Ashley:
If we were starting over in 2026, we wouldn’t be looking for the perfect market, the perfect strategy or the perfect deal.
Tony:
We’d be focused on one thing, making the decisions that actually get a rookie to close on their first deal instead of staying stuck in analysis paralysis.
Ashley:
This is the Real Estate Rookie podcast. I am Ashley Kehr.
Tony:
And I am Tony j Robinson. And in today’s episode, we’re going to focus on five key things that we would do if Ash and I were starting over in our portfolio today. And the goal is that for all of the rookies listening, you can take these five things, implement them into your strategy to make sure that you are, by the end of this year, hopefully one of the folks we can bring on as a guest to the podcast say, Hey, I listened to this episode and now I’m the proud owner of my first real estate deal. So five key things. The first thing that we do is we’d start by asking the right questions. And what I mean by this is that oftentimes we see rookie investors who just are kind of focused on the wrong thing when they’re starting off their journey of real estate investing.
And sometimes it could be focused on steps that are maybe too far ahead, like, Hey, well, how am I going to buy my second deal? Or how do I scale? And then, okay, well, you haven’t done your first deal. Why are you worrying about scaling today? Or what does the legal structure look like? And I need this holding company based out of the Cayman Islands and all these crazy things, and they’re just asking the wrong questions. So the core questions that I would focus on first are what is my time availability? How much time can I allocate toward my goal of investing in real estate? What is my risk tolerance? How much purchasing power do I have, which is my cash on hand and my ability to get approved for mortgage? And then what’s my motivation? So time, availability, risk tolerance, purchasing power and motivation for time availability.
The reason that I start with this is because this is a limiting factor for the type of deals that you should be focused on. Now, I will put a big caveat to this is that I hear oftentimes people say that the reason they want to invest in real estate is because they want to at some point in the future, have the ability to have more control over their time. Because right now they feel like they don’t have a ton of time, but they want real estate investing to be the thing that gives them more time. But then in the same breath, they say, well, I don’t have time to actually do all the work that’s required to be real estate investor. And if you hear that being said out loud, you can see how that’s just like this closed loop where you’re going to be stuck in this space of not having time, right?
Because in order to do the thing that will give you the time you need to be able to allocate some time, but you don’t have time. So you can’t start that thing, so you, you’ll never be able to get out of that loop. So I think first you got to be able to make some sacrifices in your life to free up a little bit of time if you felt like you’re truly maxed out. But that’s the first one is the time availability. The risk tolerance is everyone sleeps differently at night depending on the kind of risk that they take on. There are some people who are totally fine with the super risky deals because they’re like, Hey, I’m going to swing for the fences. And there are other folks who are like, man, I just want to get on base. So I think understanding what your risk tolerance is and how easily are you going to be able to sleep at night as you take these first steps, the cash in your purchasing power is important because how much cash you have on hand and your loan approval amount will also dictate the kind of properties and locations that you can focus on.
If you’ve got a million dollars cash and you can get approved for a $5 million loan, you’ve got a lot of options. But if you’ve got $10,000 cash and you can get approved for a hundred thousand dollars, that limits more so what kind of opportunities you should be pursuing. So having clarity on that piece first I think is really important. And then the motivation, we talk about this a lot, but understanding why you’re doing this is super important because it makes sure that as you take steps on finding properties, finding markets that it actually supports whatever goals you have in place. Because if you’re doing this for appreciation, well then you better make sure that the properties in the markets you’re focused on do really well when it comes to appreciation. If you’re doing this for cashflow, well then you better make sure that whatever opportunities you’re looking at are really focused on maximizing cashflow. So understanding your motivations I think are first. So those are the big questions I’d ask.
Ashley:
Yeah, the only thing I would add to that is don’t get too caught up on pursuing your passion. And I don’t want to sound like a buzzkill, like, oh, you want to get away from your W2 job. It’s not your passion. You want to feel fulfilled, you want to manifest your dreams. If your why is because you want to make money or you want to build wealth, yes, at some point in time that can probably be correlated to your passion. But if you want to expedite that, you really want to pick the strategy that goes in line with what Tony already talked about, but also where you have resources, opportunity and advantages where you have resources, opportunities and advantages. So for me, I worked as a property manager. The only person I knew that invested in real estate did long-term rentals, and those were my opportunities and my resource to get started.
If I would’ve started in flipping or short-term rental, I didn’t have anybody around me that was doing that to ask for help, to guide for me to follow them. It would’ve taken me a lot longer to be successful if I didn’t have these advantages and opportunities already in place. And I was able to build a really solid foundation by sticking as to what was actually the path that would give me the most progress towards this wealth building. So that’s something you should be thinking about too. If you’re thinking about buying a deal in 2026, don’t get too focused on what your dream job is or your dream investment. Think about what is going to build you wealth the fastest. And I don’t want this to get confused by, oh, they’re posting about self storage and how you can make so much money, that’s the way to make the most money.
I’m going to do that. Don’t get caught up on the get rich quick, and I am not going to say they’re schemes, but I’m going to say that it may work for somebody to get rich to build wealth, but that may not work for you and it may not really be as quick as you think it is. They could have made a hundred thousand dollars on that flip because for some reason they ended up buying every single material they put into that house from a wholesale clearance place, and they did all the DIY themselves. They didn’t hire any contractors, and you might not have the time to actually spend six months rehabbing a property and just shopping wholesale outlets to find the cheapest materials. So don’t look at Instagram, don’t want to think about what is actually going to move the needle for you when you’re picking a strategy.
Tony:
Yeah, I couldn’t agree more ash about not focusing too much on what you see on Instagram. Obviously the purpose of social media a lot of times is to encourage you, inspire you, even this podcast to an extent, but you don’t always see the hard work behind the scenes that goes into that. And you shouldn’t make super big life decisions and you shouldn’t make super big life decisions based on a snapshot you see of someone’s life on social media. So you really got to make sure that, again, you’re asking the right questions, which is what we just walked through to help you make a more informed decision around what strategy, what asset class, what type of real estate investing makes the most sense for you.
Ashley:
I mean, even right now for you guys watching on YouTube, here I am looking all glamorous and beautiful, but in reality, I got sweatpants on a heated blanket on my lap level four heating right now and slippers on. So you never know what’s actually going on behind the camera on YouTube, Instagram, things like that. So once you stop asking the wrong questions, the next mistake rookies make and feels productive, but it’s the reason most first deals never actually close. Next, we’re going to talk about why chasing the best deal keeps you from buying any deal. Welcome back. Once rookies get clear on their situation, the next trap shows up immediately. They start hunting for the perfect deal instead of one they can actually execute. So number two is we pick the boring deal that still moves the needle. Yeah, I am too tired, I’m too exhausted to be tracing the perfect deal.
And the longer you wait to actually get started, the less time you’re actually building equity in a property. And that is really the opportunity that I have seen over the last 10 years of buying properties and holding them and waiting and seeing all that equity build up. And if I’m spending the full year chasing the perfect deal, I’m wasting out on all that time of already getting baked in appreciation and mortgage paid down by my tenant. I’m wanting to take action on a deal that works. It doesn’t have to be the best use of my money. And I see this posted in the BiggerPockets forum all the time, and it’s a great question to ask. I mean, I ask myself questions like this every day, but it’s like I have $50,000 I don’t know how to invest. What is the best thing I can do with it?
And everybody wants to know where are you going to get the best value of your money or the best value of your time? And sometimes that first deal, it doesn’t need to be the best, and you don’t need to overanalyze and get stuck in that analysis paralysis of like, I’m not spending this $50,000 unless I know that I’m getting the max return and I’ve looked at every possible deal in every possible option, and that really is just going to stall you and delay you. I’m not going that route. I’m going to look for a deal that works even if it’s not a home run deal and not super amazing. If someone interviewed me, my YouTube thumbnails and going to be cash flow is $5,000 on our first deal, it’s going to be the slow and boring investment with Ashley Care.
Tony:
My very first real estate deal, I think I was cashflowing like 150 bucks a month, something to that effect. That’s not life-changing money.
Ashley:
That’s what I thought mine was going to be, but then I forgot to account for snowplowing. So it was even less
Tony:
Snowplowing. And now then you break even, right? So I couldn’t agree more. I think oftentimes if we just focus on that first deal being as boring and simple as possible, that simple decision, we’ll unlock your ability to actually get the first deal done. So I think boring and simple is often the approach that most rookies should take because there’s a difference between a deal that looks good and a deal that you can actually close because yeah, I can take you to the hoarder house that’s got a bunch of deferred maintenance that probably needs to be renovated down to the studs, but it’s a really, really good deal. Versus a house that’s mostly turnkey has a tenant in place already that’s slightly above breakeven on cash, left your account for all of your expenses and vacancy and opex and all those things. And the first deal definitely seems a lot better, but which one will you actually pull?
The trick wrong, which one will you actually be able to execute on the hoarder house is down to the studs or the turnkey property that you’ll cashflow a little bit, which you’ll cashflow on day one. So I think the goal is not necessarily just to look for the deal that looks the best, but it’s which one can actually move forward on today. So to Ashley’s point, instead of prioritizing a big home run, we want to try and prioritize for this first deal, something that’s clean and easy to finance, right? Because oftentimes these big heavy rehab jobs are super complex things. They get a little bit more tricky on the financing piece. Simple to no rehab removes the big obstacle of having to manage a rehab for the first time and something that’s just like a very clear path systematically for you to move through to actually get the deal done.
There’s so much talk out there right now about different sexy strategies and subject to and settler financing and renting by the room and conversions to ADUs. And we’ve interviewed a lot of these folks with these different strategies in the podcast as well. So I’m not knocking those, but I am saying that those are slightly more involved than just the strategy of buying a house that’s basically ready to go on day one that’s got a tenant in it, right? Or if even if we want to talk about flipping, what’s an easy way to flip a home or short-term rental, what’s an easy way to do it that way, right? Buying something that’s turn key and closer to it to being ready. But I think just trying to move away from some of the super complex and overly sexy strategies to one that’s a little bit more black and white, cut and dry on that first deal.
Ashley:
I think a great starter property is looking for a single family home or a duplex, a small multifamily that has a tenant in place and it’s somebody the tenant wants to stay there long term and maybe the property isn’t updated, but it’s in good condition. If you could find a property that it’s not completely renovated or up to date, but it’s very well taken care of by the tenant and maybe the tenant’s already lived there for 10 years and wants to keep living there, that could be the easiest first deal that you ever have already having a tenant in place. It’s already cash flowing from day one, even if it’s only $150 a month depending on how much money you’re putting into the deal, but you already have somebody in there that you know is going to take care of the place, your chances of having a long-term renter in there are great.
You don’t have the cost of vacancy and turnover, and then you can just know that you’re going to save. And at some point, if the person does move out, then you’re going to go ahead and renovate the property or over time, which I’ve done with tenants that say a long time is like, I’m going to do an increase this year, but we’re also replacing the carpets, or we’re going to repaint, or we’re doing this upgrade to the property too, to justify why we’re increasing your rent a little bit more than what we usually would. So I think that is also a great opportunity. I have a friend that did that. She invested out of state, and anytime I ask her, how’s that rental doing? She’s like, I think good. I mean, she pays her rent and it was a tenant that lived there forever, just a little single family house. And if there’s a maintenance issue, she will just message about it and then my friend calls someone to go out and take care of it, and that’s it, and it’s said and done.
Tony:
Number three, the third big thing is we’d focus on financing early on. I think that one of the first questions, and we kind of touched on this on the first point, but one of the first things that we need to understand is what kind of financing do we have access to? There are, I’ve used this metaphor, this analogy before, but the lending industry is a lot like the ice cream industry where I can go into different ice cream shops, I can go to Dairy Queen, I can go to Baskin Robbins, I can go to Coldstone, and they all sell ice cream, but they all sell slightly different flavors. And it’s the same thing in the mortgage industry where I can go to lender A, lender B, lender C, and they all sell loan products, but the flavor and how they deliver those loan products is slightly different.
So I think making it a point early on to try and talk with as many lenders as possible to understand all the different flavors of loan products that are available to you. That way you can identify, okay, what is the actual best product for the type of deal that I’m going after? Because the lender who really understands traditional single family long-term rentals is different than the lender who understands small multifamily. And that lender might be different than the lender who understands flipping. And that lender might be different than the lender who understands short-term rentals. And that lender might be different than the lender who understands large commercial properties and RV parks and motels and whatever it may be, self storage. So understanding the loan products that are best for the deals that are in front of you, I think is one of the big things that I would focus on as well, because I’ve seen plenty of deals get to the 11th hour with the lender who says, yeah, sure, I write loans like this all day. And then when it comes time to actually close, you’re like, oh man, this is actually underwriting pushed back on this because of X, Y, and Z, or actually don’t think I’m going to be able to get this loan closed. So having those conversations early on I think is a big thing that Ricky should be focused on as well.
Ashley:
And even if you’re not going with bank financing, lining up your private money lender or where you’re pulling cash out from, or if you’re borrowing from your 401k, make sure you talk to your employer and you understand what the process is to actually get that money out. So one thing that I actually just learned with retirement funds is I didn’t know this is with a Roth IRA, you can actually pull out, I think it was up to like $10,000 without a penalty. And since it’s a Roth, you’ve already paid taxes on it, so no taxes but without penalty for a first time home purchase. So if you’re looking to purchase your first home, you can actually tap into your Roth IRA and pull out $10,000 to put into a property. I thought that was cool, but anyways, have that plan in place of how are you going to actually access the money that you’re going to need and use. There’s been a lot of times where I’ve found a deal and then I’ve went and got the money, and yes, you can absolutely do that, but it is so much easier to have the financing, have the money lined up first, then to do it the opposite way and it makes the deal goes faster and a lot smoother and a less headaches and things like that along the way to actually get the deal done.
Tony:
One last thing I’d add to that, Ash, we’ve answered this question on different rookie replies and folks have asked me this question in person as well is like, is it too soon or when should I go talk to a lender? And my answer is today, because there’s no harm in going to get a soft pre-approval today, so at least you have an idea of where you stand and what loan products are available to you. So if it’s been more than, I dunno, 90 days since you’ve gotten a pre-approval, I might do that process again today just to keep it fresh. You understand what your options actually look like
Ashley:
Because a lot of times with the pre-approval, they’re not actually doing a hard credit pull. So make sure you ask that first. You’re not getting a hard pull every 90 days, but you should be able to do that without having a hard pull on your report to get the pre-approval. And if you are going to get a heart pull, make sure you know what the window is. I can never remember. I feel like sometimes it varies. I don’t know from state to state or what, but I always get it can range from 45 to 60 days or something like that. But you could literally go and have a lender pull your credit every single day within that period of time and it’ll only count as one hard pull. So Tony, what’s the answer?
Tony:
In 2026, you can shop for a mortgage for up to 45 days before multiple applications are treated as separate hard hits on your credit score. Now it also goes on to say that because you cannot control which scoring model a lender uses, financial experts typically recommend a more conservative 14 day window to ensure you are protected under all different systems.
Ashley:
So that might be where there’s a range sometime depending on the so spices, some they must mean like Experian or
Tony:
FICO Vantage score, it themes are the two different ones you’re talking about. So FICO looks like an older version, it was 14 days. The newer version of FICO is 45 days vantage score, usually a 14 day rolling window. So again, hey big disclaimer, Ash and I are, this is chat GPT, Jim and I giving us this information. So go validate this, but 14 days seems like a reasonable timeframe to make sure you can shop with them, but still validate that with your lender as well.
Ashley:
Yeah, literally just go to the websites of the banks and usually most of ’em have a form that you fill out and just take a night and just fill them all out for each of them. The lender will most likely reach out to you, ask for some more information, let them know what you’re doing and things like that. And then they usually tell them that you’re looking to get a pre-approval and that you don’t have a deal in place or anything like that. I have seen sometimes they do even have a checkbox as to, do you have a deal now? Well, they don’t call it a deal, but do you have a property now? Do you plan to get a property within the next month? Are you this for so far out or whatever that you can actually put in there too.
Tony:
Alright, even if you’ve solidified your financing, you know your motivation, you still have to find the right property. And after the break we’re breakdown how simplifying your buy box and redefining what a win looks like finally gets you across the finish line. Alright guys, at this point we’ve gone through all of the big things you need to do, but now we’re talking about the actual deal and the faster you simplify the kind of deal that you’re looking for, the faster your first deal will actually happen. So with that, and the fourth thing that we focus on is that we would ruthlessly simplify the buy box. Now just to define this, your buy box is basically the type of property that you’re looking to purchase. So I always go back to the very first deal that I bought and my buy box was super simple. I wanted a three bedroom, ideally two bathroom property in the 7 11, 0 5 zip code of Shreveport, Louisiana.
There was a 1950s build or newer, that was my buy box and that’s pretty much exactly what I bought. It was a three bedroom, two bath, built in like 56 or something like that, in that exact zip code. So a very, very simple buy box makes it so much easier to A, build your confidence. And then B, it gives you the ability to say yes or say no quickly. The reason that it builds your confidence is because if I’m only underwriting a very tight specific type of property, every time I do that, I get better and better and better at understanding what a good deal looks like versus what a bad deal looks like. Because think about it, if I analyze 100 different three bedrooms in the same zip code, I start to get a really, really good sense of how much revenue that property will generate if it’s a rental, rental, short-term or long-term, or B, what the after repair value is from looking to do a flip. So that way as I find a deal that seems significantly lower price immediately I can say, well man, this is actually a really, really good price because I just analyzed 99 different deals that were $50,000 more than this one, a hundred thousand dollars more than this. And so I know this is a good deal. So as you have a tighter buy box, your ability to more quickly and confidently underwrite deals exponentially increases as well.
Ashley:
We actually have a few resources for you guys too to help with this. You can go to biggerpockets.com/resource and we have a buy box resource which is basically just like a worksheet for you to actually define your buy box and kind of just gives you things to think about, do you care about what the age of the property is? Or one friend that invests in Seattle, he only buys within a certain timeframe from 1940 to 1960 houses because those were built during the great construction and he knows everything about them. So really down to the specifics of the property and things you may not have thought of and you can always add and expand to it too, but it’s a great template that you can [email protected]. And then also too, really defining your neighborhood is I think really important that maybe miss sometimes as to you think, okay, I’ll give you Buffalo for example, as to my picked my market, it’s going to be Buffalo, New York.
Okay, well there’s lots of areas of Buffalo. Are you going to invest in the west side? Are you going to invest in BlackRock? Are you going to invest in the east side? Are you going to invest South Buffalo? Are you going to be by a park? All these different things, but it really goes street by street. So in the rural towns I invest in, it’s not so much, it pretty much is like the town metrics are the metrics, but when you get into bigger cities, there is a triangle and this triangle is the area that I would invest in south of Buffalo. Anything outside of this triangle is literally within walking distance of the two houses I have in South Buffalo, but yet I would not buy them because it is such a distinct difference crossing over this one street or not even a different street, but driving too far west on the one street I would not buy over there.
And I think you need to take a map or get out your drawing tool on your laptop and mark out the actual lines of the neighborhood that you want to be in and really define and narrow down. Then you can use websites like Bright Investor or Neighborhood Watch and those where you can actually really, really get down into the niche of the neighborhood that you’re actually looking in and get the metrics for that exact specific streets and neighborhoods where you can see what I think it’s like Crime Watch, I haven’t looked at it in a long time, but I know Neighborhood Watch and Bright Investor has this integrated now, but there’d be a little pin where crime had happened and what the crime was and what data happened. And so you can see where there’s significantly more crime than there is in other areas too.
Tony:
Yeah, that’s a great breakdown Ash on how to build out your buy box. And I think the other piece that I would layer on top of that is that your strategy, your chosen strategy should also go into your buy box as well because a market that maybe is really good for flipping is not a great market for short-term rentals or a market that’s really good for maybe room rentals, like renting by the room. Maybe that market doesn’t work as well for a traditional long-term rental where you’re renting out the entire house. So understanding your strategy I think leads itself to building out your buy box as well. And we just interviewed on a recent episode, Rashad George, and he broke down how he built out his buy box and he was focused on section eight housing. That was the strategy that he was going after.
So he started his search by identifying the zip codes in his town or in his county that gave the highest rents for section eight. And then once he had those zip codes, he layered in things like crime and schools and all those other things to really drill down on what part of town he wanted to focus on. And then you layer in your ability to actually get approved and your purchasing power and you start to end up with a pretty tight buy box like, okay, here’s the max price, here’s the location, it’s probably going to be this type of property that I’m focused on. So starting with your buy box, super important point.
Ashley:
Okay, let’s move on to number five. We’d redefine a win for the first deal. So a win may be different for everybody depending on why is what you’re trying to achieve with real estate. So there’s no set thing, but a lot of times a win is considered you made money or you’re cash flowing, but this is also an emotional payoff. The first deal, it really builds your confidence, your proof of concept and your skill building, and that holds a lot of value in calculating your RO. I think about going to college and how much people pay to go to college to learn how to do something. So Tony and I both have deals that have cost us and been examples, and that’s the cost of education and the lessons that we have learned on them. And I think that when you are looking at your first deal, you need to understand that this is so much experience that you’re getting by being an active investor and owning property.
Then you are just from reading, listening to podcasts, watching YouTube videos, all of that. You can absorb so much knowledge and it’s just like think of a doctor, think of a teacher, think of a lot of professions where before you can actually get licensed, you have to go through some kind of hands-on training. Obviously a doctor a very long time, a teacher. I think it’s like your last year of college, you have to go and shadow and teach in a classroom for two different semesters. So I think that this is something that is often left out when you’re considering your deal as a win, is not thinking about what you learned and how much better and how much you’re going to improve on the next deal because of that.
Tony:
Yeah, you hit on the emotional side of it and I couldn’t agree more. And we talk about this all the time. The purpose of your deal is not to retire. You we’re almost 700 episodes into this podcast and we have yet to interview someone who retired off of their very first deal. So that’s not the purpose of it. The purpose is to give you that confidence to move on to your second deal and your fifth deal and your 10th deal and like clockwork. We oftentimes see that the complexity of deal number five is significantly higher than deal number one. And the confidence that someone has going into that third, fourth, fifth deal is significantly higher than what they had going into that first deal. So there is a massive, massive emotional transformation between deal number zero and deal number one. So much so that the actual monetary value of that first deal is just icing on top, but it’s that internal transformation where all of the value really lies in that first deal.
And transforming yourself from someone who wants to be a real estate investor into someone who actually is a real estate investor. I think the last thing I’d add to this to you, Ash, is that because so much again of what we see and what we hear on podcasts are people kind of sharing their successes. You’ve got to be careful to not judge your first deal against me or Ashley or some of the guests that we bring on who have been doing this for 5, 10, 20, 30 plus years because we’re at totally different points in our investing journey. So just really say laser focus on the purpose of your first deal, the transformation that it’s supposed to carry, and don’t compare yourself to the person who’s on step 100 when you’re on step number one.
Ashley:
And if you are in the middle of your first deal now, we would love to have you as a guest on the podcast to come and share the experience that you’re going through and what this journey is. And don’t worry about not knowing anything because we just think it is so impactful for when somebody comes on, when it is so fresh in their memory. There are things that Tony and I probably have blacked out from our first deal that we just don’t think about anymore or don’t remember. And so I think if you are listening right now and you’re going through your deal, just telling us the process is going to help so many rookie investors through their process of doing that first deal. So you can go to biggerpockets.com/guest and fill out an application and me and Tony will watch for you and invite you onto the show. I’m Ashley, he’s Tony. Thank you guys so much for listening. If you loved this episode, make sure to give us a little thumbs up and make sure you’re subscribed to us on YouTube. And if you’re listening on your favorite podcast platform, please be sure to leave us a review. We’ll see you guys next time.
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