When’s the Right Time to Start Investing? (Age, Money, Lifestyle)

Dave:
When is the right time to start investing in real estate? Are you too young? Are you too old? Do you have enough money? Did you already miss the market timing and all the good deals are gone? I totally get it. Investing in a rental property is a huge decision for your financial future, but also for your lifestyle. You want to make sure you’re in the right place, not just from a financial perspective, but for all those other factors in your life as well. Today we’re talking about this with two other expert investors. What’s up everyone? I’m Dave Meyer, head of real estate investing at BiggerPockets, and I’ve been buying rental properties for more than 15 years. Today on the show we’re talking about when to invest in real estate. We’re going to get into when is the best age to start when you have enough money in the bank to take down your first property, how your lifestyle at different points might affect whether you want to start investing and if there are times in the economic cycle that are better to dive in and whether or not there’s times that you should probably hold out.
So for this conversation, I’ve brought in two great investors who have wrestled with all of these questions themselves. We’ve got Henry Washington here.

Henry:
Hey, what’s up buddy? Glad to be here. Thank you.

Dave:
And we also have Jonathan Green, who’s been on the show several times. He’s an agent and investor based in New Jersey. He’s been one of the most prolific posters in BiggerPockets forums history, and he also hosts his own podcast, Zen and the Art of Real Estate Investing. Jonathan, thanks for joining us.

Jonathan:
Thanks, Dave. Henry, good to be with you guys.

Dave:
Let’s start our conversation about when to invest, talking about age and what the right time to invest is because it seems like every social media influencer is 18 years old now and everyone’s talking about how you have to do it immediately out of middle school

Henry:
Property pros.

Dave:
Yeah, exactly. So Jonathan, you sort of grew up in real estate, right? I remember that about your story. So do you recommend to people starting as soon as they can?

Jonathan:
I think it depends what type of mentorship you have. I was fortunate because my dad literally would not stop talking about real estate from the time I was a baby on. It was just real estate money, real estate money, dirty joke, real estate money, real estate money. So that was fortunate.

Henry:
Wait, was I your dad?

Jonathan:
Maybe this show’s going off of the rails, but I mean, you can’t fault people for not investing at 18 if they don’t have the right background because then I think they will look for that TikTok influencer instead. So I think it’s really about when you feel confident and how you get to that confidence level and a lot of that is who you surround yourself with, not just what you watch because what you watch is one thing, but then what makes you take action is another.

Dave:
Yeah, that’s very good advice and you are lucky. I think very few people have that be able to get all that inspiration and advice about real estate while hearing dirty jokes. I mean, it just sounds like the absolute ideal child. I think

Jonathan:
You’ve grown up, Henry is a great dad.

Dave:
Well, Henry, you, despite raising Jonathan, you started a little bit later in your life, right? But not that late.

Henry:
Yeah, 37 I believe.

Dave:
Do you think when you started was ideal or do you think there is a better time?

Henry:
When I started was ideal for me because I think investing you need to have a certain level of maturity
Because mean it’s a big deal and I think you can start young, but I think the question is less about age and more about financial stability or financial readiness. I don’t think any college student, unless they parents are given them money, is financially stable, but some are more ready than others to invest because some may have some amount of savings, some may be from a family who’s going to help them buy that first property, right? Everybody’s financial position and situation is different. Do I wish I would’ve bought a duplex and house hacked as a college student? Heck

Speaker 4:
Yeah,

Henry:
Me too course, but was I in a position to do that when I was in college? I probably wasn’t. If you can start young, you should, but I think you have to look long and hard about what does, can and ready mean for you. You’ve already got to go to school, which is hard enough. You don’t want to put yourself into a position where you’re defaulting on a property because it didn’t go like you thought. You’re not renting out the unit, you’re not getting the rent. You thought your tenants are destroying your place and you’re trying to cover this expensive mortgage and go to school. If it goes well, it’s great, but it can go well and are you prepared for that?

Dave:
That’s a really good way of putting it. I think that of course everyone’s going to say, yeah, just invest as early as possible. The benefit of compounding is real, but also the younger you invest, the odds of you messing up I think are actually a bit higher.

Henry:
Yeah, I was stupid. I should not have owned a property. I should never have owned a property at that time. Yeah,

Jonathan:
But I think Henry made a good point about maturity because even if you’re financially ready, if you’re immature, you’re not going to do well with the money. So it’s not just about what you know about real estate, it’s what you know about money and if you’re self-aware of what you’re going to do with your money.

Dave:
Do you think that maturity then requires Jonathan some amount of financial literacy and education before actually pulling the trigger?

Jonathan:
For sure. I mean, absolutely. We always talk about real estate, but money is really the sidecar to what moves it. We need the money to get there. So if you look at kind of more like what we were saying in the beginning, what we see on social media and more fire movement, it’s like trying to get people to go quicker, but you want to build a foundation. If you don’t have a foundation, you’re just a house of cards, and that’s why so many people crumble and give up. I find that the people who have become successful over time, were ready. Like Henry said, it doesn’t matter if they were 2030, they built enough runways so that they knew, Hey, I can do this, and if it doesn’t go well, I’m going to be okay. I think that’s what’s really important because there’s inherent some risk in all real estate. We’re lucky to live in America where most things are going to appreciate, but you can make bad buys, but as long as if this doesn’t go well, I’m not going to collapse my life and go bankrupt and ruin my finances for seven years. I think that’s hugely important.

Dave:
I’m so glad you said that because a lot of people I feel get caught up in this idea of risk tolerance and they’re like, oh, I’m comfortable gambling. I’m comfortable taking risk. I’m in

Henry:
Until they get punched in the mouth.

Dave:
There’s a difference between risk tolerance and what I think Jonathan’s talking about, which is what I would call risk capacity, which is like are you in a position to be able to weather the storm that’s appropriate to your risk? And for a lot of people, that means having maybe a stable job. That’s something I cared about before I started making an investment or having an emergency fund or if you have a significant other who has a stable job in healthcare and benefits. Those are the types of things that allow you to take risk to go out there. I think about my own self, my own risk capacity. I started when I was I guess 23 and I had risk capacity. I had nothing to lose. I had nothing. And so I do think there’s something to that, that my time was worth nothing. It was either playing video games or go out and invest in real estate. I wasn’t given anything up by doing it, and so I think there is some element of that when you are really young that you have less to wager in a way where you can just kind of hustle. But I think if you’re starting a little bit later, if you have a family or significant other, you really do need to put those other things in place before you start just investing.

Henry:
You read my mind, I was going to go to that same place, but I think being more mature and having something to lose or something to mess up should force you to be more cautious. And I remember when I started investing with my limited knowledge of investing, I still made sure that what I was buying, if I had to get out of it, I could get out of it and even make money. I wasn’t going to buy something that I felt like I couldn’t just get myself out of that situation because I had too much at stake and it forced me to research to the point where I felt comfortable enough and had I not had something to lose, I probably would’ve just jumped off the cliff and bought something and who knows,

Jonathan:
Right? Yeah. Yeah. I think a lot of people, especially now with technology being so prevalent, they’re suffering from not getting enough reps so they don’t really have the confidence, so when they get the fomo, they just transact. But like someone who says, oh, I looked at 10 properties this week, and I ask, well, how many did you actually look at? And they say, zero. It’s like you just don’t have the experience to be buying. I of course, was over fortunate, walked hundreds and hundreds of properties before I was even 18. That’s lucky for me. I don’t think people can accumulate that number of looks, but you need to get a lot of looks so you can really feel more comfortable with knowing what’s in a basement or understanding what’s in an attic. We’re saying risk tolerance and risk adjustment, but it really comes from how much and who you’re working with. If you work with a baby agent and you don’t know a lot, how protected are you? You go in because look, real estate agents are great. I am one, we all know a million of them, but your regular real estate agent isn’t savvy with investors, so they don’t really understand what a new house hacker’s doing, but the ones that do can really help work together and teach along the way, and I think both of those are important to going and picking the right time. Like you guys were saying,

Dave:
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Henry:
I still get scared when I put a prop

Dave:
Every time, right? You’re like, yes, every time. Why did I do that? I’m so excited at that day, and then the next morning I’m like, what did I do?

Henry:
Yes, yes. I literally had a deal earlier in the year where I made the offer and the lady said yes, and I went,

Jonathan:
But your experience, so the thing with the brand new person who doesn’t have the reps, when they get that oh man feeling they should get it because they start going through every scenario, did I bid too much? We know we didn’t bid too much. We know the values, but the new person immediately. That’s why so many deals fail for new investors and then create havoc in the relationship with realtors because they really do. They get the oh moment, but they have no idea if maybe there are a hundred thousand too high. They just don’t know because they’re not advised and don’t have the confidence.

Henry:
I remember the first off market offer I made on a property, and boy, I’m glad they said no.

Dave:
Yeah, you offered too high.

Henry:
Way too much, way too much. It was way too far out of town. I offered way too much and my inexperience just, it could have really bit me in the butt. Well, had they said yes, I’m sure nobody would’ve gave me money for that deal. They’d have been like, no, we’re not financing that. There’s

Dave:
Some checks and balances

Henry:
There, but inexperience will show itself, right? So it truly does matter.

Dave:
I mean, I wonder what the right amount of reps is, what is the right balance? If you had to come up with that. I think what we’re realizing here is that it’s not about age. It’s about coming up with the right balance of risk tolerance, financial literacy and reps. Jonathan, do you have a rule of thumb or estimate for the audience of what they should expect

Jonathan:
If you’re buying single family? I think you should see at least 20. I would be no less than 20 just because if you’re in a basement area, that’s where all the problems are. The foundation walking the outside and people who are too new that they don’t even want to get an agent, just go to open house on the dumps in the area. If you’re looking to flip, no one’s preventing you. Sure you’re going to get on a lot of realtors lists, but that’s why I think a lot of investors should have their license, not so they can transact and represent themselves because you don’t want as a lawyer to represent yourself, but just so you can go see every dump that comes on the market, it’s so important to just be able, Henry, you have a great agent. You can call ’em and say, Hey, let me see this, but a lot of people don’t, so I think you got to use open houses. You could get six on a weekend. That’s six reps already. You’re ahead of half the market.

Dave:
I was actually doing that this weekend. I was just going for reps to learn my new market. Great, and I wanted buying something. I just found something that was great, but I was not intending even to do that. I went from stuff that was 500 grand. I went to stuff that was 1.5 million that was stabilized, stuff that was in the worst possible shape. Some were a DU development opportunities. Just go see ’em and you’ll get a sense of what makes sense to you, and I think you get a feel for value, and I don’t know how else to describe that because comps are important, but when you do it enough, you can feel what the value is and if you’re getting a good deal or not.

Henry:
Yeah, I would say I probably didn’t feel comfortable walking a house on my own and estimating a rehab probably for six months into me looking at houses, and that’s still a loose level of comfortability.

Dave:
I still can’t do that,

Henry:
But

Dave:
I don’t really flip, so I’m not like a rehab person.

Jonathan:
I can, but I still always think I’m missing something. So I think the more you get people like Henry we’re putting in, there’s overage. I know that I need 15 K for stuff behind the walls and stuff that’s going to come and new people, and one thing we were talking about before that I think is important, just having enough money, but it’s also having enough knowledge to know like, wait, I need reserves. There’s so many people who are like, I can afford 200, so I’m going to spend 200. And then you’re like, but wait, wait, you have to do repairs or you’re buying a multifamily and you have tenants. You have to do upkeep. Reserves are the thing. So when people say, oh, I have a hundred to burn, you don’t have a hundred minus 15%. Keep that for reserves and make sure that you’re safe because that’s what boxes people out. Like Henry said in the beginning, when you push yourself to the limit, you’re just making it impossible for you to succeed.

Dave:
Well, we’ve talked a lot about when the right time to invest is about risk capacity. Now we’ve hit a little bit on financial literacy, getting your reps in, but I also want to talk about lifestyle because this is sort of a really important part of being a real estate investor, is how it fits into your greater life and your family and your other aspirations and hobbies. We’re going to get to that right after this quick break. We’ll be right back. Welcome back to the BiggerPockets podcast. I’m here with Henry Washington and Jonathan Green talking about when is the right time to invest. We’ve covered a lot of topics, but I want to move on to the idea of lifestyle. I personally think about this a lot and how I want to scale my investing and when I choose to do deals because I’m not full-time doing this is a lot based on my lifestyle. What else is going on with me personally and my career, BiggerPockets, other aspirations and hobbies I have. Jonathan, you grew up with this. Have you had to fit real estate into your life or has it just always been sort of part of your life? So that’s not as much of a consideration for you?

Jonathan:
It was, but because my dad was an attorney and I started as an attorney, I never thought of myself as a real estate investor. I just was someone who was being smart with money. A lot of old schoolers that I’ve talked to, it was just, I’ve always wanted to have multiple streams of income. That’s why I invested in stocks. I just like to have things that produce. But I think as I got older, I realized, wait a minute, if I want to do a flip, I’m signing up for a second job. Do I have the time when I’m working a hundred hours for the government to sign up for another job? The answer is no. So I flip much slowly and I’ve never been a high volume flipper because I never was really full-time in just investing,

Speaker 4:
And

Jonathan:
I think that’s again, what’s important for people to say. You’re saying what time does it take? If you want to be an investor, you have another job, and then do you have a family? Is your family going to be mad? Do you want to be spending Saturday and Sunday unclogging toilets? I don’t. I want it to be with my kids. So I think it’s really choosing lifestyle is about your family, how you want to live and all of that.

Henry:
Well, you’re supposed to get your kids to unplug the toilets.

Jonathan:
I mean, when they’re five, you got to bribe them with a, I got bribe. My dad was smart. He bribed me with a video game. If you come pick up the rent, we will get a video game. I’m like, okay, sold deal. Done. Yeah, absolutely. Absolutely. And he always came through, so I mean, but that is a good way to teach though along the way. Yeah,

Dave:
That’s interesting. Henry, did you have kids when you first started?

Henry:
No. No, I did not.

Dave:
Okay, so do you think that made it a little easier?

Henry:
Yeah, it was easier before I got started only because there was less considerations I would need to make. I was married when I got started, but my wife’s been all in since day one, and so it was much easier. I think what really changed when I had kids was my wife’s level of involvement. She used to go with me to look at houses and make offers, and now there’s probably some family thing that she has to do with the kids if I’m doing that, and so that’s changed. You do have to adapt your lifestyle to what you’re doing. I went all in from day one. I really took on the identity of a real estate investor from beginning. I put a lot of weight on becoming a successful real estate investor because I didn’t want to have a plan B, I just wanted to figure out how this worked and I had a flexible enough lifestyle. I learned how to fit in the work that I needed to do. I think a lot of new investors get scared because they think, okay, well, how am I going to find the time to do this?

Speaker 4:
Which

Henry:
Is what I thought too. But once I actually started to market for deals off market, answer the calls, go on the appointments, and I was even managing my own properties, I quickly realized what activities actually took chunks of time and then where I could fit those activities in during my day. And the rest of the things I realized I could probably just have a spreadsheet or some sort of processor system to take care of. So yeah, you’re probably going to be underwater at first, but then you’ll realize, I quickly realize, I’m like, okay, this doesn’t take a ton of time. I spend most of my time either analyzing the deals when they come in, going to the appointments and making the offers and then selecting tenants. Those are the time consuming activities. So I would figure out when I could do those things, I would either do them at my lunch break during my day job right after work on my way home from work is when I would go on appointments. That way when I got home, I could just be with my wife and if I couldn’t fit it into those timeframes, then I probably wouldn’t see that house or do that thing. That was the time boundaries I had to make.

Dave:
Yeah, that makes a lot of sense, and I think that’s the whole key. You can really invest with almost any amount of time When you’re first getting started, you probably need a little bit more time, but you could just adjust your strategy and what you’re trying to do based on your own time commitment. In the past, my rule has been 20 hours a month for real estate, and that’s all I want to commit because I’ve been mostly a passive investor. I’m interested in trying to do some more active things, so I’m consciously changing that, but I do really think about that all the time that here’s my priorities in life, my relationships with friends, family, my wife, I have hobbies that I want to, I have a full-time job, so what amount of time can I give to this and sort of crafting the strategy. It’s probably five to 10 hours a week I would say when you’re first getting started is a good rule of thumb, and if you can’t do that, it’s maybe not the right time for you to at least get started, and if you want to scale down, you do that enough to get your first deal, I think then that’s possible. But you do need, I think five to 10 hours a week is a good idea.

Jonathan:
Yeah, I agree. I mean, it’s really about how you prioritize the things and realizing that you can’t outsource your top priorities. There’s a lot of things you can outsource over time, but in the beginning, you can’t outsource someone to learn for you or get reps for you or rely on everybody to do everything for you because that just makes you a bad investment. You’re a passive participant in an active asset, which is a disaster.

Henry:
Can I ask a quick question Please? Because oftentimes when I hear when is a good time to invest, people are typically asking me because they’re trying to figure out when they should invest from a financial readiness position. Some people feel like they need to pay down all of their debt before they invest. Some people feel like they need to have a certain credit score before they invest. I have an opinion about paying down debt and

Jonathan:
Credit and things, but what do you guys think in terms of financial readiness? The problem is I think if you’re not by the numbers financially ready, you’re likely to get into a rabbit hole of buy with no money down, which of course is possible or getting into sub two. Both are great options, but also not that realistic for someone who doesn’t have experience. So you could spend a lot of time doing that. I think it’s important to have your credit as high as possible, but that’s why you go to a lender early on in the process when you’re looking and say, how do I look? What is my student loan that, what’s my DTI like? How’s everything looking? And then get an overview to see, well, if I have to put 40% down because things don’t look good, that’s just not going to work for me now.

Speaker 4:
And

Jonathan:
If you overthink it before you even talk to a lender to know where you qualify, you may be spending all this time when you’re a year and a half from being ready.

Dave:
Actually, I wrote about this in one of my books, I can’t even remember, but I think it’s start with strategy about this exact idea, Henry, because I think a lot of people say, I have a negative net worth. I have more debt than assets. And honestly, I think that’s where most people start. I don’t think that’s necessarily a bad thing. That’s where I started. I had student loans when I first started, and I actually, I didn’t pay off my student loans until eight years into my investing career, I think because I

Henry:
Paid mine off six months ago.

Dave:
Oh, yeah, I remember that. Yes. Right?

Henry:
Yes,

Dave:
Because I was earning more money and interest in my investments than it would to pay off. So that is one calculation you could do is if you have a hundred, let’s just say a hundred grand in student debt, if you’re going to put that towards your four or 5% student loan, that’s fine, but if you can earn eight or 9% on rental property on that invest, earn the eight or 9% and then pay off the minimum amount. So that’s one thing. The other part of it though is negative net worth is fine. Negative savings rate is not fine. I think if you’re in a point where you are spending more than you are earning, you have building blocks of financial literacy and responsibility to work on, and I understand that people get into that period sometimes to no fault of their own. Sometimes you make a mistake, who knows. But if you’re in that situation, you’re not in a good place to invest, I don’t believe. I think you need to fix that first, because otherwise you’re just compounding your risk and it’s just not worth it.

Henry:
If you don’t have an emergency fund for your own life, you definitely shouldn’t be trying to invest in not having an emergency fund for your real estate.

Jonathan:
Right,

Dave:
Exactly.

Jonathan:
Yeah, because they’ll both call do at the same time, Murphy’s

Dave:
Law, right? Yeah. And I don’t know, sometimes when I first bought a property, I put aside some money for maintenance and maybe something breaks. You just get bad luck and then you have to tap into your personal finances. You got to break a little bit more money to the table, and I’m not saying huge amounts, but if you didn’t have that and your personal finances are sort of walk in a tightrope here, paper thin, it’s just too much risk. It’s not worth it

Henry:
If you’re in a position. This is what I tell, because what I find is people use this as an excuse because they’re scared to start.
Most people know that they’re ready and they’re making excuses, but I would say, look, if you are struggling to pay your own bills and you’re struggling to make ends meet, you probably shouldn’t go borrow money to buy property, but if you’ve got an emergency fund, you’ve got some money in savings and you’ve got a semi-decent credit score, even if you’ve got other debt that you’re working on, I would just do that calculation. Dave talked to high interest debt. Yeah, work on paying that off first. If you’ve got something at 15 to 30% interest, pay that sucker off before you go investing. But if you’ve got normal debt, single digit debt, then I would look at what’s my typical cash on cash return for a real estate investment? And if that cash on cash return for the investment is higher than the debt you have, go invest and use that money to pay off your debt Arbitrage debt. Debt, baby.

Jonathan:
Exactly. That’s potentially the way out when you don’t have a lot of money to get something that earns more slowly. But we’ve been talking a lot about compound interest and the compound effect, the negative part of that works real well against you when you do it. If you don’t do that first fix because you don’t have 7,500, the plumbing issue now it’s a $15,000 issue. Oh wait, now your HVAC broke. You can’t get out of it. So just as we say, real estate can be great for compounding forward. It can go backward. Real, real quick. So can your finances.

Henry:
I often tell the story of the best credit repair hack I ever heard, because when I first got started, a lot of people dunno this. I didn’t have great credit and I worked with a credit repair company to try to help me get my credit back, and they were like, you know what you could do to get your score where it needs to be? You could pay off some of this crap.

Dave:
What a hack.

Henry:
A hack worked like a charm. The first thing I had to do is I had to pay off this outstanding debt that I, funny enough, the outstanding debt that I had to pay was a debt that an old landlord had put on me.

Dave:
Oh, really? It was a full circle moment. Full circle. Yeah. That’s

Henry:
Really full

Dave:
Appropriate.
Well, this has been a great conversation, just sort of the lifestyle side of it, and Henry, thank you for raising that question about financial preparedness. So we’ve really covered it all, but there’s one more topic we cannot get away from. We’re talking about when to invest and everyone wants to talk about timing the market. Is it a good time to invest? We’re going to hit that right after this quick break. Welcome back to the BiggerPockets podcast here with Jonathan Green and Henry Washington talking about when is the ideal time to invest? We’ve talked about all of the financial and lifestyle elements. Now let’s talk about sort of the timing of the market and if there’s a good time, if, does that even exist in real estate?

Henry:
If you’ve stuck around till the end, boy, are you in for a treat? Because the data deli himself, the man who looks at real estate numbers for a living is going to tell us exactly when we should jump in this market because he has it timed perfectly.

Dave:
June 24 marking on your calendar five, February 31st. Oh my God. No. Please don’t take that seriously. Anyone just may have a particular number. I never know. But no, I actually, I made a social media post about this yesterday because I was just thinking about all the objections, either friends or family or people I’ve heard about buying real estate since I started 15 years ago, and it was like in 2010, it was like, oh my God, the market is literally crashing and it was still a good time to buy in 2013. People were like, oh, it’s bottomed out, or prices have been down for four or five years, is now a good time to buy? Then as soon as prices started going up, people were already calling for another crash. Then in 2018, interest rates were going up and people were calling for another crash. Then we had had this rate height cycle and it just feels like to a certain subset of people, it’s never the right time. And then to be fair, on the other side, there are people who are overly confident and say that it’s always a great time to buy real estate. And so Jonathan, let’s start with you. How do you think about market timing?

Jonathan:
Well, I think you should always be looking, but I don’t think that means that the deals are there. You have to, again, that goes back to us talking about reps. To me, I’m always looking and I’m looking at different assets and I’m trying to figure out what I like, and I never stop looking because I love real estate. But I think it goes into, yeah, when somebody says to me, oh, I’m concerned the rates. The rates are high. I’m like, oh, okay, well, when do you think they’re going to come down? What crystal ball do you have that I don’t have? Because you may think they’re going to come down in six months and they may not come down, and historically rates are fine. So it’s just like where are we in the cycle? And of course then you have seller finance where you can adjust.
You can play terms versus price, and there’s so many different things in real estate. So I think that most people, as Henry was saying before, just use it because they’re stuck and they’re scared to do it because if you’re just going on, we’ve had lots of people, they’re like, oh, well, the lender said it’s going to be 6.5 and I’m only going to do it at 6.25. And you’re like, you know how much it’s going to cost you a month over 30 years, it’s like $11. Relax. You’re right. But that’s an excuse mechanism for not having enough confidence and not understanding that’s true. What’s a good deal? And this doesn’t really matter if it’s a great deal, I just call my lender when I’m ready. What’s the rate? Great, let’s go.

Henry:
Awesome.

Jonathan:
Because I know it’s in, it’s not like I’m going to be surprised and it’s six points higher. It’s just the deal is good. I like the asset, and I’m an asset hunter. So

Dave:
Yeah, I think that makes a lot of sense. The whole game of being an investor is just resource allocation. I think the whole thing is compared to what, right? People are like, I’m not going to invest in real estate. Okay, fine. What are you going to do with your money? Is it a better option or a worse option? It sounds overly simplistic, but that’s it. Right? Is it better to keep your money in cash? Sometimes it is, sometimes it’s not. But I totally agree with the sentiment of always be looking.

Henry:
Yeah, man. Two best times to buy a property are yesterday and today, right? Historically, can you look back and say, yeah, that was a bad time to buy property? Yeah, early 2008. Late 2007, sure. Some people are like, yeah, probably shouldn’t have bought then, but no one could time that. And for people like us who are deal hunters, I’m buying typically at a bigger discount than a traditional market crash would indicate. If the market drops 20 to 30%, I typically buy at between 40 and 60 cents on the dollar, which means even if the market comes down 20%, I should still be right side up because we’re looking for deals in this particular sense. We’re not talking about the normal family going to buy their home to live in. And even if it’s your normal family buying your home to live in, just stay there a little longer, the market will rebound. Exactly. It’s not that big of a deal.

Dave:
Yeah, I totally agree with you. I mean, it’s kind of some of the considerations that I’ve been thinking about in my own portfolio recently. It’s like, yeah, right now I’m probably going to make more conservative investments than I would’ve a couple years ago. I’m not going to take as big swings because you can’t count on that. It was like 3% appreciation a month, but what was in 20, right?

Speaker 4:
In 2020?

Dave:
It’s not that, but I still think real estate is just a better place to put my money than in cash. Right now, I’ve been very open on this podcast. I have some fear about stock valuations right now, and so I think real estate is a good place to put your money. And honestly, something that drives me kind of nuts is people comparing returns between now and a previous period. It is totally irrelevant. It couldn’t matter less. What matters is what you could do with your money now versus other asset classes. That’s the only calculation that matters. And to me, real estate is still a very primarily important part of that for my portfolio. I put money elsewhere, but it is still, to me, the thing that makes sense.

Jonathan:
Yeah, I mean it’s just the value add aspect. You can’t value add a stock. You have no input on a stock. You can’t fix it up, and you can’t just let a stock sit there and it will just improve in value because

Henry:
I bet some people wish they could right now.

Jonathan:
I mean, look, what if the CEO does something crazy and then it goes down? Or somebody just says something in the news and a stock goes down. It’s not even real real estate. Nothing happens. It just goes up. Generally, if you just do nothing, it’s going to go up generally in America, unless you just bought super high. But I mean, even if you just buy land, land’s going to increase in value or it’s going to have alternative uses. It’s buy real estate and weight. But even if you don’t want to wait that long, if you look at the cycle just since the pandemic when people were like, oh, I don’t know, it’s a crazy time. It was crazy. I have people who are up 2, 3, 4, $500,000 on their value because they bought in the beginning of 2020 and other people sat bought later. They’re still up, but they’re up less. I mean,

Henry:
You

Jonathan:
Just have to keep your eye on the market all the time and look at stuff,

Henry:
And you just also have to zoom out, right? Because let’s think about it in the history of America in people, normal people being able to buy real estate, people have bought real estate and made money in every single real estate market at every point in the cycle. Now people have also lost money doing all those things, but if we study the ways to success

Speaker 4:
And

Henry:
We are cautious, it’s always a good time to invest because of what you said, Jonathan, if you hold onto it long enough, you’ll look like a frick fairing genius to somebody

Jonathan:
Always.

Dave:
Well, thank you guys so much. That was a good way to get out on this episode. Thank you, Henry, for closing us out here. Well, Jonathan and Henry, thank you. This was a lot of fun and a great conversation. I think hopefully this is really useful to our audience. I know it is daunting. I was scared when I first started.

Henry:
You should be scared. You’re supposed to be scared.

Dave:
Yeah. That’s part of it, but it’s also with risk comes reward, and so that’s Do

Henry:
It

Dave:
Anyway. Idea. Yeah, exactly. Well, thank you both for being here. We really appreciate it, and thank everyone who’s listening right now for being a part of the BiggerPockets community. We appreciate all of you, and we’ll see you for the next episode of the BiggerPockets podcast in just a couple of days.