Your real estate investment’s returns could be ruined by a few hidden costs that you don’t know about. For the rookie real estate investor, it seems like every investment has the same type of expenses; mortgage, taxes, insurance, repairs, and property management. And while these surface-level expenses are almost always present in a real estate deal, NUMEROUS extra expenses could sink your ship if you don’t include them in your deal analysis. So, stick around, or you might get burnt on your next real estate deal!

To walk us through the different types of deals and the expenses that come with them, we’ve got Henry Washington, James Dainard, and Kathy Fettke on the show. Henry, a buy and hold investor, knows that the “cash flow” new investors are calculating is far from reality. He highlights the exact expenses it takes to run a rental property portfolio and why those counting on self-management could be making a MASSIVE mistake. Next, James talks about the often over-glamorized world of flipping houses and the massive haircut investors take when they don’t account for closing, construction, and tricky lending fees.

Finally, for our passive investor, Kathy goes into the world of real estate syndications, defining the numerous fees many “mailbox money” investors overlook. In fact, investors in these passive deals often don’t know when (or how) they’re getting paid. You DO NOT want to make this mistake! Stick around to hear it all, so you don’t make these beginner blunders next time you get a deal done!

In This Episode We Cover

The “hidden” fix and flip, buy and hold, and real estate syndication costs

Lending fees, penalties, and the BIG cost of borrowing money

Seller concessions and what to expect in a buyer's market like 2023

Raising rent and why not doing so could be a huge mistake when building a portfolio

Self-management vs. third-party property management and why you ALWAYS need to factor in a fee

Real estate syndication payments explained and why so many investors get it wrong

The “4-4-4” housing market prediction and whether it could really come true

And So Much More!

Links from the Show

Find an Investor-Friendly Real Estate Agent

BiggerPockets Forums

BiggerPockets Agent

BiggerPockets Bootcamps

Join BiggerPockets for FREE

On The Market

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Subscribe to The “On The Market” YouTube Channel

Dave’s BiggerPockets Profile

Dave’s Instagram

Henry's BiggerPockets Profile

Henry's Instagram

James's BiggerPockets Profile

James' Instagram

Kathy's BiggerPockets Profle

Kathy's Insatgram

Books Mentioned in the Show

The Book on Estimating Rehab Costs by J Scott

The Book on Managing Rental Properties by Brandon and Heather Turner

The Hands-Off Investor by Brian Burke

Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-79

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79: The Hidden Housing Costs Almost Every New Investor Overlooks 45:50 Share

On The Market

Shownotes Transcript

79: The Hidden Housing Costs Almost Every New Investor Overlooks