Generative AI and a rapidly evolving menu of workplace apps have changed the employee experience. People are surrounded by tools that help them write, code, analyze, summarize, design, and automate. Many of these tools are genuinely useful. So useful, in fact, that when organizations ban them, employees do not necessarily stop using them. Often, they continue using them less visibly.
The ASX has ended its day slightly lower, despite tech and AI stocks rebounding on Wall Street.
Shares of NextDC are still in a trading halt as its massive data centre in the suburbs of Melbourne is facing major community backlash, which may affect its bottom line.
Data centre firm Elice plunged more than 30 per cent on its first day of trading on the South Korean stock market.
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Mortgage rates aren’t doing a whole lot of anything today, and that could start to become the problem.
Bond yields are mostly flat, which leaves the 30-year fixed mortgage hovering around 7.375% or so.
While rates have come down from recent highs of 7.625%, it’s clear from the pending home sales report that the housing market is at a standstill.
If this continues, the industry might face another wave of layoffs, mergers, and folks walking away to find other work.
While I’ve said the “win” for now is simply not going any higher, rates that remain stuck here could do plenty of damage as well.
The story lately has been that mortgage rates are going to stay high for longer than everyone expected.
We had a bit of a tug of war over the past few months, but more industry analysts see mortgage rates stuck at these levels this year and through 2027.
For example, Fannie Mae upped their 2027 mortgage rate forecast to 7.5% for the entirety of the year. That’s a big jump from their prior forecast of 6.7%.
Meanwhile, the MBA’s deputy chief economist Joel Kan noted that “Purchase applications fell 18 percent behind last year’s pace, as higher rates are pricing buyers out of the market.”
We already got proof of that in the pending home sales report, which was the lowest on record from NAR going back to 2001.
So basically we’ve got the worst housing market since the turn of the century, on top of what have been some really rough years for the industry.
That means if this merely holds as is, it’ll be enough to lead to more mortgage-related layoffs, closures, and mergers.
Especially vulnerable are the lenders who staffed up early this year, predicting that mortgage rates would finally come down.
They actually did in late February and early march, eventually falling below 6%.
But then we got the Iranian conflict and since then it’s been nothing but higher rates, with a near return to 8% rates again.
Now I’m hearing stories from loan officers and appraisers saying they’ve never seen it this slow.
Eventually that will take its toll and you’ll start to see layoffs, voluntary quitting, and lenders going out of business again.
Today’s weekly mortgage application data from the MBA echoed what the pending home sales report told us.
Purchase applications are well below year-ago levels with mortgage rates hovering near 7.5%.
Simply put, it’s not affordable to buy a home today for many folks with rates and prices this high.
Nor is it attractive to sell a home today, knowing you have to go out and become a buyer again as well.
At the same time, refinancing isn’t going to pick up with most homeowners sitting on much lower rates.
This is the mortgage rate lock-in effect I’ve mentioned many times in the past, which is cutting off both sides of the business.
It might also explain why Fannie Mae just slashed its 2027 forecast for loan volume by nearly 20%.
Now I’m not going to just be all doom and gloom here.
As I’ve said countless times, a slowing economy leads to lower mortgage rates.
So if we do see an uptick in layoffs throughout the housing industry, which accounts for a large chunk of the economy, you might see interest rates drop.
Yes, not the preferred way to get mortgage rates lower, but it’s a way nonetheless.
At the same time, housing inventory will likely start to increase simply with fewer buyers and properties not moving as quickly.
Taken together, you get a housing market with more price cuts, more seller concessions from eager property owners looking to unload, and perhaps lower mortgage rates too.
And as I said, mortgage rates are pricing in all the worst things right now, whether it’s the war(s), high oil prices, inflation, mounting debt, AI-related bond issuance, and a supposed sturdy labor market.
Absolutely nothing is helping mortgage rates right now, so there are many possible levers that can lead to lower rates.
I’d be more concerned if rates were high and there weren’t many paths to get them lower.
Read on: See how much you can afford with my mortgage affordability calculator.
Key Points
The FAFSA Simplification Act introduced significant changes to the financial aid formula, eliminating the sibling loophole and the asset protection allowance. The One Big Beautiful Bill Act then changed the formula again, restoring the exclusion for family businesses and farms and capping Pell Grant eligibility at a higher Student Aid Index. Despite these changes, several strategies remain (and new ones have emerged) for maximizing need-based financial aid eligibility on the 2027-28 FAFSA.
You just have to know what to do and where to look before you file the FAFSA.
New strategies involve contributions to certain types of retirement plans, exclusion of grandparent-owned 529 plans, exclusion of sibling 529 plans, rollovers from a 529 plan to a Roth IRA and exclusion of gifts to the student.
The FAFSA uses income from two years before college starts. The 2027-28 FAFSA, which opened September 23, 2026, uses 2025 income. The 2028-29 FAFSA, which today’s high school juniors will file, uses 2026 income.
That two-year gap decides which moves still work. Income moves only count if they happen in the right tax year, so a high school senior’s family can no longer change 2025 income. A junior’s family has until December 31, 2026 to lower their adjusted gross income for the 2028-29 FAFSA.
Asset moves work differently. Assets are reported as of the day you sign the FAFSA, so moving a 529 plan or paying down debt helps as long as it happens before you file. Our Student Aid Index chart shows how much a lower SAI can be worth.
The table below sorts the seven moves by when they need to happen. Red moves are tied to the tax year the FAFSA counts, two years before college, and gold moves only need to happen before you file. Green rules apply to every FAFSA you file while the student is in school.
Red is the window that costs families the most. Selling stock at a gain or exercising stock options in a year the FAFSA counts adds the full amount to adjusted gross income, which can raise your SAI for that aid year. The move is to sell appreciated investments and exercise options before that window opens.
For a student starting college in fall 2028, that means by December 31, 2025, the middle of sophomore year of high school. Gains taken after that date, through December 31 of the student’s sophomore year of college, land in a year a FAFSA counts. Unavoidable gains in those years can be offset by selling investments at a loss in the same year.
| Move | Why It Works | When | Watch Out |
|---|---|---|---|
| Sell Investments And Exercise Options Early | Gains taken before the FAFSA income year never show up in AGI | 3+ Years Before College | A sale inside the income year adds the full gain to AGI |
| Max Out A 401(k) Or 403(b) | Pre-tax payroll contributions lower AGI and aren’t added back | 2 Years Before College | Traditional IRA, SEP and SIMPLE contributions still count |
| Move A Parent 529 To A Grandparent | Grandparent-owned 529s are ignored by the FAFSA | Before Filing | CSS Profile schools still count it |
| Give Each Child Their Own 529 | A sibling’s 529 isn’t reported on the FAFSA | Before Filing | The student’s own parent-owned 529 still counts |
| Pay Down Debt With Cash | Lowers reportable cash on the day you file | Before Filing | Home equity and retirement balances aren’t FAFSA assets |
| Keep Gifts Out Of The Student’s Name | Unspent gifts count as student assets at 20% | Before Filing | A grandparent-owned 529 avoids the hit |
| Leave Retirement Accounts Alone | Balances aren’t assets, but withdrawals count as income | Every Aid Year | Even a tax-free Roth withdrawal counts |
The treatment of retirement plan contributions has shifted under the simplified FAFSA:
Retirement plan balances are NOT reported on the FAFSA as an asset. That makes the 401(k) contribution limits one of the few places a family can move money that lowers both reported income and reported assets at the same time.
FAFSA Simplification made several changes regarding how 529 plans are treated:
Gifts to the student are no longer reported as untaxed income to the student because the cash support question has been eliminated. So, grandparents can give gifts to their grandchildren without worrying that the money will be treated as income on the FAFSA.
However, unspent gift amounts must still be reported as an asset on the FAFSA, which may reduce aid eligibility by 20% of the net asset value. Grandparents who want to avoid that hit can contribute to a 529 plan they own instead of giving cash to the student.
Here are some other tips:
Although the sibling loophole has been eliminated on the FAFSA, a version of the sibling loophole remains on the CSS Profile form. The CSS Profile reduces the parent contribution when there are two or more children in college. Under the College Board’s methodology, the parent contribution is reduced by 40% when there are two children in college, by 55% when there are three, and by 65% when there are four or more.
Although the number in college question remains on the FAFSA, it no longer affects the Student Aid Index (SAI). One can appeal when one has an unusual number of children in college, but college financial aid administrators are unlikely to make an adjustment in response to the financial aid appeal. They are more likely to make an adjustment when the parents are enrolled in college (e.g., subtracting the paid bursar’s bill from parent income).
The FAFSA now bases reporting on the parent who provides the most financial support during the 12 months ending on the date the FAFSA is filed, rather than the parent with whom the student lives. The living accommodations and meals provided by the parent to the student can be considered to be in-kind support.
Other children must live in the household and receive more than half support from the parent to be counted in family size. Previously, the child just had to receive half support, but now they must also live in the household. This means that a stepparent cannot count children from a prior marriage unless they live with the stepparent. (Graduate students must also live with the family. However, temporary absences for school, illness, business, vacation or military service do not affect whether the child lives with the family, if there is a reasonable expectation that the child will return to the home.)
The Tax Cuts and Jobs Act of 2017 changed the reporting of alimony on federal income tax returns for new and modified divorces starting in 2019. Alimony is no longer subtracted from the payer’s income and added to the recipient’s income. If the recipient is the parent responsible for completing the FAFSA, this may yield lower income, increasing the likelihood that the student will qualify for the Federal Pell Grant.
Related: How To Fill Out The FAFSA For Divorced Families
The Asset Protection Allowance (APA) is now zero, so assets are no longer sheltered based on the age of the older parent. The 2027-28 need analysis tables keep the allowance at $0 for every age.
However, some applicants are exempt from asset reporting. There are three circumstances in which assets will be disregarded on the FAFSA:
Child support received is reported as an asset, not as income. Because assets are assessed at a lower rate than income in the SAI formula, that treatment reduces the effect of child support on aid eligibility.
Starting with the 2026-27 FAFSA, the net worth of a family-owned small business no longer counts as an asset. The One Big Beautiful Bill Act restored the exclusion that FAFSA Simplification had removed, according to NASFAA’s summary of the Education Department’s guidance.
The exclusion covers a business with 100 or fewer full-time or full-time-equivalent employees that the family owns and controls, a family farm on which the family lives, and a commercial fishing business the family owns and controls. Larger businesses, investment farmland and rental real estate are still reported, with business and farm net worth adjusted using the federal tables.
The CSS Profile doesn’t have to follow the federal rule. Families with a business who apply to CSS Profile schools should expect those colleges to ask about business assets and to apply their own methodology.
The Income Protection Allowance (IPA) increased significantly under FAFSA Simplification, sheltering more income from being counted. For the 2027-28 FAFSA, dependent students have an IPA of $12,220, while married independent students with dependents have $59,930 for a family of three.
The following IPA figures for the 2027-28 FAFSA come from the Education Department’s need analysis tables. They depend on whether the student is a dependent or independent student, whether they have a spouse, and whether they have dependents other than a spouse.
| Who | Income Protection Allowance |
|---|---|
| Dependent Student | $12,220 |
| Parents Of A Dependent Student | $30,300 (family of 2), $37,720 (3), $46,590 (4), $54,970 (5), $64,290 (6), plus $7,260 per member past 6 |
| Unmarried Independent, No Dependents | $19,000 |
| Married Independent, No Dependents | $30,470 |
| Married Independent With Dependents | $59,930 (family of 3), $74,000 (4), $87,320 (5), $102,120 (6), plus $11,530 per member past 6 |
| Single Independent With Dependents | $57,050 (family of 2), $71,040 (3), $87,700 (4), $103,500 (5), $121,030 (6), plus $13,680 per member past 6 |
Eligibility for the Federal Pell Grant now may depend on a secondary formula, which compares income to a multiple of the poverty line. For the 2027-28 FAFSA, the SAI and Pell eligibility formulas use the 2025 poverty guidelines.
Two rules from the One Big Beautiful Bill Act now limit Pell Grant eligibility. A student whose SAI is at least twice the maximum Pell Grant is ineligible for a Pell Grant, even if the poverty-line test would otherwise qualify them. For the 2026-27 award year that cutoff is $14,790, according to the Education Department’s Pell Grant announcement, and the 2027-28 cutoff depends on the maximum Congress sets.
The second rule affects families who work abroad. Any foreign earned income exclusion is now added back to AGI for the Pell eligibility tests, so excluded foreign income no longer helps a family qualify for a Pell Grant.
Several tried-and-true strategies remain effective:
FAFSA Simplification and the One Big Beautiful Bill Act introduced significant changes, but savvy families can still maximize aid eligibility by leveraging new strategies and adapting old ones. Families who understand how the FAFSA treats income, assets and savings plans can estimate their SAI before they file and make each move in the right year.
The 2027-28 FAFSA uses 2025 income and tax information. The 2028-29 FAFSA will use 2026 income, so families of current high school juniors can still change the income that FAFSA will count through December 31, 2026.
Yes. Pre-tax 401(k) and 403(b) contributions don’t appear in adjusted gross income, and the FAFSA no longer adds them back. Traditional IRA, SEP-IRA, SIMPLE and Keogh contributions still count as income.
A parent-owned 529 plan for the student counts as a parent asset, which has a smaller effect than student assets or income. Grandparent-owned 529 plans and 529 plans for siblings aren’t reported on the FAFSA at all. CSS Profile schools still count every 529 plan that names the student as beneficiary.
Yes. Gifts to the student are no longer reported as income, and grandparent-owned 529 plans aren’t reported as assets or income. Cash gifts the student hasn’t spent by the time the FAFSA is filed still count as student assets.
Not if the family owns and controls it and it has 100 or fewer full-time or full-time-equivalent employees. That exclusion returned with the 2026-27 FAFSA. Larger businesses are still reported, and CSS Profile schools may count business assets under their own rules.
Editor: Robert Farrington
Reviewed by: Colin Graves
The post How To Hack The FAFSA In 2027-28: 7 Legal Moves That Lower Your SAI appeared first on The College Investor.
In September, a Delaware LLC paid $69.5 million for a 17,500-square-foot oceanfront estate at 255 Ocean Boulevard in Golden Beach, an exclusive oceanfront town in Miami-Dade County, a public records search by Fortune found. The buyer was a Delaware LLC, a structure that keeps the person behind the deal out of public view.
But agents and other sources in town have pointed to Bezos, according to The Real Deal, and say he’d likely treat the property as a beach house. Public records list the buyer as Meridian Coast LLC. Bezos hasn’t publicly confirmed the deal, and representatives for Bezos didn’t immediately respond to Fortune’s request for comment.
Routing purchases through LLCs and trusts has become a more common practice among the ultrawealthy, who increasingly see public attention as a security risk.
“The goal is to ensure that, even if someone digs into ownership records, they still cannot easily connect the property back to the principal owner,” Ken DeLeon, founder of Palo Alto, Calif.-based DeLeon Realty, told Fortune earlier this year.
The beach house is only about a 30-minute drive from his compound in Indian Creek, also known as “Billionaire Bunker,” a 300-acre, man-made strip of land that has attracted the ultrawealthy. But for buyers at Bezos’ level, owning another home near the one they already have isn’t redundant, Mendel Fellig, founder of the Miami Beach-based Mendel Fellig Group at Compass, told Fortune.
“A buyer may already have an incredible waterfront home but also want direct access to a private stretch of beach,” Fellig said. “Golden Beach is one of the few places in Miami that can offer that. The second property becomes an extension of their lifestyle—almost an amenity in itself.”
The deal set a record for a single-family home in Golden Beach, according to The Real Deal. The house has seven bedrooms and 12 bathrooms, plus a guest house, a pool and spa, and 100 feet of water frontage. It hit the market in February for $88.5 million, public records reviewed by Fortune show, and was later cut to $79.5 million.
“Acquiring a whole portfolio gives these buyers access to different residential experiences for their lifestyle while securing properties that are increasingly difficult to replicate or replace,” Felling added.
To be sure, Devin Kay of Douglas Elliman told Fox Business recognizable names tend to get attached to blockbuster deals when a buyer’s identity is hidden.
“The reality is that South Florida’s billionaire buyer pool has expanded considerably,” Kay told Fox Business. “There are international business owners, hedge fund executives, technology founders and multi-generational families quietly acquiring some of the most valuable real estate in the region.”
But if Bezos is the buyer, the Golden Beach home would join a portfolio he started building after leaving Seattle for Miami in 2023. He said at the time he wanted to be closer to his parents and to Blue Origin’s operations at Cape Canaveral, but the move has also paid off at tax time. Florida has no state income or capital gains tax, and Bezos saved an estimated $1 billion in 2024 alone, Fortune previously reported, citing a Forbes calculation he would have owed about $954 million in Washington state capital gains tax on his Amazon stock sales that year.
Part of what drives these purchases is that there’s so little to buy.
Fellig says one of his clients recently bought a home for $30 million and got a $35 million offer to sell it a month later.
“He declined because he couldn’t replace what he had,” Fellig said. “That’s the dynamic in these exclusive neighborhoods—even when someone is willing to pay more, there may be nowhere comparable for the owner to go.”
Still, Fellig cautions neighbors against reading too much into a headline sale.
“These transactions tend to raise sellers’ expectations, but expectations and actual market value are two different things,” he said. “A nearby owner may see a headline sale and decide their home is suddenly worth 20 percent more. That doesn’t mean buyers will agree.”
Jay Roberts, CEO of Prosper Group and developer of Bugatti Residences Miami, sees demand holding up. He points to buyers leaving higher-tax states and international buyers seeking stability. He told Fortune Miami-Dade’s residential sales above $30 million have already broken the previous annual record. He also credits corporate and institutional investment, including Carnegie Mellon’s planned Miami campus, which Ken Griffin is funding with $2 billion of his record $3 billion gift.
“We believe Miami is still in the early stages of a growth cycle that will compound for decades,” Roberts told Fortune. “People will continue to move here—especially those with a high net worth.”
Capital One is currently showing an increased Discover it Cash Back that can be worth up to $300 total for new cardmembers.
The offer combines a $200 early spend bonus with a separate $100 referral bonus, while the card still keeps its usual first-year Cashback Match. We recently discovered that the cash back match also includes Capital One Offers.
There are two parts to this $300 bonus:
Existing or previous cardmembers may not be eligible for this product if they have received a new cardmember bonus for this product in the past 48 months.
The Discover it Cash Back card still offers the usual dollar-for-dollar match of all cash back earned at the end of your first year.
The card also earns:
The cash back match includes the cash back earned on your purchases, as well as cash back earned through Capital One Offers.
If you already have this card, you can share referrals in the Danny Deal Guru Facebook Group.
You can earn $100 for every successful referral, up to a maximum of $500 annually.
This is a much better offer than the $100 bonus Discover it Cash Back usually has.
Just make sure to apply through a referral link, so you get the extra $100 with just one purchase. Then you will need to spend $500 to get another $200. Then continue using your card throughout the first 12 months and all your cash back will be doubled.
Opinions expressed by Entrepreneur contributors are their own.
One of the decisions that can determine whether a growing company scales smoothly or starts to strain has little to do with the product, the pitch or the funding round. It comes down to something far less exciting: Do you build the operational backbone of your business before you urgently need it, or do you wait until the cracks start to show and scramble to fix it?
After more than 32 years in this industry, I have seen plenty of companies wait. The problem is that waiting can make the eventual fix more complicated and expensive.
I am talking about the machinery that keeps a workforce running: payroll, benefits, compliance, hiring systems and the paperwork nobody dreams about when they start a company. Early on, a founder may be able to manage much of it personally, sometimes with little more than basic software and a spreadsheet. With a small team, you may know everyone’s name and understand every line of payroll. Then growth arrives, and the setup that worked for a handful of employees may no longer be enough.
Founders naturally spend a lot of time planning for growth. They map out the product roadmap, sales targets, hiring needs and the next market to enter. What can get less attention is the point at which managing a growing workforce requires more formal systems and expertise.
That point can arrive quickly. One day, you are approving time off via text or in a group chat. Later, you may have employees working in multiple states, each with potentially different registration, payroll tax, unemployment insurance, leave, wage-and-hour and other employment requirements.
Managing people does not scale on goodwill alone. It needs structure, and companies have a choice about when to put that structure in place, which can help founders feel more confident in their growth plans.
Recognizing that early infrastructure investments enable smooth scaling can help founders feel more confident in their growth plans, knowing they are proactively supporting their company’s future.
Sharp, capable people can delay this for reasons that feel completely rational in the moment.
The first is cost. Building infrastructure means spending money today for problems that may not be urgent yet, but delaying can lead to costly fixes later, risking your control over expenses and growth.
The same willingness to do everything yourself that can help a company survive its earliest days can become difficult to sustain as the business grows. Delegating payroll and benefits responsibilities may feel like giving up control, but establishing trusted systems and hiring experienced professionals can help founders maintain oversight as they scale confidently.
The third is visibility. Problems in sales or cash flow tend to demand immediate attention. Weaknesses in HR administration or compliance can be easy to overlook until they lead to a missed deadline, an incorrect filing, an employee issue, or another costly problem.
By that point, you may no longer be making a deliberate decision about infrastructure. You are solving an urgent problem.
Building early does not mean overbuilding. You are not creating a hundred-person HR department for a team of 20. You are putting the load-bearing pieces in place before the organization puts more weight on them.
That can mean reliable payroll systems and processes that can accommodate employees in multiple jurisdictions. It can mean developing a competitive benefits program, since benefits can play an important role in recruiting and retaining employees. It means having access to people or systems that can help track applicable employment requirements as the company expands into new jurisdictions. And it means creating a hiring and onboarding process that managers can follow consistently without the founder having to oversee every step.
You also have choices in how you get there. You can hire an operations or HR leader when the workload and complexity justify it. You can outsource specific functions such as payroll or benefits administration. Or you can work with a professional employer organization, or PEO, which can take on certain payroll, benefits, HR administration and employment-related responsibilities under the terms of its agreement with the client.
Addressing those needs deliberately can help founders feel more prepared and in control, rather than reactive, and provide reassurance about managing growth effectively.
I have watched strong companies lose time and momentum because their growth outpaced the systems supporting their workforce.
Payroll tax mistakes or missed deposits can result in penalties and additional costs, including fines and legal issues. Expanding into another state without proper registration can lead to costly legal penalties, highlighting the risks of delaying infrastructure investments.
Not every mistake becomes a crisis, and the consequences vary considerably depending on the circumstances. But correcting payroll, benefits, HR and compliance problems after they have accumulated is rarely where a growing company’s leadership wants to spend its time or resources.
Eventually, growth exposes what the business failed to build along the way, so early planning can help founders avoid unexpected operational challenges and feel more at ease with their expansion process.
There is no universal employee count at which a company suddenly needs a more sophisticated HR or operational structure. Instead, look for signs such as increased management time spent on onboarding, multi-state employment or compliance issues to determine when to act.
Maybe you are still approving routine decisions that someone else could handle. You have started employing people in multiple states. Hiring and onboarding new employees are consuming more management time. Payroll, benefits or compliance questions increasingly require expertise you do not have internally. Or you have already had a close call with a filing deadline or an employment requirement you did not know applied to your business.
Those are signs that the systems supporting your workforce deserve a closer look.
The goal is not to build bureaucracy for its own sake. It is to put enough structure in place that adding employees, entering new markets, or accelerating growth does not create unnecessary operational risk.
Scaling is not only about going faster. It is about building a company capable of handling the additional speed. Make the unglamorous decisions early, and the systems nobody talks about may become some of the most important ones you build.
One of the decisions that can determine whether a growing company scales smoothly or starts to strain has little to do with the product, the pitch or the funding round. It comes down to something far less exciting: Do you build the operational backbone of your business before you urgently need it, or do you wait until the cracks start to show and scramble to fix it?
After more than 32 years in this industry, I have seen plenty of companies wait. The problem is that waiting can make the eventual fix more complicated and expensive.
I am talking about the machinery that keeps a workforce running: payroll, benefits, compliance, hiring systems and the paperwork nobody dreams about when they start a company. Early on, a founder may be able to manage much of it personally, sometimes with little more than basic software and a spreadsheet. With a small team, you may know everyone’s name and understand every line of payroll. Then growth arrives, and the setup that worked for a handful of employees may no longer be enough.
Stanford’s business education is gatekept behind their criminally low acceptance rate, and I don’t think that’s fair. So today, I sat down and broke down the 5 key lessons that I learned during my time at Stanford so that I could save you 2 years of your life, and $250,000 in Student Loans.
This video is a bit of a beast, but I promise you if you watch the whole thing (and maybe take some notes while you’re at it), you will be equipped with the fundamental knowledge to go out and crush it in the business world.
–
Timestamps:
00:00 – Intro
00:38 – Business Strategy
08:40 – Building a Product
11:40 – Marketing
14:00 – Financial Analysis
24:40 – How To Be a Good Boss
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Connect with me on LinkedIn:
DM me on Instagram:
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Want to start working for yourself?
Check out my company, Stan:
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source
You want to buy a rental property, so you put 20% down and get a mortgage to cover the rest. This is how most investors buy real estate, but some (Dave Ramsey) think you can do it without debt—or at least less of it. Can you actually build a real estate portfolio with cash? Will a shorter note kill your cash flow? Today, we’re putting these two investing philosophies to the test!
We’re answering more questions from the BiggerPockets Forums—this time, with help from Deandra McDonald, the investor who went from $4,000 to financial freedom with rental properties. After a debate on using leverage in real estate, we’ll field questions from a couple of self-managing landlords who are struggling with tenant screening and turnovers. Should you approve a “questionable” tenant if they’re pre-paying the year’s rent? How do you keep contractors on schedule when doing repairs?
If you’re trying to get into real estate investing with very little money, what should you do? We’ll discuss whether it’s better to raise capital from family and friends to invest today or hold off until you’ve saved up your own down payment. Finally, an investor wants to try their hand at hotel conversions. With this being right in Deandra’s wheelhouse, she shares the investing strategies that have (and haven’t) worked for her!
Henry:
Is Dave Ramsey actually right about rental properties? You want to buy a rental property, it’s $300,000, so you save roughly $60,000 for a down payment and get a mortgage to cover the rest. Now you control an appreciating cash flowing asset and you bought it with only 20% down. This is how most investors buy rental properties. But if you were to ask Dave Ramsey, he’d probably tell you you’re wrong. After all, debt is bad, right? Instead of paying hundreds of thousands in interest and taking on the extra risk, wait a little longer, work a little harder and own the same property free and clear. But does the Dave Ramsey way actually work? Can the average person build a rental portfolio buying properties with only cash? Or let’s say you do use leverage, but you use Dave’s preferred method of a 15-year note. Can you really find properties that will still cashflow with that kind of mortgage payment?
What’s up everybody? I am Henry Washington, co-host of the BiggerPockets Podcast. And today I’ve got a guest co-host, Deandra McDonald, and we are going to be answering that exact Dave Ramsey question plus more in today’s BiggerPockets Forums Q&A episode. So let’s jump in with Deandra.
Deandra:
Hello. Hello, ladies and gentlemen. I’m glad to be back. It’s
Henry:
Going to be fun. You can hear Deandra’s full investor story on episode 1105. That was back in April of 2025. But for anyone who missed it, can you tell them a little bit about who you are and what you do?
Deandra:
My name is Deandra McDonald. I am a commercial real estate investor in Central Virginia. I was introduced to you guys back in maybe 21, 22 when I was flipping motels into residential properties. I’ve grown since then. I’m excited to answer y’all’s questions.
Henry:
Well, thank you for being here. I’m super excited. As you can tell, we do not lack for energy on this episode. Not in this life. Buckle up, folks. Buckle up. It’s going to be a ride. All right. Our first question comes from Jimmy in Phoenix and he asks… I love starting out with something like this. He asks, “What’s your opinion on Dave Ramsey’s method for success? He mentions it’s best to buy real estate with cash, with no debt or a 15-year mortgage as a last resort. But for most that are just getting started, it’s almost impossible to have over a couple hundred thousand dollars to invest in real estate with cash.” All right. If you are new, don’t let the fact that you don’t have a ton of cash stop you.
Deandra:
Yeah.
Henry:
All right? There are hundreds of thousands, if not millions of real estate investors who got into this business, built wealth, and did it without paying cash for properties. Now, most people want to grow and scale. And to grow in scale, you have to do it with leverage, right? Unless you just got mountains of cash, if you want to grow and scale a real estate business, you’ve got to do it with leverage. And Dave sees leverage as something that’s bad. And to me, debt is a tool. And like any tool, if you use it properly, you can get a job done efficiently and effectively. And if used improperly, you can injure yourself, right? Now, one thing I will say, Dave also says that you need to pay off all your debt before you start to invest. My general thoughts are you need to pay off high interest debt,
But smart investors don’t pay off medium to low interest debt before investing. My thought has always been, if I can get a better return on my money through the real estate asset and that return is higher than the interest that I’m paying on the debt, it makes more sense to buy the asset, use the asset to pay off the debt than it does to pay off all your debt and then invest. Because if you pay off every single ounce of debt you have and you’ve bought no assets along the way, then you are debt free in a shoebox. You don’t have anything to show for it. It’s just my two cents.
Deandra:
I agree in some points. I disagree on some. Something I tell the people I work with is Dave Ramsey is for addicts and I think you have to have that mindset, right? Because he was talking to people who got pre-approved and bought an 18 bedroom home and a pool and a two acre lot and never… He was talking to people who had a quarter million dollars in undergrad student loans, somehow got qualified for $95,000 in credit cards. Those people do need to pay off their debt or handle it, I guess, because they are addicts. And so the way you racked up $100,000 in credit card debt, you are going to go after pretty properties that don’t necessarily profit. Now, if you are not an addict and/or have a plan for your debt, so you have a lot of student loan debt, but you’re on the PSLF and you plan to pay it off in these 10 years or these are the minimum payments graduated doesn’t happen for two or three years.
You are not increasing your credit card debt on things that are not making you money. You are not spending 50 to 60% of your income on your personal home mortgage, then yeah, I think it is totally reasonable to take out debt and to buy a property for sure. But sometimes one of the reasons you have no money and you have to take out the debt so you keep spending on other stuff. You don’t have no capacity for it. And that’s where I agree with Dave of part of being a real estate investor is having the capacity to flow. And so if it can only work this one way because all your money is taken up somewhere else, you might have to pay down debt for a little bit, get yourself together and then get into that world.
Henry:
If you’re bad with debt, if you’re sitting on mountains of credit card debt right now and you’re paying 20 something percent interest on those credit cards, yeah, you need to focus on paying those off before you go buy a rental property.
Deandra:
And don’t blame Dave Ramsey because you’re spending up these credit cards and he’s not giving you the out you want. Okay? Okay.
Henry:
Oh man. All right. Good start. Good start, Deandra. I like it. I like it. All right, moving on to our next question. We have Mike in Washington DC and he asks, “For landlords who manage their own rental turnovers, what part usually creates the biggest delay? Getting access to the property, completing the inspection, building the scope, waiting for estimates, making repair decisions, contractor scheduling, change orders or final quality control. In my experience, missing information between each stage is what stretches the timeline and creates additional vacancy.” I would love to hear your perspective as somebody who is a professional landlord.
Deandra:
Okay. I would say it’s going to vary between expected turnover and unexpected turnover. Expected turnover is I know the tenant is leaving. They’re agreeing to leave. We’re all aware of the date and the condition. That is an expected turnover. Someone has decided to not renew their lease or cash for keys or, “Hey, we have a court date and it’s coming whether you want it or not.” Versus if I show up and the unit is abandoned, question mark.
Henry:
That’s always
Deandra:
A fun day. If I show up to an eviction and I can hear them breaking stuff inside, if I don’t know that someone has been left, I hear a dog, but I don’t see the person and I smell a cat, but they shouldn’t have had one, that’s when things extend. And so I would say with unexpected turnovers, the hardest has been getting the keys. How do I have legal access to this unit to remove the stuff, to turn over utilities, change the locks, lock the windows? Because I can think it’s abandoned, but I have to go through the legal process to make sure it’s abandoned. I can think the tenant is gone, but until the sheriff comes and gives me the all clear, I can’t remove their stuff. I can’t just decide it’s time for me to enter. And because that stuff is usually still in there, I don’t know the condition.
So even trying to talk with a contractor, are we just doing paint? Are we doing drywall? Do we have to replace the floors? Are the appliances good? I don’t have the answer to any of that until I have full access. But expected turnover, if there’s just cleaning, painting, delivery of new appliances, that’s pretty easy to schedule. That’s not difficult. But if it’s, “Oh, I didn’t know I had to redo the floors. Can I get on your schedule? It’s the summertime.” And my contractor’s like, “No, you absolutely can. It’s the middle of May. No, I can’t fit you in for this 600 square foot job.” So that would be the harder of it’s not baseline things that I know how to do or I can have my team do, but I don’t know if I can get on their schedule.
Henry:
Yeah, that’s a great point. For me, this is the same with rental properties and with flips. When I’m turning over a unit or when I’m renovating a property, it’s not the full renovation that takes the longest. It is the last 5%, the last blue tape touch up, something wasn’t done right and I got to get the contractor back out there. That’s the stuff that lingers and takes longer. I can schedule a renovation. I can walk into a place and say, “Oh yeah, paint floors, new appliances, call the guy, they do the bid, they go do the work.” It’s when they say, “Hey, we’re all done,” and then I go and they’re not all done. So now we’re fighting over this little thing and that little thing and, “Hey, I need you to come back out here and fix this,” but they already started another job and they’re lollygagging to get back out there.
And so I’ve had to learn different tips, tricks, tactics to ensure that I get those people back out. And sometimes what even happens is you finish a renovation or you finish a turnover and you get in there and you’re like, “You know what? I should have replaced that flooring. I didn’t think I needed to, but now that the place is all painted and turned over, I just don’t like the way it looks.” That last 5% kills you because now I got to go find a guy to do this very small job and to do it quickly and I’m calling him and I already need it done when I call him. I need it yesterday and I’m calling him today and then there’s a two week delay before he gets out there and then he does it and then you have to go and check on it.
So some of the things that we do, I always withhold a final payment until we are all done. Everything is done, we’re checked off, you fixed all the things, it’s good to go. A lot of contractors, the minute they put down the hammer or the paintbrush and walk out of that unit, they’re hitting you up for a check, you can’t pay them everything.
Deandra:
That’s
Henry:
Right. You got to withhold a thousand bucks at a minimum. So enough that they’re going to want to come back and finish so they can get their money after you check it.
Deandra:
I like the tips and tricks of how to minimize it because I forget that that has been happening. For example, for me, flooring was huge in between turnover. If they’re scratching this laminate, then this is going to extend it. So I’m going to actually switch to tile. So now we don’t have the scratch no more. I won’t ever have this issue or I’ll start walking the properties a month or two before they’re out and pull up a rug, move a couch so I can get on his schedule four weeks in advance to minimize that. That’s good.
Henry:
All right. Well, it’s good to know I’m not the only one that struggles with that misery loves company. Thank you, Deandra. We’ve got more questions from the BiggerPockets community and Deandra and I will be back after this break to answer those. We are back on the BiggerPockets podcast. Deandra and I are answering forum questions that you guys have submitted and it has already been a good time. So hope you stayed buckled. We got a few more to go. Our next question comes from BiggerPockets community member, Miguel, and he asked us in the forums, “I have a potential tenant who is willing to pay a full year of rent in advance. She told me ahead of time that she has bad credit and might have a domestic charge from a past relationship with her ex. She wants a year to get her credit better to buy a house.
What do you think?” Now, I have been paid a year in advance and it was lovely. I loved everything about it and I would love for everyone to pay a year in advance. So if you have a good tenant or a prospected good tenant because they may be new to you, you haven’t had them yet, but everything checks out in terms of their application and everything that’s been going well so far and they want to pay you all your rent on day one, give it to me. I’ll take it. I will take it. Absolutely. I don’t have a problem with that. The caveat to this question is she told me ahead of time that she doesn’t have great credit and she might have a charge from a past relationship, but she wants to use the year to get her credit better to buy a house.
So this leads me into the red flags on tenant selection conversation because here’s the thing. I don’t necessarily rule out a tenant because they have bad credit. There’s a lot of things that cause bad credit that I don’t hold against you. If anybody’s ever been through a divorce, they can probably tell you that it destroys your credit. Now I’ve never been through one, but I’ve evaluated plenty of tenants who have been through divorces, terrible, terrible credit. Doesn’t mean they’re bad people, doesn’t mean they’re not going to pay their bills. Medical debt. Medical debt’s crazy in this country. Some people just literally cannot afford to pay it and it’s hurting their credit scores. So I look past some of those things. So my answer to Miguel would be based on how do you think she fares as a tenant based on your review process? And if you think she’s a decent tenant and you would rent to her, whether she’s paying monthly or whether she’s paying yearly, then I would say go for it.
But if you’ve got some concerns with her as a tenant, regardless of what she’s trying to pay you, then I would say listen to your gut and don’t do it.
Deandra:
I’m pretty much on the same page as Henry. Nothing in her application would have said no to me. I run her credit. I’m not picky about credit. Income, depending on her job, but she’s paying me all up front. Now her background check might be concerning. I’m glad you read it out loud. When I read that question, I thought she was running, not that she was the incident. We’re going to find out what this may mean. We’re going
Henry:
To
Deandra:
Find out. We’re going to find out. We may check this maybe, especially my multifamily properties because I don’t know what’s triggering you. I don’t know what the cause of this. You’re going to be living with a bunch of different people, right? So we need to know what’s going on. Now, depending on what comes back, criminals are not a protected class. I can decide, “Hey, this is a good fit for this building or this single family or unfortunately, no, it’s not a good fit.”
The one thing I would just warn people about is if it doesn’t go according to plan, legally, do you know what you have to return? Because I don’t want you to say, “Hey, the rent is $1,500. I got a check for 18 grand. You know what I did? Henry’s taught me how to get to the clothing table.” Buy me another house. I went out and bought me a flip. And then she decides to break her lease six months in and sues you for the rest of that money and you can’t produce it. So make sure that if something goes left, you either still have that money in a high yield savings account of some sort, or you know if you have to give it back or not.
Henry:
That’s a great point. Hadn’t even thought that, but that’s a fantastic point. And I love what you said about checking out their criminal history because again, what we’re really talking about here, folks, is the most important job of a landlord and that is being very good at tenant screening and tenant selection. That our job, that’s our responsibility. But I don’t necessarily rule anybody out because they have a criminal background or a criminal conviction on their record. It depends on what it is for, right? My best tenant to this day, probably my longest standing tenant now to this day, is a convicted felon who did 14 years for a nonviolent drug offense. Oh
Deandra:
Wow.
Henry:
When I tell you this man was almost in tears when we agreed to rent to him because he had wasted so much money on applications and things and people just to turn him down just because he was a convicted felon. So there are tons of good people who were actually rehabilitated or weren’t even in that big of a trouble to begin with based on what they did and they need a place to live. So I don’t rule them out. We got to be good at tenant selection. I also love what you said. It’s a multifamily that you might have been looking at and so there’s other people that live there. So it matters what they did. You don’t want to put a sex offender into a multifamily where there’s kids. You have to pay attention to these things as a landlord.
Deandra:
One of my longest tenants has a DUI, but the DUI is from 99. We’re 25 years past that, but it’s still on her record. It has been expunged. It has been removed and it gets dinged. And if you don’t open to just see what the ding is, you will say, “Oh, this thing you haven’t gotten in trouble for 25 years when you’re 19 is still causing you a problem.” But yes, let me also say for everybody, the criminal charge matters. So number one, yes, sex offenders are also supposed to ask you as a landlord if they’re children in the building because it is their responsibility to figure it out. But I had somebody who come and he was beating up Black people. I said, “Well, number one, this is not going to work.” This idea works. I
Henry:
Don’t know if you are aware, but…
Deandra:
But number two, I can’t have you in this building. That charge was two years ago. No. If you have a hate crime on your record, unfortunately, you will not be in these buildings. Not with me. Absolutely not. So check those criminal records. There are a lot that you can excuse, but there are a lot that you can’t, and it’s okay to say no.
Henry:
That is right. All right. We’ve got another one. This one comes from Kyle and Dayton. Kyle’s 18 years old, very little credit history. I mean, that makes sense. He’s only 18. Yeah.
Very little credit history and very little capital. He says, “I’m eager to start, but can’t get around the glaring issue of not having enough capital. So I was wondering if there are any methods you would use to raise capital or is it just time to put my head down and put in long hours?” I got thoughts, but I want to hear what you got to say because young investors, hey, I love it. I love that you’re even thinking about this at 18 years old. Energy. I can tell you at 18 years old, this wasn’t nowhere on my radar. Not
Deandra:
At all. Not even longer.
Henry:
Proud of you for even thinking about these things.
Deandra:
Okay. There are two things that his message kind of flared up for me. One, he wanted to raise the down payment. My concern with a lot of people who just want to raise a down payment is you are now 100% leveraged and you don’t know how to make money, right? So you are 100% in with now two different groups of money because if you have the down payment, you plan to loan or get a loan for the other 75 to 80%. You are 100% all in and you don’t have no money on your own. So if anything goes left, and it will, babes, it’s your first property. If anything goes left, you can’t get out of it. I only do private money deals at this point, and I do 100% financing on my private money deals at this point. But you know what? I have money.
So if something goes left or not according to plan on that roof, I though I had another eight years, I don’t. I can pay for it if I needed to, or there’s space in the deal for me to use the property to pay for itself. The second thing that came up was he said, “Or should I just work?” And I said, “Oh, so you haven’t been. Okay.
Then why was the first jump other people’s money?” And part of it is BiggerPocket’s fault. It’s our fault because we love OPM and I love it too. I
Henry:
Use it
Deandra:
Exclusively at this point.
Henry:
You do too.
Deandra:
However, OPM at 100% financing from individuals is not an intro level strategy because you don’t know how to balance other people’s money like that.
Henry:
You’ve got no fallback if you got to pay back your lenders and your deal’s not done yet.
Deandra:
100%. And I’ve told my members, and I’m not getting trouble, but that’s okay. This is not my business. I don’t mind if you lose the big bank’s money, right? They have a whole foreclosure process. They know how to do all that. They’re going to take your property, get your money back. Please don’t lose your grandmothers. Please lose your friends. That’s a whole different world because they don’t have the resources to take it back. They don’t know if you’ve set it up right to take it back. So my two things are, hey, 100% leverage feels wild for your first few properties if it’s not your primary residence. And number two, if you are asking if you have to work, the answer is yes.
Henry:
I agree. I’ve said this before on many episodes. It is absolutely possible to buy real estate without using a ton of your own money. It is not possible to own real estate with none of your own money.
Deandra:
Absolutely.
Henry:
You cannot own an asset with no money because 30 days after you close on that house where you didn’t have to put a down payment down, what do they want? They want your first mortgage payment. Where’s that going to come from? You need to have some money. If something breaks in that first month, two months, three months, like me on my second or third rental property, literally the first week after I put a tenant in there, the HVAC went out. Somebody had to come up with $8,000 out of nowhere. Did I budget for that? Yeah, I bought the property right. I underwrote it and bought it at a discount so that I could afford to replace an HVAC. But all that really means is I bought the property a little cheaper so that the property as it appreciates, it pays for itself over time. But I hadn’t owned it long enough for it to produce enough cash flow for me to pay for an HVAC yet.
So it had to come out of my pocket. So just because you can finance a deal 100% doesn’t mean you should. All right.
Got that on the table. Now I understand. Kyle, dude, you are 18 and that is awesome. You are giving yourself such a head start. Raising private capital is fun, but it is also stressful because now you’ve got the burden of not messing up somebody else’s money. And if you are 18, it is going to be very challenging for you to raise private money from people who don’t know, love or like you. Now, you can absolutely probably go raise private money from family, close friends, or maybe they don’t know you, but they know your friends and your family and where you come from. They might give you some money, but the smart ones, even in those circles, are going to be a little cautious because you don’t have a track record yet and you’re going to make mistakes and screw up and they don’t want you learning lessons on their dime.
So it’s probably going to be a little challenging to raise capital until you get some deals under your belt. I’m not saying you can’t do it. You probably could get some money. Should you do it is another question. The last thing you said is, “Should I just put my head down and put in the long hours?” I know I just sound like the old man who’s like, “You just need to pull yourself up by your bootstraps and work hard.” But the one resource you have that a lot of us don’t have as much of is time and youth, which means you can work hard. If you don’t have a wife and kids, it’s just you. You can work two and three jobs. We interviewed a guy on this podcast. His name was Neil Whitney. Neil was in his, I think it was late 40s, early 50s.
I can’t quite remember, but he wanted to invest. His wife said, “Cool, you can do that if you don’t touch our money. You got to go make other money and invest with that.” So Neil drove Uber to raise the money he needed to buy his first rental property. Okay? So Kyle, you’re 18. Just work, save the money. First thing you should do is if you live at home, stay there and then pay rent, but pay it to your savings account. Because what a lot of people do when they don’t have a living expense is they absorb that into their lifestyle. They get used to not having a living expense, and then when you have to move out, it’s a shock to the system. So if you’re living at home now, cool. What would it cost you to live in an apartment by yourself in that same city?
Whatever that average amount is, that’s what you need to be paying every month. Pay it to yourself in a savings account. That’s how you start saving up number one. Then start working and doing extra jobs and saving and building up some of that money. Do your first deal with that money. Get a track record, learn some lessons on your own dime, and then go try to raise some money. I’m not saying you can’t have capital raising conversations with your friends and family in the meantime, and it’ll go a lot smoother if they see you working, saving, hustling, and having a plan for the money and putting it to use. It’ll be so much easier for you to get the money from people if they see you actually doing work, saving money, putting in the effort. But the fact that you’re thinking about these things at 18 and going to put a plan into place, you’re going to give yourself such a head start in life.
But use the resources you have at your disposal right now. You’ve got time and youth. Go make some money, my friend.
Deandra:
Can I also add, if you have no responsibilities, a way to double dip here is also for the work you are about to do to be on your own property. So if you are able to, as a regular, I don’t know, Starbucks, Chipotle, whatever employee, if you’re able to qualify for a little handyman special,
If your extra three hours a night are all learning how to replace this floor and learning how to put in some crown molding and replace a vanity and update some paint, in two years, when you go to sell that property, anything you have made is now tax-free, right? Now I’m guessing it’s not going to be $125,000 in profit in this first property, but anything under that threshold now is just yours. And you would not have made that about working extra as a delivery driver at night past your job. So if you can qualify for a property, because hopefully you have no debt, you have no student loan debt, you didn’t go to college, then buy yourself a good little starter property, fix it up for two years, and now you have that 30 or 40,000 you could use to the next deal.
Henry:
Boom. Sounds like you got some good advice to get you started there, Kyle. I hope it goes well for you. I hope you turn into the most awesome real estate investor that you want to be and it provides you the life that you are dreaming of. All right. Our next question is right up Deandra’s alley, and I can’t wait for her to chime in on it, but we’re going to do that right after this break. All right, we’re back on the BiggerPockets podcast. Investor Deandra and I are answering your questions in the BiggerPockets forums, and right now I have got one that’s basically a slow underhand pitch right down the fast lane for you to knock it out of the park. This question comes from Priyan Shu. He is a real estate agent in Columbus, Ohio, and he posted this question, “I’ve been watching the commercial space and it feels like we’re hitting a tipping point with distressed hospitality assets.
I’ve been heavily focused on converting underperforming hotels into workforce housing or senior living communities. It’s amazing how much the valuation math changes when you re-underwrite the asset based on long-term residential cash flow.” Is anyone in the commercial space looking at a hotel to housing conversions right now? If you’ve done one, what is the biggest hurdle you’ve run into? Was it zoning, heavy CapEx conversion, or something else entirely?
Deandra:
I do do this. So this is where I really expanded my portfolio, was focusing on rundown motels that were no longer performing and transitioning them into not necessarily workforce housing, but just housing in general. And I am totally in it. I’m all about it. It is my favorite type of conversion. It is my favorite type of project. Now, those motels are not as distressed as they were during COVID.
Henry:
Oh, you fixed them all. You fixed them all, is what youre saying.
Deandra:
That’s right. I found them
Henry:
All,
Deandra:
You fixed them. But it is a great solution. There are some issues like you brought up, Priyanchu. The first, I would say largest that I tend to stay away from is zoning. There are some motels that are just not zoned for 30 day stays. The city will not allow it. The county will not allow it because that is part of their five-year plan, their 10-year plan to keep all the motels and hospitality in one section so it doesn’t spill into the rest of the community. For some people, they want it to all be intertwined streets, some are Airbnbs, some are regular rentals, some are housing run by the government. But a lot of counties who have that strict zoning, I would say don’t get involved. It is not for you. Unless you want this long-term plan, don’t do it. It’s not worth it. In terms of the capital to fix it, I would argue it’s no different from a large multifamily property.
I try to go after motels and hotels that are more suite style living so that the setup is already kind of there. I’m not necessarily busting down walls.
Henry:
So it already has a living room, bedroom situation?
Deandra:
Yes. Or if it’s going to be a large studio, there’s already a kitchen with a sink and a spot for a fridge.
Henry:
Oh, that probably saves a ton.
Deandra:
I cannot explain because now I’m just more upgrading everything for long-term living than I am building out a brand new space.
Henry:
For those who are listening, when you think about motel conversions, the part that gets expensive is they’re usually on concrete slabs. So if you need to add plumbing, you’re tearing up the foundation.
Deandra:
Everything.
Henry:
Yeah. And a lot of these have cinder block concrete walls. So it is extremely hard to add plumbing because you got to go through concrete on the floor and on the walls. And so your renovation bill just skyrockets.
Deandra:
Now you’re pulling permits because you have to replace this stuff and the city’s like, “Oh, well, what bodies are in these walls?” You’re like, “Oh, I’m so sorry. If you could not look over there and just focus on the one thing that’s coming out, just the pipe, that’d be great.
Henry:
Please stay focused on the man over here, not the man. It’s fine. Don’t worry about him.
Deandra:
In terms of senior housing, I thought when I started buying these hotels, oh, this is going to be great. We have the silver wave coming. This is going to be a great thing for me to transition into.” It’s not as an investor myself. So let me tell you, let me say. It’s not. It’s not because I don’t know what they need. If I’m going to go that route, I need to be working with a nursing home to give me much more specifics because my brain just doesn’t know. I’m not in the care field like that. Even when I think about my elderly grandma, she might have mobility that they need more than that, or she might have strength and they need more, or they have to be a different sprinkler system or intercom system, all of these pieces that –
Henry:
Commercial kitchens.
Deandra:
It never crossed my mind. The driveway, the wheelchair access, the cost of that is not just, oh, assisted living or workforce housing, either or, which is what I naively though when I first went into it. So if that is what you’re going to do, great. I would work with the care facility already and be like, “Hey, I’m just going to be the landlord.” But what do you need in order to run your business well?
Henry:
I love the point about the city. You said if it’s not in their plan. Working with cities is challenging. It is very hard, very hard to get a city, county, municipality to change their mind on what they want. It is a whole lot easier for you to get approval to do what you want to do if it fits within what they are already doing or what they want to do. And then they can be the best assets and allies on your side. You’re helping them accomplish their goals. The whole dynamic changes. But I think a lot of investors spend a lot of time trying to convince the city on why their plan is what the city should do. And a lot of the times they look at you like, “I do this every day. This is my job. I work here. I improve this city.
And you’re telling me what needs to happen in my city.” There’s tension upfront already. So do the research, learn before you go buying an asset or even making an offer on an asset, try to get some sense of what is that city or municipality wanting to do in that area of town?
Deandra:
Absolutely. I had a visceral reaction when Henry said, “You can’t get what the city doesn’t want.” I remember sitting in a meeting and the guy said, respectfully, “We pay more consulting than you are about to buy this property. You’re not budging us on this.” Right. Got it. My bad. I said, “Let me…”
Henry:
Let me see my way. Thank you.
Deandra:
You’re right. You’re right. And had to sit with Deandra. I get that you’re energetic. You want to do something big and this is really cool. People live here. You don’t even live in this city. No, they care about their place. So take it as that too. Because sometimes take it as you guys don’t want growth. Y’all actually care deeply about it. So what Deandra has done is Deandra has got on those boards. So the town meetings Henry’s talking about, I’m on them now. So I can see in real time, I get to make the decision and also understand that these are real people and when I’m alive, what they’re trying to do, life’s a lot better.
Henry:
Absolutely. All right. Well, thank you so much, Deandra. That was fantastic information. I mean, we wouldn’t expect anything less.
Deandra:
Thank you for having me, Henry. This was great.
Henry:
Absolutely. I’ve enjoyed this so much. Hopefully you guys have enjoyed this as well and gotten great information out of it. For the folks that are listening and they’re like, “Man, Deandra’s pretty awesome. Where can we learn more about her?” How do they do that?
Deandra:
Well, if you want to follow me on Instagram, you can follow me at Deandra McDonald, or if you want to follow me on TikTok or YouTube, simple real estate is my handle.
Henry:
Awesome. All right, everybody. Thank you so much for listening to this episode of the BiggerPockets Podcast. And before we go, as a reminder, these questions are from the BiggerPockets Forums. So if you have real estate questions of your own, you can go to biggerpockets.com/forums. You can get advice from over three million members of the community totally for free, and maybe one day in the future we’ll pick your question and answer it right here on the BiggerPockets Podcast. Thank you so much for listening to this episode. We’ll see you on the next one. Bye.
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A new report says Ontario’s housing market is expected to improve “modestly” next year as favourable economic conditions help push buyers off the sidelines, though higher borrowing costs could dull the extent of the rebound.
