5 Portfolio Pivots We’re Making This Year (Real Estate Is Changing FAST)
53:09 Share

In today's unpredictable market, some investors might be panicking about their properties while others are finding hidden opportunities that are in plain sight. It's not just about what properties you should buy anymore. It's about making strategic moves with what you already own and being ready to pivot when the market shifts. Today, we are going to share some real world strategies that we're actually implementing with our own portfolios to help you navigate this market.

I'm Ashley Kerr. And I'm Tony J. Robinson. And Ash, I'm excited to kind of get into this, right? About like what's happening in 2025 and how it's impacting us and what we're doing, right? So maybe the best place for us to start

Let's talk Airbnb. You know, I think both of us have some short-term rentals, some Airbnb stuff going on. That's the one thing we have in common since you sold your street, your street free port. So I guess give me, give me the update on yours. I know you had your arbitrage units and you've made some changes there. What's what's going on on your side? Yeah. So right now I have two Airbnbs operating.

I closed down to Airbnb arbitrage where I was renting them out and or I was renting them and then I was renting them out on Airbnb. We had one of those. One of those was actually my first Airbnb, and we've had that since 2018.

Being an Airbnb host and the competition of Airbnb has drastically changed since 2018. In 2018, we got away with picking out furniture from our mom's friend's basements, going around, driving around, like, what do you got in your basement? Oh, yeah, this will work, and throwing that in there. And you really can't do that anymore if you want to be successful and competitive. So we ended up shutting down the two Airbnbs because with an apartment,

that you're renting.

you can only do so much to enhance the experience. And in the market that I'm investing in, there really isn't a need anymore. I mean, we were one of two Airbnbs in 2018, and now there's probably like 20 of them. And so now we're really focused on the unique experiences. So I have an A-frame property that...

is in the middle of nowhere. It's not near anything. And everyone just says, oh, we're just getting out of town. We need to do this. And it does phenomenal. So that's how I'm shifting. I got rid of those Airbnb arbitrages that were really just plain and they were just like a convenient location for people coming into town. But now focusing more on the hospitality side, creating that unique experience. And

And the A-frame we've had for two years going now, and then we just turned another property, a cabin, into an Airbnb. And we opened that up the end of last year in December. And we're really focusing on the experience. It has a possibility.

and go kayaking, use paddle boat, things like that. You know, you bring up a couple of good points, right? Like it went from two Airbnbs to 20. You know, that's a 10x. Yeah, and honestly, probably even more. Yeah, you know, I mean, but I think the points you make about the increase in competition is so important.

valid, not just in your market, but really across all markets, especially going back to 2018. And I think that's what we're seeing in our portfolio as well. Definitely in California, like the Joshua Tree market, I think is one of those markets where not only was there a really sharp increase of supply, but there was also a really sharp increase in quality supply.

And that's been one of the challenges that we've had in that market. Our listings are pretty good, but there's just been a lot of just really, really unique things built out in that market that I think even puts a lot of our listings to shame. And the California market, we've seen revenue kind of dip significantly.

Our other markets, Utah, Tennessee, we've seen markets or revenue kind of stabilize, but definitely seeing, at least in the California market, a downturn in revenue. Luckily, so far this year, we're actually up year over year across our entire portfolio in JT. So I'm excited to see that market kind of rebounding. And I think the reason that that's happening is because

The rate of increase of new listings has dramatically like slowed down. So, you know, like we were growing at like double digit listing growth for several years in a row. And last year, I want to say it was almost zero. Like it was almost like a net zero increase. Right. New listings came on, old listings fell off, but the net change was like close to zero. Right.

but demand still increased, right? So we're seeing this start to balance back out. So my hope is that over the next 12 to 18 months, we'll continue to see that trend, but definitely the new and increase in competition has been a challenge for us in some markets as well. Tony, what is the future like for those two markets? The majority of your properties are in the Smoky Mountains in Tennessee, and then also in Joshua Tree, California.

Do you plan on continuing to buy in those markets or is part of your pivot, your strategy to go into other markets going forward? Yeah. And I think this kind of gets into the other point that we wanted to hit on to today. I don't think that I'll purchase anything new in either of those markets, but only because the strategy that I want to use moving forward, I don't think it's best suited for either of those markets because

And the two things that I really want to focus on are ground-up development and more commercial properties, more boutique hotels and small motels. And California would be terrible for trying to do ground-up development just because of all the red tape that you have to jump through to get those kind of things approved. And there are other markets that are a lot more lenient when it comes to those things. And then from the kind of ground-up development perspective, I don't think I would want to build –

a commercial property, boutique hotel, or motel in a city with such a strong concentration of short-term rentals we'd be competing against. So because of that, both of those markets I think are somewhat challenging for me to say, hey, I think it makes sense for us to keep going in those markets.

Landlords, here's a quick tip. A standardized checklist for property inspections can save you time, money, and headaches. Preventative maintenance means fewer expensive surprises later. Want to save even more? RentReady helps you stay on top of rent collection, lease management, and maintenance requests, all in one easy-to-use platform. And right now, you can get six months of RentReady for just $1 with promo code BP2025.

Visit rentready.com, that's R-E-N-T-R-E-D-I dot com and use code BP2025 to get started. Hey investors, quick question. How many hours did you waste this month chasing down rent, sorting through receipts, or manually reconciling transactions? If you're like most landlords, it's way too many. Every minute lost in busy work means less time finding deals and growing your portfolio. That's why I'm excited to introduce our new BiggerPockets Pro Partner, Baselane.

Baseline's banking and AI-powered bookkeeping platform automatically collects rent, tags transactions in real time, and instantly shows you cash flow reports. Stop chasing receipts and start chasing returns. Sign up now at baseline.com slash biggerpockets and get a $100 bonus to jumpstart your journey.

Baseline is a financial technology company and is not a bank. Banking services provided by ThreadBank, member FDIC. What if I told you you could forget everything you know about investment property loans? Because Host Financial is rewriting the rulebook, tossing out those pesky DTI restrictions.

They focus on your property's income potential. No tax returns or personal income statements needed. Simple, efficient, and tailored for investors like you. Imagine a lender that sees the gold mine in your property, not just the numbers on your paycheck. That's the Host Financial difference. And they're approved in 47 different states, so your next big deal could be just around the corner. Ready to unlock your property's true potential? Visit hostfinancial.com. Don't let old-school lending hold you back another day. That's hostfinancial.com. Welcome back.

back. So Tony, you touched a bit, a little bit on what your strategy is going to be going forward, but what about any current properties you have? Are you planning on selling anything in 2025 or have you already? We actually did. We, um, so again, part of the change that we want to make is rebalancing the portfolio towards what we want to do more of. And there are some properties in our portfolio that we just don't

don't want to keep anymore. And there's also properties that we want to double down and reinvest into, but we also want to make sure we have enough capital to do that the right way. So we're strategically starting to sell off some of our properties where we have some equity, but they aren't like the best performers. So we have some capital set aside to reinvest back into the ones that we want to keep. So we sold one property last month

Uh, we have another one listed right now. Um, and we also have a flip that we've been sitting on for a while now, which we can talk about later. But I think that is the goal for us is to try and identify which properties we can offload. So that way we've got some capital to reinvest back into the other ones that we want to keep. That's pretty much aligned with the same thing that I'm doing. Um,

I had bought a property with a partner in 2021, I think it was, or 2022. So we've had about two or three years. And this was kind of more me being the money partner on the deal and my partner kind of being the hands-on doing it. And they really haven't done much with the property. And I've kind of lost my patience, I would say, as far as like, okay, let's just sell it. Like,

So at this point, just trying to break even on the property, it's definitely has some potential. So I think like if it, it's been sitting on the market since November. So we've gotten a couple low ball offers. We had an offer yesterday that was actually what we want. But I haven't seen the contract yet, a signed contract. So waiting for that, hopefully that does happen. But yeah,

This would be the first property that I've taken a loss on if this happens. And I'm definitely not like a high scale investor where I don't do a million transactions a year. I'm very, very slow and steady with my deals coming in and out. But yeah,

So yeah, this may be the first property that I have taken a loss on. But also some of my properties I haven't sold yet, obviously. So I could have a property right now that for some reason depreciates or I have to sell at a loss for some reason in the future.

I mean, that's not a bad track record. You know, I mean, you're, you're what, a decade almost into this and you've only had, you know, the first deal that you're losing money on. It took me two deals before I lost, lost money on one. Right. So you got me beat by a couple. What about on the, on the flipping side, Ash? I know you had a couple of flips you did this year as well. How, how are those going for you? Yeah, actually the flips all ended last year. I closed all of those out before the end of the year. So I

Right now, I did have a rental property that it's a single family home. It's in just a great area. And so we knew just based on the area, we could sell it for a lot more. So we bought it in 2020 and we bought it for $122,000. And we're under contract right now for $215,000.

We've had it completely rented the whole time. We never had one single day of vacancy. The cash flow on the property paid for any maintenance. We've never had to put any money into it, except for when the most recent tenants moved out recently.

Um, they kind of destroyed the carpet. So we did put about $15,000 into it to get it ready for sale. And, um, so we're under contract right now for 215,000. So, um,

Not a bad deal. The mortgage has been paid down over the last several years, and we're going to make a profit off of this property that we have no money into. So I'm excited to unload that property and, like you had mentioned, have capital to invest in better performing properties that have a higher potential.

And then I'm also doing a live-in flip. So we just closed on that in February. We moved in about a month later and did our appraisal. And so we're in the refinance process right now. I did use a private money lender to do this. And so we did our appraisal. Obviously, we did not within two months do anything.

everything that needs to be done at the property. We just did enough to be able to get it to appraise to what we needed to pull back, pull out our purchase price. And we actually ended up getting back some of the money too that we actually put into it so far. And we're going to hold it for two years while we continue to do renovations and then sell it in two years and pay no taxes.

on the capital gain from the sale. And so it'll be my primary for two years. That's interesting that you use private money to help you buy the primary. Just for my own knowledge, why'd you go that route as opposed to some sort of traditional

primary residence financing? Yeah, that's a great question. First of all, so I didn't have to pay closing costs twice. So I didn't need to get an appraisal on the property for the private money. So I didn't have to pay for appraisal. I didn't have to pay, you know, any of the bank fees that need to be done. So it was basically just that, like not having to pay closing costs. But also another reason was because I actually, you know,

found this property two years ago and negotiated back and forth with the seller, actually the seller's son. And then when we decided on a price before we actually signed the contract, the owner ended up passing away. And so we had to wait for her estate to be put together, who was the executor, sign a new contract.

And then it still took us a really long time to close. Like it took us a year from when the new contract was signed to when we actually closed on the property. And so in the big two years ago, when I initially found this property, it was just going to be a flip. So I just want, I just had money lined up for it and ready to go with the private money lender. So I, that was part of the reason also. Yeah.

And I wanted to be able to, if I was my primary, I could have done three and a half percent down, but this way I'm able to refinance right away and pull all my money out. So I have zero percent down into the deal, I guess. And that's what I was going to say. I like that approach of,

buying your primary that like basically you're burying your own primary. And I never really thought about doing that, right? We think about burying for investment deals, but not burying your own primary. And like for me and Sarah, like our family's growing, you know, you've been to our house, like we're like out of bedrooms right now, you know, it's like we need to buy a bigger house. But even a lot of houses that we find, like, I don't know if they're worth us upgrading yet. You know, it's like, man, we're still gonna have to fully rehab that whole house.

But if we take your approach of like, hey, let's find something, try and get it under market value, get private money, and then we just live in it for two years, that might be a good approach for us. Yeah, it's basically if you guys listen on the market, you've heard of James Daynard or just, you know, wherever on Instagram. But this is literally what he has done for years and years is do live in flips every two years.

And I just did a video about it a couple of months ago where he's basically did live in flips to buy his wife her dream house. And now they have this huge, beautiful house in Arizona. And it was all because he kept doing this and getting this tax free money and building it up to eventually scale up to a larger house. And like you said, you know, you think of a lot of these strategies for living.

rental properties or investments, but like that's what a lot of investors do. They start with a small single family, a small duplex, and then they sell it and do a 1031 exchange into something better, bigger and continue to do that. And it's kind of the same thing. You're scaling up your primary residence and also avoiding taxes, the same that you would do with an investment property. And I know we know Mindy from money.

She's also big on the live-in flip. So, yeah, I've never thought about that. And I guess I'd have to get approval from Sarah, from my wife, about us moving every two years. But it's like we have the resources. We have the ability to do that. So maybe it is the best way for us to kind of keep scaling up. Yeah, my kids were the ones that were hesitant about it. But...

I especially now they love the house that we're in right now, but their bedrooms are kind of small. So I just keep saying, you know, like as you get bigger, you're not going to fit into these little tiny bedrooms anymore. Like you'll want bigger rooms. And so the only request they had is that they can still go to the same school. So we actually didn't move out of the school district. So I do drive them back and forth.

every day. So there can be ways to accommodate certain things within your family to still make it work. - Yeah, sacrifices might be worth it. So we're talking about flips, live-in flips for you. We have one flip right now that we have listed

And if you guys remember, I'd gotten pretty gun shy about flipping because the last flip that we did, we lost like well over six figures on it, right? We bought it, market shifted. We had done like a really nice turnkey Airbnb. Anyway, lost a lot of money on it. And I was just nervous to do another flip. So I was like, hey, when we do another one, I want to make sure that I try and reduce my risk. And when I thought about reducing risk, I was really just thinking about purchase price.

So we bought this flip here in Southern California, like a little mountain town down here. And it was $289,000, which is like pretty cheap for Southern California. But I think the lesson that I learned is that price isn't the only thing.

risk in flipping, obviously. So we bought this property in the fall of last year and it's still listed. We listed it like right before the end of the year, right? So like late, late December, we listed the property. We're now in May. Property's still listed. We've had quite a few people walk in. No one's actually like gone under contract on it yet. And the challenge has been a couple of things. First,

Shortly after we listed it, we had the fires here in Southern California. And this market specifically is like a vacation market for a lot of folks in the greater Los Angeles area. And I think that maybe a lot of our potential buyers that would have thought about looking at this property were maybe potentially impacted by the fires that happened, right? So I think our buyer pool got a little bit decreased.

And then second, it was this mountain town that I'd never I didn't know very well. And the property sits on like a call it like a cul-de-sac. But the road into this cul-de-sac isn't paved and it's like really narrow. It's not a hard road to get into, you know, like we did it. We had delivery trucks going in and out.

but there's been a lot of feedback from buyers that there are other properties that are on like paved roads that are maintained by the county, et cetera, et cetera. So anyway, there's been a couple of things that have happened and now we're at the point where we're just trying to break even on this deal. Um, so we've been pulling down the price, you know, trying to reach out to other people that have bought in that area, see what we can do. But, but I think the, the lesson that I'm taking away from this is that if I really want to reduce my risk, I don't think I can do it in California.

Like I need to go to a market where I can buy something for whatever, you know, 100K, you know, put 50K into the rehab and have some margin there.

Because even on this deal, we bought it just under 300. I was projecting to make maybe 30, $40,000 in profit. And it's like, man, as me taking on $300,000 or even more when you factor in the rehab costs, is that risk worth getting 30,000 or $40,000 back when I could probably go buy a property for a hundred thousand dollars and get that same amount of profit?

So, you know, I've been looking at other markets. I've talked about like Oklahoma City. We just interviewed Lindsay, who was in Gary, Indiana, and that market kind of stood out to me. So I think that's the change that I'm going to make, at least from a flipping perspective, is I'm just giving up on California altogether right now until I can like build my confidence back up and get some wins back under my belt. Yeah, I think that's a good point is like looking at your market too, but also kind of like your buy box. You're going to reevaluate your purchase price and-

the less risk you have, it may not mean as great of a profit, but the more risk you have, it can be no profit at all. So,

Which can be way worse. But yeah, I think that's interesting. So anyone listening, if you guys have a market recommendation that you think Tony should be looking into to flip properties, please put them below in the description. Then maybe we'll do another podcast episode here where Tony actually analyzes your guys' recommendations and we can use the new podcast

platform, bigger deals. Um, if you guys haven't tried that yet, go to bigger pockets.com slash bigger deals, where basically it analyzes properties for you. So you don't have to automatically off the MLS. So, um,

Yeah. Let us know your recommendations for markets that Tony should be looking into to flip a property. Actually, I know neither one of us are like super heavy in acquisition mode right now. And we're focusing a little bit more on stabilizing the portfolio that we already have, trimming some of the fat. But I guess what are you doing right now to stabilize or improve the performance of some of your existing properties? So the first thing was I went through this very long internal debate with myself regarding...

a property. We call it the compound. It's on 30 acres and it has two cabins on it. And my partner, Daryl actually lived in the one property. We had bought it intending to rent it out.

And this was during 2021, the end of, or going into 2022 and interest rates changed dramatically where the numbers didn't make sense anymore to put a commercial financing on this property. You have a higher interest rate than what we had planned.

And so I was lucky enough that Daryl said, well, I'll live in it as my primary residence. And we had bought it with hard money. And so he refinanced out with a primary loan. Um, we actually did a seven year arm. So we got a fixed rate for seven years and it was around like 5%. So at the time that was a great interest rate. Um,

and especially doing the arm. Uh, so we just knew we had to figure out what we were going to do with it within seven years before interest rate could, you know, fly up super high. Uh, but what we ended up doing was we, after he lived there for two years, we had the decision of, do we sell this property and take the tax free gain on it or,

do we turn it into a rental? So we went back and forth, back and forth. And so the lower cabin, we had already started as a short-term rental. And then his cabin that he was living in, we actually turned it into a long-term rental.

So the mortgage on this property, I'll give you guys some of the numbers here as to why it was an internal debate as to we owe $250,000 on the property. And the property could probably sell for between $350,000 to $400,000. So $100,000 at least probably we would be getting back if we sold the property and getting that tax-free.

Then looking at it as a rental, I was really, really conservative with what we could get for a rental. The short-term rental, we're getting about $1,000 to $1,500 per month on the long-term rental after we've paid our cleaner and things like that. And that's with having only about 40% occupancy, 30% occupancy, and not a great occupancy at all.

Um, the longterm rental though, I thought we could only get a thousand dollars per month and Daryl pushed and pushed and pushed. So we ended up renting that out for $1,500 per month and a mortgage payment with taxes. Insurance is 2000. So, uh,

We do have some other expenses with property, like some of the utilities we cover, things like that. So our break-even point is $2,500 a month. So basically, if we have two weekends rented out with the short-term rental, we'll break even on the property. And so...

We decided to go with that and we have it all rented out now and it's doing well so far. But that was like a big internal debate I had with myself as to like which route to go. And I mean, I think it's a great position to be in in that circumstance. And I guess that's

The thing that we kind of decided on was you had to live in a property and have it be your primary residence two out of the last five years, right?

So if it does not end up working out, we can still sell it and still get, you know, not pay any taxes on the sale of the property. What was like the main thing that, that like led you to the decision to keep it? Because you said you got, you know, a hundred to $150,000 in equity. Um, but you're,

just above breaking a few hundred bucks a month, maybe in cash on the deal. And it's like, if you compare just those two numbers, at least like the, it would take you a long time at the current cashflow to equate to the equity you get by selling. So like, what was the main decision point to say, keeping it is actually the best choice. Everybody earmuffs do not listen to this. It was completely emotional that I love this property so much that

And eventually one day when I'm done doing a couple of live-in flips, I want to build my dream house on this property. So this is for me, because even now we've only owned it two years, for us to find even 30 acres for sale that's already somewhat developed, has the infrastructure on it, has two cabins on it.

And when I say cabins, like the one has like a $50,000 kitchen in it. Like these are nice modernized cabins. But yeah.

It was purely emotional to keep that land and the properties so that I could eventually have it as personal use sometime in the future. But Asha, I think we always tell folks like, hey, don't make decisions emotionally. And we should really put like a caveat on that. I think the bigger thing is make sure that if whatever your decision is for a property, that it aligns with your actual long-term goals. Right.

And I think the reason we always tell folks I don't be emotional is because their long-term goal is to maximize cash flow or their long-term goal is to maximize appreciation. And then they get emotionally caught up in these deals that don't actually deliver on those goals. But your goal is, hey, I want to move back here and build my dream home. So the decision you made aligns perfectly with that long-term goal. So I think that's the distinction we need to point out for the rookies. It's like you can be emotional.

Just make sure that that emotion actually lends itself towards achieving what it is you want to achieve. Jeez, Tony, I should have talked to you about this months ago as I'm laying in bed at night. What do I do? I guess the last little thing, too, that I'll add is what I'm doing new this year is that I have this commercial building. It's a five unit building.

And this one is non-emotional purchase or decision making on. And this, it has four residential units. We've remodeled three of them so far. We have one more to go and we actually just did an eviction. We added a tenant that when we purchased it was living there, inherited tenant, and they were fine for a while, but then the last couple of months they stopped paying. And so we just

did that eviction. They're out now and we have to rehab their property. But underneath the residential units is a massive, uh,

commercial area. It used to be a bar restaurant. If you are into hauntings and the supernatural, if you read any book about Western New York, you will find this property in the book that it is haunted. But there's like a full kitchen in there and stuff, but it's completely gutted. And the previous owner before me did a ton of work just to the structure of the building itself.

So now it's pretty much just putting it back together. I think I want to maximize it by kind of changing the layout for a little while. But I bought this seller financing. I've seller financing for four years. So I don't want to put too much money into it right now and have my money sit in there because I don't want to refinance early because I'm paying 3% interest right now.

on the seller financing deal. So I want to like keep that until like the day it's due and then refinance. So I'm kind of delaying this big project, but one

Once we get this last residential unit done, I'm going to spend the rest of 2025 making the plans, getting everything in place so that in 2026, we can go ahead and start the rehab in the commercial part. Tony, for you, what are you doing new this year? And you had mentioned a bunch about stabilizing your portfolio. Yeah, so...

Shedding at least trying to shed some of the properties that we don't want to keep that aren't performing to our standards I think the tricky part in California is that the the resale market in JT is shipped at a ton and We have some larger properties like three bedrooms in that market that we got at the top of the market You know in terms of resale prices we bought for you know High fives that probably today if we really really wanted to sell would have to sell for like low fours right so like those aren't

good candidates to sell if we wanted to. Our tiny homes have held their value pretty well. But anyway, there's some challenges around getting rid of some of the properties we want to get rid of. But for the ones we know we want to keep, we are going back and like adding additional amenities. So like last week, we were walking one of our properties because we were adding another pool.

And we found the in-ground pool to be a really strong amenity to drive additional revenue. So that's kind of our big project for the next couple of months is managing that project to make sure that gets done correctly. Tony, how much does a pool cost? I know around here, if you want...

the fence, the stone, the concrete, everything like all in, like you're looking at like $100,000. The first one we built, we spent about $115,000 all in. This pool, we're probably going to spend about $75,000.

And we learned a lot with that first build in terms of what is a fair price, in terms of what we should be asking and what we should be looking for as we go through that build process. And I don't know if I've shared this yet, but we actually sued that pool builder for multiple reasons. Like we literally had to go through small claims, but they delivered the pool to us. And that month, our water bill was like $4,000.

Oh my God. They delivered the pool to us with a leak. And we have everything set up on autopay. So we didn't even realize that our water bills were like so high. And it went on for like, I think it was three months that it went on. And it wasn't until that third month that we finally realized it. Anyway, there was like a lot of things they did wrong with that bill. Then they just weren't being super accountable. They didn't finalize the permit for the pool. So we went to go like renew our short-term rental permit. And they're like, hey, we can't renew your permit because the pool permit isn't finalized.

So there's a lot of things that went wrong. So anyway, we learned a lot on that build. But the one that we're working on right now, it's about $75,000. But since we want to do this at scale, you know, we've got whatever 19 properties in that market.

19 times 75,000, that's a lot of money, right? So what we're doing instead is that we found a lender that specializes in pool construction. So we're going with them for this build. And it's actually a really cool loan product. It's a 20 to 25 year fixed loan. So it almost aligns perfectly with your mortgage. And interest rates are decent. And I think on this build, it's going to come out to like

600 bucks a month, something to that effect. But you compare that monthly cost against our potential increase in revenue, and there's still margin there to make this deal worth it for us. So that's the path that we're going down right now with this next build. Let me ask you, with that loan product, do they send out someone to do... Is there draw periods or anything, kind of like a construction loan where they're sending someone out to inspect the work that...

like can kind of be an extra set of eyes. Like, Oh, I do this all day long. Like that's wrong. Looking at this pool, there is no inspection from, uh, from the lender. And we've seen it happen in a couple of ways. Like the first time we did it, um, they, they didn't give us any of the money. They just issued the money to the contractor directly. So the contractor would have

There was no inspection. The contractor would just request to draw, I guess, so proof the work was done and they release it for this one. They just literally wrote a check and said, hey, here's seventy five thousand dollars. You take care of it with the contractor. So we've you know, we've kind of seen it in both ways right now. It would be nice if there was like some like certified pool, you know, contractor that did the inspections because maybe wouldn't have the leak issue on the first one.

Um, but yeah, that's, that's a process that we're following right now. It's funny because usually we're like any loan product or you have to go through inspections, like, Oh, get me away from that. But here's like, what circumstance? Us not knowing anything. It's like, yeah, I would love for you to have someone come inspect everything, you know? So here you guys go. Everybody's looking for ways to network, to find a mentor, um,

Tony needs a pool inspector to inspect 19 pools as they're being built. Slide into his DMs and offer your services. So that's like the stabilizing piece for us, Ash. It's just trying to identify what are some of the levers we can pull to add some incremental revenue above and beyond. Just one last point I want to make. I think there's something to be said about reinvesting into your existing portfolio. And we're talking about this a lot right now, right? But

Let's say I have $100,000. I can go out and I can buy one property, two properties, whatever it may be, or maybe I take that $100,000 and I spread it across my existing portfolio to try and drive some incremental revenue. And even though it doesn't feel like you're making more money by reinvesting back into your existing portfolio, the truth is you are. And we've had many instances where we've made improvements to our short-term rentals, game rooms, hot tubs, pools, you name it. And we've seen improvements

80% cash on cash returns with those investments.

You know, we added a game room to one of our properties and it was, I think, a $12,000 expense. And within the first two months, we had made an additional $8,000 compared to what we did the year before, right? $12,000 investment, eight grand back in the first two months. It's hard to do that by going out and buying new property. So for all our rookies that are listening, I think there's something to be said about really, really evaluating where you're at to see what you can do to drive more revenue. Yeah, I think that's such a great point. I mean, just look at the...

you know, okay, one plus of having more properties is you share the overhead, but there's a lot of stuff that is paid per unit or per property, such as, you know, if you're,

you know, your permits, your fees, each short-term rental you get, or even long-term rental, that's another, you know, permit you have to get open or short-term rental fee or, you know, even in Buffalo, if you have a rental property, you need to pay a yearly fee. So I think just like the...

less expenses you have having one property compared to three properties and less headaches. You have one roof instead of three roofs. And so I think investing back into your current portfolio is a great way. And I remember like two years ago, I think it was, or maybe a year ago, we had a guest on that. That was like their whole goal. I

Going into 2024, that was their whole goal of just they weren't going to buy anything more. They were literally just looking at ways that they could add value to their Airbnb by different doing different things. And it was working for them. They're like, we don't need to buy more properties. Every time we add a new amenity or something else to this property, it just increases and we're making more than we would without adding.

all of the work and the time that goes into acquiring a new deal and maintaining that property. Okay. So Ash and I have covered a lot about the pivots that we're making in our portfolio, but next we're going to talk about us turning into cost cutting fiends and ways that we're looking to cut expenses across our portfolio. So we'll be back right after this last break. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast, easy, just use Indeed. When

When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job noticed on other job sites. Indeed's sponsored job posts help you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking. And it works. Sponsored jobs on Indeed get 45% more applications than

the non-sponsored post. The best part? No monthly subscriptions or long-term contracts. You only pay for results. And speaking of results, in the minute I've been talking to you, 23 people just got hired through Indeed Worldwide. There's no need to wait any longer.

Indeed is all you need. Inspecting your rentals again? Here's a pro tip. A

A simple checklist makes sure nothing gets overlooked. It

It saves you time and costly repairs down the road. And when it comes to managing your rentals, RentReady makes everything easier. Rent gets paid on time, leases get signed online, and maintenance requests don't get lost in your inbox. And if you're a BiggerPockets Pro member, I've got great news for you. RentReady is already included in your membership for free. Don't leave it sitting on the table. Log into your BiggerPockets Pro account and start using RentReady today. They say real estate investing is passive, but let's get real.

It's anything but. If you're tired of losing valuable hours on financial busywork, there's a better way. Meet Baseline, the all-in-one platform that can help automate your day-to-day. Baseline's banking and AI bookkeeping auto-tags transactions, organizes cash flow, and preps your Schedule E for tax time. You can also automate transfers and enjoy free wires. Ready to spend less time managing money and more time growing your portfolio? Baseline is giving BiggerPockets listeners a $100 bonus when you sign up at baseline.com slash biggerpockets.

Baseline is a financial technology company and is not a bank. Banking services provided by ThreadBank, member FDIC. Tired of traditional lenders holding you back? Host Financial is here to change the game. They've ditched the DTI restrictions and they zero in on what really matters, your property's income potential. So no more chasing papers for tax returns or personal income statements.

Think about it. A lender that values your property's worth over your paycheck? That's the Host Financial difference. Approved in 47 states, they are ready to help you make your next big move. Curious if you qualify? Just head over to hostfinancial.com and find out. Stop letting outdated lending practices hold you back. That's hostfinancial.com, where your property's potential meets unlimited financing.

Starting your own business can be intimidating because of all the hats you suddenly have to wear. There's the marketing hat for emails and social posts, the web designer hat for your storefront, the copywriter hat, the logistics hat, and of course the hat hat just for tracking all the other hats. It's a lot. But the right tool to simplify it all? Total game changer. For millions of businesses, that tool is Shopify.

Shopify powers millions of businesses worldwide, including 10% of all U.S. e-commerce, from brands like Mattel and Gymshark to ones just starting out. Launch your store fast with beautiful templates that match your brand. Shopify's built-in AI helps with content, too, writing descriptions and headlines and even enhancing photos. Want to market like a pro? Create campaigns wherever your customers scroll. Best of all, Shopify's your expert partner, handling everything from inventory to shipping and returns. If you're ready to sell, you're ready for Shopify. Turn your big ideas into...

You get it. Sign up for your one month, $1 per month trial period and start selling today at shopify.com slash bp rookie. Go to shopify.com slash bp rookie shopify.com slash bp rookie.

All right, guys, we're back. Actually, I think one of the things that real estate investors talk a lot about are tools, automation. And while there's definitely a benefit to having these tools and they can make our lives easier, they can also get really, really expensive. Like for us right now, we spend probably about

Close to a thousand bucks a month, just some like short-term rental data that helps us like analyze deals and things like that. Like it's very expensive to have like nationwide data that's really, really good. So I guess, what are you doing? Are you seeing anything on your side when it comes to like the software, the tools, the tech? And how are you making some improvements there? Well, you used a thousand dollars as an example. I've been over here sweating about a $54 charge for Price Labs that comes across every month for two Airbnb's.

But yeah, so at the end of the year, I sold my property management company to my partner and we had just had our two properties in those. When you have 130 units combined, like you can have all of that software and all of those things. And because that overhead is just spread out by between so many units. But now that I'm not involved in that management anymore, like I have become such a minimalist as to like,

I only have my 30 units left. Like I don't need all this stuff to management. And for, you know, I was did asset management. I was the direct property manager of all these properties for so many years, over 10 years, I did both of our portfolios. And even when we outsource for a couple of years to a property management company, I still did all the asset management. And I think all those years of having so many properties that I looked over,

Now that I just have my little measly amount of properties, it's like, this is so easy. I don't need all of this stuff. And so I've really been going through and cutting the things that I do or don't need. And a lot of the things, they're meant to make your life easier. But I'm also looking at it as to like,

Is this amount of money actually worth it? Or is this something that maybe my time is worth doing? I spent so much time trying to outsource everything, everything. And it was just like, you know what? I actually enjoy doing a couple of these things. Or there's another way to kind of handle this or make a system for this that doesn't need software or expenses. So...

I really cut down on a lot of things. My virtual assistant that helped me run the property management company, I only use her 10 hours a week now. So before I had her 40 hours a week, and now I only have her 10 hours a week. But I also look at it as, okay, I can cut, say, a $300 expense a month

Or I could go out and buy another property and cash flow $300 off of a small rental with no money into it. Probably not even right now.

But that $300 is like, okay, well, I'll just cut this tool or this software that I don't need that much and I'll do an hour of work or something. And instead of going and spending all of my time trying to find the deal, acquire the deal. So I've been doing a lot more focus on asset management and how can I really maximize my dollar growth.

quoting out my insurance as much as I can't stand doing that, like all these little things and trying to cut costs other areas so that instead of going out and purchasing more and more properties,

And then really needing to pay more expenses because I have more, I'm seeing what I can trim the fat off of this year. And then kind of maybe at the end of the year, go and buy another rental or next year too. I love the idea of thinking about your software, just like all of your expenses in terms of like, okay, how many properties would I need to purchase to offset this cost?

And that, that metaphor of, I can either just stop paying for the software or I can go out and buy another deal. Like what's going to, it's still net positive, like, or net the same effect and like, what's actually easier. I love that approach. Um, I think one, one thing, um, that's like a low hanging fruit that we weren't really paying attention to, but it's just like the software that you're like not even really using anymore. That's still kind of billing against your, your, your card every single month. Um,

Like random things I can think of. We have like the Google business, like workspace thing. And that comes with Google Meet, right? So like everyone has access to this video conferencing software. Yet we were still paying for Zoom for like, I don't know, a bunch of people. And we were spending like 400 bucks a month on Zoom. I was like, why is Zoom so expensive? So I literally, at the end of the year, I canceled Zoom for everyone except for myself because they can all just go use the Google version of it.

We had people in Slack who we hadn't worked with in years, but we just forgot to delete them inside of Slack. So just making sure you're going through and like with a fine tooth comb going over every single transaction, not only to see like, okay, are we still using this, but are all the users using

inside of that software, are they still needed and still require a subscription as well? Yeah, I actually did that too. Like cut down, like I had three different domains that had Google suites that, you know, even I had three different email addresses for, you know, each of them. So one with each domain and so like cut all of those, cut it just down to one and yeah.

Yeah. Okay. So I guess before we kind of wrap up here, Tony, are you doing any other investments or changes to your investments that are outside of real estate investing? I don't. You know, I've shared this on the podcast before, but

When we made the transition to short-term rentals, I told myself, I want to, for the next five years, really dedicate myself to this one asset class. And I want to get just really, really good at this one thing. And we're actually at five years right now of us doing that. So maybe now I can shift my focus a little bit. But for me, it's really just been focused on this one thing. I do know, though, Ashley, that

Sarah, my wife and I, we do want to invest in things outside of real estate. And the thing that we'll probably end up doing is owning a restaurant. Sarah's family's in the restaurant space. They have four or five restaurants here locally in Southern California. And to be able to

Kind of get into business with that side of the family would be fun for us as well. So nothing yet, but if and when we do pivot outside of real estate, it'll probably be into that space. Anybody else listening, making this connection right now? I mentioned I had a commercial property that has a full kitchen. Tony eventually wants to open a restaurant. Yeah.

But that's the one that's haunted, you said, right? It's the one that's connected to the haunted house? Yeah. Think of how you could turn that into a short-term rental also, attraction. Short-term rental with a restaurant attached to it. Yeah. People pay money for hauntings or so I've been told. Yeah.

What about you guys? What do you, what are you doing outside of real estate from an investment perspective? So I've had a old 401k from a old job and it's just kind of been still sitting in there. So I did a rollover into a self-directed IRA. I actually used one of our sponsors equity trust and it was like way easier. I guess I always had this picture in my head that it was way more complicated to

than it needed to be, but it was literally like a 20-minute phone call. And I was all set up. I just had to fill out some paperwork. But I actually took that money and instead of investing in real estate, surprisingly, I invested in a tech company. So it's a startup tech company. So I

I just wanted to diversify a little bit. I'm so, so heavy into real estate. Um, so went into the tech company and then this year I'm actually going to max out my retirement accounts that I have this year and put it into index funds. So just to diversify, like literally the last 10 years, it was all real estate, all real estate, all real estate with a little bit of retirement, like, um,

I had my old 401k that I had put in when I was working that W-2 job. And then I had a Roth IRA that I would max out every year. But yeah, so just kind of getting heavy and

seeing what my options are for other investments outside of real estate. I think there's a lot going on in 2025 and you know, there's people who are sitting on the sidelines who are fearful to get started. There are people who are in, who are fearful to keep moving forward. But I think if there's one takeaway from all the rookies that are listening to this episode, it's that the ups and downs in real estate are to be expected.

There's no industry that goes up forever. There's always ups, there's always down, but when you zoom out,

and you look at a macro scale, the trend line still goes up. Even if there's up and downs in the short run, there's always an upward trend when you look at real estate investing. So the goal of this episode was to share what Ash and I are seeing, what we're doing differently, and how we're making some pivots within our business. And hope is you guys can take some insights from this. Or at least just know that you're not in it by yourselves, right? That we're also experiencing a lot of the same challenges or asking the same questions that you are. And we also change our mind. We pivot. We...

We question things, you know. Think emotionally. Yeah. Well, thank you guys so much for listening today. I'm Ashley. He's Tony. And we'll see you guys on the next episode of Real Estate Rookie.

If you're sitting on the sidelines wondering what your next real estate move should be, you're not alone. But you can get unstuck, and BP Con 2025 is where investors go to do just that. It's the biggest real estate investing conference in the country, and it's powered by the amazing BiggerPockets community. It's three days, 50-plus speakers, thousands of investors who actually get it and know what's going on.

There's no hype, there's no sales pitches, just real strategies from people doing deals in this market, not the one from three years ago. It's all happening October 5th through 7th in Las Vegas. And here's the kicker. When you buy your ticket now, you'll get access to a free $300 expert-led workshop only available through June 15th. So don't wait. Go to biggerpockets.com slash Vegas and grab your ticket. That's biggerpockets.com slash Vegas.