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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