your expert in that market. I talked to an agent once who is in Florida and I've shared this earlier before, but it's just such a crazy thing. But she told me, she was like, Hey, you know, if you want to buy in my city, don't buy in this HOA. And she like named the HOA, but she said, don't buy this HOA because I just found out that the owners have all banded together and they're about to sue the HOA and the builder.

50:11You're not going to see that like on the Zillow listing, you know, it's like, like, Hey, come buy my home, but I'm an open litigation. But because she there, because she's in that city, she had that insight. And then she told me, um, she said, do, do not buy any homes in my town that were built in the nineties, any other decade, you're fine. She's like, but I've been buying and selling homes here, you know, for a long time. And for whatever reason, the ones built in the 90s are always the most expensive when it comes to flood insurance. Again, you couldn't get that information without seeing dozens and dozens or hundreds of transactions to pick up on that nuance.

50:46So finding the right agent, I think, is oftentimes a great starting point because they have that insider knowledge and they can connect you to the other folks you need in that market as well. And they can help you build out your buy box too, because obviously you probably added to your buy box, not a home in the 90s that you're looking at. So the last piece I'll kind of add here is just to stay educated. Keep sharpening your knowledge, absorbing podcasts, reading books, talking with other investors. By the time this airs, you guys will have missed a BP con, but it should be announced where the next BP con is by now.

51:25So you start planning to get there, to meet people, to network with them, to learn some things, and just constantly, constantly absorb as much as you can. On Instagram, just follow people who are doing real estate investing, that are educating on real estate investing. And the very last thing is take action. So you can only get stuck in analysis paralysis for so long. And at some point you have to take action, even if you're not 100 % sure this is the home run deal. This is it. You have to at some point take that leap and buy that first property. And Tony and I are here for you. We are here to help you along the way of your real estate journey.

52:14And we appreciate every single one of you that tunes in every single week to listen to us, to listen to the rookies that take the time out of their busy days to come on here and share their own experiences and to tell you all the lessons that they learned. And then even the experts that we have come on most recently too, we've been trying to add some more in here and there to really help you guys on very specific things that are far beyond what me and Tony are experienced on to really give you that insight, that knowledge. And then lastly, the people that actually ask the questions publicly, like in the BP forums, in the Real Estate Rookie Facebook group, so we can take those questions and answer them for you guys on the Rookie Replies.

52:58So just a big thank you to you guys. We appreciate you guys so much. And if you are a rookie investor that is stuck in this analysis paralysis or has been worried about this weak market, find some accountability. Go into the BP forums. Go onto Instagram. Find somebody that you can work together with where you're going to hold each other accountable and you're actually going to get that first deal. And then when you get that first deal, after listening to this episode, you're going to DM Tony or I on Instagram or message us on our bigger pockets. And we're going to get you on the show and you're going to tell us your story.

53:39So, Tony, how does that sound? I can't wait to hear more success stories coming on to the show. And you guys would be surprised. So many of our guests said, I started off by listening to the podcast and hearing someone else's story. And it's so cool to be here now. So we would love for you to be that next success story. So actually, if you guys want to apply, head over to biggerpockets.com slash guest. And we'd love to hear your story to be on the show as well. I'm Ashley. He's Tony. And we'll see you guys on the next episode of Real Estate Rookie. At some point, your little real estate side hustle stops feeling little.

54:10Rent's coming in. Maybe you've got a couple properties now. And suddenly, the money part gets real. Your tax bill's going up. You're Googling LLC versus S-Corp at midnight. And you're just hoping you didn't miss something that'll cost you later. That's where Collective comes in. Collective is the first all-in-one financial solution built exclusively for solopreneurs, saving you time and money. They help you structure your business for success, whether that's forming a single-member LLC or adding an S-Corp election. Collective's AI engine, backed by expert oversight, automatically categorizes every expense so you never miss a deduction.

54:42Beyond bookkeeping, they handle quarterly tax estimates and prepare both your business and personal tax returns, so you never miss a deadline. You'll also get integrated invoicing plus seamless payroll for S-Corp owners, which can unlock thousands in self-employment tax savings. And with Collective's community and support, you can finally take the solo out of Solopreneur. Right now, Collective is giving you 50 % off your first two months when you go to collective.com slash rookie. That's 50 % off your first two months at collective.com slash rookie. Hey, rookies, if you're watching this, we want you to apply to be a guest on the Real Estate Rookie podcast.

55:15That's right. Ashley and I are looking for amazing stories just like yours to be a part of our real estate rookie podcast. Now, look, you don't need to be an expert. You don't need to have done thousands of deals. Even if you've done one deal, your story could help inspire the next listener. As a rookie investor, especially if you just got your first deal, it is all fresh in your minds. And you are the best person to tell your story, give your experience on how you got it done to help someone else get their first deal. So head over to biggerpockets.com slash guest if you want to be a part of our show.

55:46Again, that's biggerpockets.com slash guest. And we'd love to have you on.