Late Start to Real Estate? Investing in Your 50s/60s (Rookie Reply)

Ashley:
What if you had $100,000 in cash, a successful career, and a five year runway, but we’re just getting started at 61 years old?

Tony:
Or what if your first flip was nearly a $1 million property and you’re trying to get it funded as a first timer,

Ashley:
Or maybe you’re a high income young couple sitting on $70,000 and a 3% mortgage, wondering if you should cash out, move out, or even go out of state.

Tony:
Today we’re answering three real high state questions from our BiggerPockets community and every one of them touches on challenges we know many of you are facing today.

Ashley:
This is the Real Estate Rookie podcast. I’m Ashley Kehr

Tony:
And I am Tony j Robinson. And with that, let’s get into our first question for today. So our first question here comes from Theresa, and this question says, first I’m on the forum. I’m 61 years old, my husband is as well, and we’re just starting out in real estate investing. Truth be told, if I knew earlier what I know now learning, I could have started so much earlier, but all I can do now is move forward. I currently own a successful business with no plans to exit for at least the next five years. My husband is a project manager with a local construction company. With that said, what is the best strategy for building wealth and creating cashflow with real estate in today’s market? Is it buy and hold? Is it fix and flip? Is it burr? Is it wholesaling? We’re not really interested in house hacking.

Tony:
We have a good amount of equity in our current home and we’ve saved a good nest egg and standard investments that we can tap into and we have a hundred thousand dollars plus in cash. Is it too late to really build wealth in a timely fashion so we can enjoy our golden years? Eventually she goes on to ask, what is the best type of loan to acquire funds to start? Is it a heloc, a hard money loan? Private money loan, no money down sub two, we’ve reached out to an investor realtor who has referred to us and who so far has been a wealth of knowledge. We’ll be talking loan and money strategies today as well, but would love to hear from all of you. Everyone’s input is greatly appreciated. So a lot to unpack here. Well first I guess let’s just ask what a great position they’re in.

Ashley:
And I think too, something that caught my eye was if only I knew then what I know now, I think everybody is thinking, okay, I want to start off with talking about their current equity in their home. So if they have a mortgage, what is your interest rate on it? What are the terms? Is this a great mortgage you don’t want to get rid of? Then a home equity line of credit would be a great opportunity to tap into that. They also mentioned that they do have $100,000 plus in cash. So one option that they could do with this cash instead of having it sit is actually invest it into the stock market, put it into a brokerage, and then get a line of credit on their brokerage account. So they have this money invested, it’s still pretty liquid for them to pull that money out of it instead of putting it into a property.

Ashley:
And then they have this line of credit now that they can go ahead and use that line of credit to deploy, to actually purchase a property or invest in real estate. And somehow, so you’re actually getting to invest in two different asset classes with this 100 K, the stock market, and then investing in real estate with using the line of credit. With this line of credit, you’re going to get great terms, you’re going to get a better interest rate because your stock account is so much more liquid and easier for them to just take your money if you don’t make your payments on your heloc, where if the collateral is property, they have to go through a whole foreclosure process, which makes it not as liquid, so you’re going to get better terms because their risk is less. So that would be a great starting point I think to look into is taking that $100,000 in cash putting into the stock market and then getting that line of credit with your stock market account as your collateral.

Tony:
And I love that idea and I’ve used the stocks to get loans in the past as well and it works pretty well, but I think just the main thing that we’re focused on is, is it too late? And yes, 61 is later in life, but I don’t think it’s too late to get started and I just want to make that point very loudly. For everyone that’s listening, 61 is not too late to get started. I don’t think it’s ever too late to get started, right? If you’re here and you’re listening and you’re seeing this, yeah, then you’ve got time to get started.

Ashley:
If you look at the history of billionaires or even multimillionaires, a lot of them don’t make it to that until they’re in their sixties that I wish I knew the stat off the top of my head, but usually most people don’t really accomplish something great until then. If you look at a lot of high net worth individuals, they’ll say, yeah, they worked this and worked this and then they had their big break at age 60, so definitely not too late.

Tony:
Now, in terms of what actual strategy I think works best in today’s market, I mean all of these have a way to work in today’s market, buy and hold fix and flipper wholesaling like we know investors who are doing all of these strategies today, it’s much success. So I don’t know if it’s necessarily the strategy or what’s working today that you should focus on. I think the bigger question is what’s going to allow you to achieve your goal and the timeline that you’ve got in mind and buy and hold I think is obviously a great way to build wealth over the long run, but it does take time, right? If you were 25 and asking this question then sure, buying one single family home every five to seven years, that’s going to add up over the course of three or four decades. But if you’re looking to really accelerate the amount of cash you have coming in, I might opt for a different strategy and in my mind I would probably do one of two things.

Tony:
I would focus on flipping or I would focus on the burr strategy. The only reason why I’m not saying wholesaling is because I think that’s a very specific skillset and if you’ve got that skillset, great, but I’m leaning more so towards the flipping because your husband works in construction already, right? So I’m making an assumption here, but I would focus on fix and flip or bur. And the reason why is because you could take that $100,000 and you can recycle it with either of those strategies. If you go traditional buy and hold, maybe you get one or two properties out of that 100 grand and then what are you going to do next, right? You’re going to have to liquidate funds or go get something from someone else. But if you’ve got a hundred grand, which is a really great starting spot, you can use that money over and over again through flipping or through burr, through flipping.

Tony:
You take your a hundred grand, you put that as a down payment, your portion of a hard money loan or a private money loan if you know someone. And then once that deal is done, you get your money back and you go recycle into the next deal. Same thing for bur, you could go into many markets today, even still with a hundred grand and buy something cash and you renovate it and then you recycle the funds that way. And I think if speed and moving quickly and scaling quickly and stacking up some wins is the goal, I would focus on one of those two strategies.

Ashley:
Tony, I am going to disagree with you. We are about to get into our first argument

Tony:
Live on air.

Ashley:
I would have to say that I am not going to recommend flipping. I am very risk adverse in looking at today’s current market conditions where it’s becoming a buyer’s market instead of a seller’s market. It makes me want to find deals and buy deals, but hold onto them until it is a seller’s market again. And by the time this podcast episode airs in three weeks, we could see another shift, and I am completely wrong, but from what I am seeing right now is that there are like 500,000 more sellers and buyers, okay? So there is this huge shift going on in most markets and I would be less likely to flip a property, especially if this is your first time ever doing it, where a couple of years ago, if you were to flip a house, it would sell no matter what because everybody just wanted to buy a house and inventory just flew off.

Ashley:
Where now you would have to be way more strategic because you are going to be competing against so many other sellers in the market and just not as many buyers. So I would take flipping off the table, what I would do instead is I would not use all of your money. So say you decide you’re just going to use your cash, you’re not going to go with the line of credit option. I would use some of it and I would use it as a down payment on a rental property, but I would not buy for cashflow. I would buy for appreciation because it looks like in your circumstance you’re doing well, you don’t need the cashflow, you’re not planning to quit your job, quit your business. So I would buy a property where you are looking at the market analyzing it to bank on appreciation, and in five years maybe when you sell your business, that property has appreciated.

Ashley:
You have mortgage pay down from the tenant living in there, and then you sell the property for a gain or better. Yeah, it’s you do a 10 31 exchange into a bigger property that has more opportunity for appreciation, maybe has some more cashflow, and I wouldn’t get something that’s negative cashflow per se, but I would get something that breaks even or has a little bit of cashflow. And a couple hundred dollars in cashflow isn’t going to be a huge financial difference for you, but at least your money is growing with the appreciation and then having that principal pay down so that you can cash back out of that property with a 10 31 exchange or even refinancing down the road to tap into that equity to purchase something else. But I would say no to flipping for your first investment right now in this strategy, especially because you can’t do have that resource, but maybe do a burr, do a rental of your husband being a contractor, but if you’re both running really busy businesses and they’re already successful, I don’t think you should create a third business for yourself by flipping a property. And I’m also very, what’s low stress, low risk. Zen Ashley is here in 2025, so I dunno, I just think about those types of things. So take into consideration your mental and emotional capabilities too, as to if you want to go ahead and grind to flip a house in what it might take into today’s market may be very different than what you’ve seen on Instagram from the last couple of years.

Tony:
I’m going to agree with you actually, Ashley, I think you make a very, very valid point that we both have properties I think that are listed as flips that have been sitting for longer than we anticipated. So there definitely is some softness in the market. You know what I think might be a really good idea is if we bring on, and maybe we do a flipper’s round table where we bring on someone like James Dard, Henry Washington, we recently had on Dominique Gunderson who flips remotely out of New Orleans, but just bring some people in from different markets and let each of them say like, Hey, how are we adapting to the current times? Because you’re right, days on market is increasing in a lot of places, but there are also markets where maybe it is not and just how are flippers kind of adapting in that environment? But it sounds like what we agree on is the B strategy. Like, hey, maybe this is the best because you, you’re you’re building the passive income while also leveraging the capital and the skillset that both you and your husband have. So maybe that is the best path forward here.

Ashley:
And I think too, knowing that they have this money sitting that they want to deploy, that it’s not like they immediately need that cash back to complete the perfect birth. So it is okay to leave money in the deal. That is money you were investing to let the property grow. So I think that’s even better if you have capital that you can let sit in the property that you don’t need to immediately recapture, you’re going to find it’s going to be easier at least to find deals that way. Okay, well if you guys want us to do that round table idea with some flippers in different markets, make sure to comment below if you’re watching on YouTube and let us know and we can get working on that for you guys. Before we continue with the show break though, I do want to talk about my first rental.

Ashley:
I thought collecting rent would be the hardest part, and I was actually wrong. The admin never stops the expenses, the receipts, tax forms, tenant issues. I didn’t expect the behind the scenes work to take up so much of my time and Headspace every night was another round of paperwork and I started thinking if it’s like this one, how do people handle five or 10 base Lane helped me get out of the weeds. It’s the official banking platform of BiggerPockets that handles the whole backend for me, expense tracking, financial reporting, rent collection, even tenant screening. It’s the first time I’ve felt in control and now that I’m not drowning in admin, I finally see how my real estate business can scale. So do yourself a favor, sign [email protected] slash BP today and get a $100 bonus. Okay, welcome back today. Our second question comes from Jacob in the BiggerPockets forums.

Ashley:
I’m not a complete newbie when it comes to flipping. My brother-in-law has been doing it for years and I’ve been involved in several of his projects. I’ve helped manage budgets, materials, timelines, pretty much every part of the process. This will be my first flip under my own name and I’m excited to make it happen. I’ve got a great deal lined up in Miami, Florida in a strong neighborhood with solid comms and demand. Here are the numbers. The purchase price is 699,000. The rehab estimate is 150,000. The A RV is between 1.1 to 1.25 million and that’s conservative. The comps are a house that’s three blocks away, sold for 1.25 million, another two blocks out, sold for 1.19 million, and then one about three blocks away, sold for 1.1 million. Mine is 2000 square feet, which is larger than all of those comps. My question is can I realistically get this funded?

Ashley:
I’m already speaking with the seller and the deal is very much in motion. Just wondering if lenders or even capital partners would consider working with a first timer when the numbers are this strong, appreciate any honest feedback or direction. Hey, this is a great question. As to your rookie investor, you’ve got this exciting deal that you feel has great potential. You run the numbers, you’ve looked at everything and you want to get this deal done, and I think you definitely have more of an advantage with your confidence, Jacob, the fact that he understands this deal has already worked through the numbers and he wants to get this deal done because he understands that yes, this deal is going to work out. I do think that yes, it can be difficult your first time, but I wouldn’t present it that way because really it’s not your first time you’ve been involved in doing these other flips.

Ashley:
That’s just like me. When I worked as a property manager, I wasn’t owning these properties, but I worked as a property manager. So when it came time for me to get my first loan on an investment property, the bank I worked with also worked for the investor that I worked for. And we already had an established relationship because I worked for this other investor and it was super easy process. It wasn’t like, oh, this is your first time. Are you sure you know what you’re doing? They had seen firsthand what I was doing with these other properties and then I knew what I was doing. So my first recommendation would be talking to your brother-in-law and who is he using to lend on his flips? And that could be a great connection, a great referral to start right there with that because they already see firsthand what your brother-in-law’s doing and if they know that you’ve been a part of making that happen and been involved in those deals, they could be way more likely to lend to you than somebody else who doesn’t know any history about you or your brother-in-law.

Tony:
Couldn’t agree with you more. Ashley, I don’t really watch a lot of nascar, so if there’s NASCAR fans out here, and I get this wrong, don’t beat me up

Ashley:
When I was younger, me and my dad, big NASCAR fans,

Tony:
Okay, so you can check me if I’m wrong here, but one of the strategies in NASCAR is to draft behind the vehicle that’s in front of you, right? So they’re shake and bake, shake and bake, there you go. Never heard that, but that’s even more

Ashley:
Catching them hell night.

Tony:
So the basic premise is that the car in front is taking all the wind, they’re the ones getting beat up and you’re behind them. And then once you slide out, you’re able to shoot in front of him because you’ve got all this upward momentum. And Jacob, it’s basically the same thing in real estate investing. You’re drafting behind this other investor who’s taken all the lumps, who’s learning all the lessons, and you’re picking some of that up so that way when you do step out on your own, you can shoot off yourself as well. And I think that’s one of the best ways to get started. Real estate investing, it’s exactly what you just did. So to Ashley’s point, I wouldn’t discount all that you’ve learned. So Jacob, in theory, you’re doing exactly what we want real estate rookies to do where you’re learning from someone else that’s already taken the lumps, learned the lessons, and now you’re stepping out on your own with that knowledge.

Tony:
So I think you are grossly, grossly underestimating the value and the knowledge and the skillset that you’ve developed working with this other person. So to answer your question, would anyone consider working with the first timer? I believe absolutely, yes, right To Ashley’s point, working with the same lender, great idea. But even if it is someone new, put together your resume of all the deals you’ve dealt with this other flipper, and that is your proof of concept, right? That’s your track record of what you’ve been able to accomplish. And Jacob, even the spread on this deal feels pretty solid. You got to a purchase price of 700 rehabs one 50, so you’re all in for eight 50 and you’ve got comp 1.1, 1.12, 1.25, right? So you’ve got some spread there as well. So the numbers feel good, your experience feels good, assuming that you can actually hit all those numbers, I don’t see why you would move forward with this deal. Alright, we’re going to take a quick break before our last question, but while we’re gone, if you haven’t yet subscribed to the Real Estate Rookie YouTube channel, be sure to hit that follow and subscribe button. If you’re listening to this on Apple podcast or your favorite podcast platform, make sure to subscribe and follow there as well. And we’ll see you guys after this short break.

Tony:
Alright guys, so welcome back. So our last question for the day comes from Garrett. Garrett says, my wife and I are a young couple and both have high paying jobs. She’s a registered nurse and an engineer. We were fortunate to graduate college with no student debt and are great at saving money a little over a year. After beginning our careers and not knowing anything about investing, we bought a three bedroom, two bathroom house for $500,000 with 20% down and a 3% interest rate resulting in a mortgage of just over $2,100. That includes taxes and insurance. Over the last couple of years, we’ve become more and more interested in real estate investing with the specific goal of becoming financially free. However, with the current house prices near us and high interest rates, buying a cashflow positive investment seems impossible where we live and they’re in Kitsap County, Washington, even our current house at a 3% interest rate with a $2,100 mortgage could only rent for about $2,800 per month.

Tony:
We currently have $70,000 in cash set aside, ready to invest and about 118,000 in equity in our home. So a few questions. Number one, after estimating vacancy maintenance and CapEx expenses, it does not make sense to rent our current house. Do you agree? Number two, should we sell our house and move to a more favorable market for cash flow? If so, where do you recommend number three, should we keep our relatively low mortgage and interest rate for our area and start investing out of state Number four, what strategy would you recommend We start with long-term single family homes, house hack with the small multifamily B or something else?

Ashley:
Okay, the first thing to look at, because they asked about it’s not worth renting out their current house, and do we agree? So their mortgage payment is $2,160 per month with taxes and insurance, and then they could rent it out for 2,800 per month. One thing that I love about single family homes is that like any other expenses you can really pass onto the tenant. So the utilities, the landscaping, the lawn care, snow removal, so things like that. And then they were correct in saying vacancy maintenance cap X doesn’t make sense to rent out our current home. So what I would do in this situation is if you are trying to decide by two of these, first of all, in the BiggerPockets resource hub, I just discovered this a couple of weeks ago that this was in there, I think it was Scott Trench who created it, but it is actually a sell versus keep spreadsheet and you enter in all of your information about your property and it helps you decide based on the numbers, if you should keep this property as a rental or you should sell it.

Ashley:
So you can find that at biggerpockets.com/resource hub or just resource I think it is. So when you go in there, you can input it and you can see the difference. So they wrote in their question, according to Zillow, our house has appreciated 50,000 over the last two years. So I would look in comparison as to what your cashflow would be compared to that 50,000 and what the difference would be in the two years because you’re getting your principal pay down, you’re getting appreciation, more appreciation in the property by keeping it longer. Also, I would look at how long, so they’ve lived in the house at least two years, so they also wouldn’t pay taxes on the sale of that property where your cashflow, you’re going to pay taxes on it. So I would go and check out this calculator at biggerpockets.com/resource and look for the sell versus keep calculator that’s in there and run the numbers to see the difference.

Tony:
Yeah, just in my gut, I have a hard time encouraging them to walk away from a 3% interest in a $2,100 mortgage if the goal, and you guys are relatively young, right? You said we’re a couple years outside of our college careers and just starting things out. So it seems like you guys have time on your side and I know that there’s a desire to get started, but you’ve got an amazing asset in that primary residence and I would want to, I think, protect that. That said, it doesn’t necessarily mean that you can’t move somewhere else. I know you said in your area buying cashflow positive investment seems impossible, but I wonder could you keep that home that you’re currently in, rent it out and yeah, even if you’re not making crazy cashflow, you’re still getting some level of cashflow, you’re still going to get the equity growth over time, you’re still going to keep that 3% interest rate.

Tony:
And can you maybe go get a small multifamily where you house hack in Kitsap County or Washington and maybe it’s a duplex where you guys live in one side and rente out the other side. Maybe it’s a duplex where you rent out the other side by the room to really supercharge your cashflow. So I just wonder if there’s maybe other strategies you could look at and then the question of moving to a more favorable market for cashflow. Yeah, I think that’s fine too, but I don’t think you need to sell your house to do that. You can still keep your house and go invest in a less expensive market with the capital that you have set aside. 70,000 bucks I think is enough in plenty of markets across the United States to get in for something, and it’s just a matter of identifying those markets and then finding the right deals within those markets.

Tony:
And then the last part of Garrett’s question here is what strategies should they start with? Again, this kind of goes back to the first question, but it does somewhat vary depending on you, your risk profile, what your skills are and all those different factors. But I think based on the limited information that we have in front of us, I would either go buy a buy and hold property in a less expensive market and just repeat that process every three to five years as you save up another 70,000 bucks. Or I would try and do a small house hack somewhere in the county that you currently live in, right? Again, small multifamily, something to that effect. That way you aren’t losing the asset that you’ve already got, but you guys are in a great spot to be a young couple with good income. You’ve got an amazing investing career ahead of you if you just take your time, buy right and keep chugging along. Dave Meyer, we just recently did an episode for the BiggerPockets Money podcast and even mentioned that when he was on the Real Estate Rookie podcast that he’s been investing, I think he said for 15 years, and his goal was just simple, easy investing for 15 years. He knew if he did that 15 years from now, he would be in a great position, and that’s exactly where he’s at. So we don’t have to overcomplicate it sometimes. The simplest approach is the best approach, and it sounds like you guys have a simple solution of you.

Ashley:
Thank you guys so much for joining us for today’s rookie reply. If you have questions that you want answered, go into the BiggerPockets forums and write your question there. And probably before we even get to it, you’ll have tons of responses from other like-minded investors like you, other people trying to get started or expert experienced investors. I’m Ashley Care, and he’s Tony j Robinson. Thank you so much for joining us today, and we’ll see you on the next episode of Real Estate’s Rookie.