When’s the Right Time to Start Investing? (Age, Money, Lifestyle)

When is the right time to invest in real estate? We’ve all asked ourselves this, and if you’ve been thinking about buying rentals, you probably have, too. Whether you’re 20 or 50, have a little money or a lot, that first real estate deal can seem so...scary. You’ve never done this before, and things can (and will) go wrong, so how do you know you’re ready? Have you read enough books, saved enough for emergencies, or looked at enough houses? We’ve got three investors who all started in different positions to help get you an answer. Dave started investing right after college when he was waiting tables and had barely any money in the bank. Henry began to invest well into his working career, but with a family to take care of in the near future, he had to invest differently. On the other hand, Jonathan Greene was born into real estate, with an investor father who taught him the ropes from childhood. Each expert started from a different place, but they all agree on when it makes sense to invest. How much money do you need to make? How much free time should you set aside? What should your bank account look like? Do you need to know how to renovate and repair? Each investor will share where they think you should be to successfully invest in real estate. Good news—you might already be there! In This Episode We Cover The right age to invest in real estate (and can you ever be too young/old?) How much money you should have in case your first deal goes wrong Growing your confidence to buy and how many houses you should view before bidding The time it takes to invest in real estate on the side (do you have the schedule for it?) Financial signs that you’re NOT ready to buy a rental (and how to fix your finances) Is it too late to invest with high home prices and interest rates? And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/real-estate-1124 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[email protected]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Dave Meyer?

  When is the right time to start investing in real estate? Are you too young? Are you too old? Do you have enough money? Did you already miss the market timing and all the good deals are gone? I totally get it. Investing in a rental property is a huge decision for your financial future, but also for your lifestyle. You want to make sure you're in the right place, not just from a financial perspective, but for all those other factors in your life as well. Today, we're talking about this with two other expert investors.

• 0:33Dave Meyer?

  What's up, everyone? I'm Dave Meyer, head of real estate investing at BiggerPockets, and I've been buying rental properties for more than 15 years. Today on the show, we're talking about when to invest in real estate. We're going to get into when is the best age to start? When you have enough money in the bank to take down your first property? How your lifestyle at different points might affect whether you want to start investing? And if there are times in the economic cycle that are better to dive in? And whether or not there's times that you should probably hold out? So for this conversation, I've brought in two great investors who have wrestled with all of these questions themselves. We've got Henry Washington here.

• 1:14Henry Washington?

  Hey, what's up, buddy? Glad to be here. Thank you.

• 1:16Dave Meyer?

  And we also have Jonathan Green, who's been on the show several times. He's an agent and investor based in New Jersey. He's been one of the most prolific posters in BiggerPockets forums history. And he also hosts his own podcast, Zen and the Art of Real Estate Investing. Jonathan, thanks for joining us.

• 1:35Speaker 02

  Thanks, Dave. Henry, good to be with you guys.

• 1:37Dave Meyer?

  Let's start our conversation about when to invest and talking about age and like what the right time to invest is because it seems like every social media influencer is like 18 years old now. And everyone's talking about how you have to do it immediately out of like middle school.

• 1:53Henry Washington?

  Property bros.

• 1:54Dave Meyer?

  Yeah, exactly. So Jonathan, you were, you sort of like grew up in real estate, right? I remember that about your story. So do you recommend to people starting as soon as they can?

• 2:06Speaker 02

  I think it depends what type of mentorship you have. You know, I was fortunate because my dad literally would not stop talking about real estate from the time I was a baby on like, it was just real estate money, real estate money, dirty joke, real estate money, real estate money. So that was fortunate.

• 2:21Henry Washington?

  Wait, was I your dad?

• 2:23Speaker 02

  Maybe. I mean, this show's going off of the rails. But I mean, like, you know, you can't fault people for not investing at 18 if they don't have the right background, because then I think they will look for that, you know, TikTok influencer instead. So I think it's really about when you feel confident and how you get to that confidence level. And a lot of that is who you surround yourself with, not just what you watch, because what you watch is one thing, but then what makes you take action is another.

• 2:53Dave Meyer?

  Yeah, that's, that's very good advice and you are lucky. I, I, I think very few people have that, but be able to get all that inspiration and advice about real estate while hearing dirty jokes. I mean, it just sounds like the absolute ideal childhood.

• 3:08Speaker 02

  I mean, Henry is, Henry is a great dad.

• 3:14Dave Meyer?

  Well, Henry, you, you know, despite raising Jonathan, you, you started a little bit later in your life, right? But not that late.

• 3:23Henry Washington?

  Yeah, 37, I believe.

• 3:25Dave Meyer?

  Do you think when you started was ideal or do you think there is a better time?

• 3:30Henry Washington?

  When I started was ideal for me because I think investing, you need to have a certain level of maturity, right? Because it, I mean, it's a big, it's a big deal and I think you can start young, but I think the question is less about age and more about financial stability or financial readiness. I don't think you're anybody, I don't think any college student, unless their parents are giving them money, is financially stable. But some are more ready than others to invest because some may have some amount of savings. Some may be from a family who's going to help them, you know, buy that first property, right? Everybody's financial position and situation is different. Do I wish I would have bought a duplex and house hacked as a college student? Heck, yeah.

• 4:14Dave Meyer?

  Yeah.

• 4:14Henry Washington?

  Of course. But was I in a position to do that when I was in college? I probably wasn't. If you can start young, you should, but I think you have to look long and hard about what does can and ready mean for you? Like, you've already got to go to school, which is hard enough. You don't want to put yourself into A position where you're defaulting on a property because you, you know, it didn't go like you thought. You're not renting out the unit. You're not getting the rent you thought. Your tenants are destroying your place and you're trying to cover this expensive mortgage and go to school. Like it can, it's, if it goes well, it's great, but it cannot go well. And are you prepared for that?

• 4:50Dave Meyer?

  That's a really good way of putting it. I, I think of course, everyone's gonna say, yeah, just invest as early as possible because the benefit of compounding is real. But also the younger you invest, the odds of you messing up, I think are actually a bit higher.

• 5:06Henry Washington?

  Yeah, I was stupid. I should not have.

• 5:10Henry Washington?

  I should never have owned a property at that time. So, yeah.

• 5:13Speaker 02

  But I think Henry made a good point about maturity because even if you're financially ready, if you're immature, you're not going to do well with the money. So it's not just about what you know about real estate. It's what you know about money. And if you're self-aware of what you're going to do with your money.

• 5:28Dave Meyer?

  Do you think that maturity then requires Jonathan some amount of financial literacy and education before actually pulling the trigger?

• 5:35Speaker 02

  For sure. I mean, you know, we always talk about real estate, but money is really the sidecar to what moves it. We need the money to get there. So if you look at kind of more like what we were saying in the beginning, what, what you, we see on social media and more fire movement. It's like trying to get people to go quicker, but you want to build a foundation. If you don't have a foundation, you're just a house of cards. And that's why so many people crumble and give up. I find that the people who have become successful over time were ready. Like Henry said, it doesn't matter if they were 20, 30, they built enough runway so that they knew, hey, I can do this. And if it doesn't go well, I'm going to be okay. I think that's what's really important. Like, because there's inherent some risk in all real estate.

• 6:17Speaker 02

  You know, we're lucky to live in America where most things are going to appreciate, but you can make bad buys. But as long as you know, if this doesn't go well, I'm not going to collapse my life and go bankrupt and ruin my finances for seven years. I think that's hugely important.

• 6:31Dave Meyer?

  I'm so glad you said that because a lot of people I feel get caught up in this idea of risk tolerance. And they're like, oh, I'm comfortable gambling. I'm comfortable taking risks. I'm in.

• 6:41Henry Washington?

  Until they get punched in the mouth.

• 6:44Dave Meyer?

  There's a difference between risk tolerance and what I think Jonathan's talking about, which is what I would call risk capacity, which is like, are you in a position to be able to weather the storm that's appropriate to your risk? And for a lot of people, you know, that means having maybe a stable job. That's something I cared about before I started making an investment, or having an emergency fund, or, you know, if you have a significant other who has a stable job and healthcare and benefits. Like, those are the types of things that allow you to take risk to go out there. I think about my own self, my own risk capacity. I started when I was, I guess, 23. And like, I just, I had risk capacity because I had nothing to lose. I had nothing, you know? And so like, I do

• 7:29Dave Meyer?

  think there's something to that, that like, my time was worth nothing. It was either playing video games, or like, go out and invest in real estate. Because like, I wasn't giving anything up, you know, by doing it. And so I think there is some element of that, like, when you are really young, that you have less to wager, in a way where you can just kind of hustle. But I think for, you know, if you're starting, you know, a little bit later, if you have a family or significant other, you really do need to put those other things in place before you start just investing.

• 8:01Henry Washington?

  You read my mind, because I was gonna go to that same place. But I think being more mature, or, and having something to lose, or something to mess up, should force you to be more cautious. And I remember when I started investing, with my limited knowledge of investing, I still made sure that what I was buying, like, if I had to get out of it, I could get out of it and even make money. I wasn't gonna buy something that I felt like I couldn't just get myself out of that situation, because I had too much at stake. And it forced me to research to the point where I felt comfortable enough. And had I not had something to lose, I probably would have just jumped off the cliff and bought something and, you know, who knows?

• 8:43Dave Meyer?

  Yeah.

• 8:43Speaker 02

  Yeah. I think, I think a lot of people, especially now with technology being so prevalent, they're suffering from not getting enough reps, so they don't really have the confidence. So when they get the FOMO, they just transact. But like, you know, like someone that says, oh, I looked at 10 properties this week and I asked, well, how many did you actually look at? And they say zero. It's like, you just don't have the experience to be buying. I, of course, was over fortunate, walked hundreds and hundreds of properties before I was even 18. That's lucky for me. I don't think people can accumulate that number of looks. But you need to get a lot of looks so you can really feel more comfortable with knowing what's in a basement or understanding what's in an attic. We're saying like risk tolerance and risk adjustment, but it really comes from how much you know

• 9:27Speaker 02

  and who you're working with. If you work with a baby agent and you don't know a lot, you know, how protected are you? You know, you go in because look, real estate agents are great. I am one. We all know a million of them. But your regular real estate agent isn't savvy with investors. So they don't really understand what a new house hacker is doing. But the ones that do can really help work together and teach along the way. And I think, you know, both of those are important to going and picking the right time, like you guys were saying.

• 9:54Dave Meyer?

  Hey, so I know people say real estate investing is passive, but let's get real. Chasing rents, drowning in receipts and getting buried in spreadsheets feels anything but passive. If you're tired of losing all your valuable hours on financial busy work, I found a solution that will transform your business. It's Baseline, a trusted BiggerPockets Pro partner. Baseline is an all in one platform that can help you automate the day to day. It automates your rent collection and uses AI powered bookkeeping to auto-tag transactions for instant cash flow visibility and reporting. Plus they have tons of other features like recurring payments, multi-user access, and free wires to save you more time and money.

• 10:36Dave Meyer?

  Spend less time managing your money and more time growing your portfolio. Ready to automate the busy work and get back to investing? Baseline is giving BiggerPockets listeners an exclusive $100 bonus when you sign up at baseline.com/bp. The other thing I think Jonathan sort of that you had mentioned earlier, it's just like seeing these people on Instagram is what I would think a false sense of confidence. People go out And they're talking about, oh, I just bought this deal and they're, you know, showing off all these amazing parts of their lifestyle. I think a healthy fear of the investments that you make is super important. I'm scared every deal I do.

• 11:16Henry Washington?

  I still get scared when I put a property.

• 11:18Dave Meyer?

  Every time, right?

• 11:19Henry Washington?

  Yes, every time.

• 11:20Dave Meyer?

  Why did I do that? Like, I'm so excited that day and then the next morning I'm like, what did I do?

• 11:26Henry Washington?

  Yes. I literally had a deal earlier in the year where I made the offer and the lady said yes, and I went.

• 11:35Speaker 02

  But your experience, so the thing though, the thing with the brand new person who doesn't have the reps, when they get that, oh man, feeling like they should get it because they start going through every scenario. Did I bid too much? We know we didn't bid too much. We know the values, but the new person immediate, that's why so many deals fail for new investors and then create havoc in the relationship with realtors because they really do, they get the oh moment, but they have no idea if maybe they are a hundred thousand too high. They don't, they just don't know because they're not advised and don't have the confidence.

• 12:06Henry Washington?

  I remember the first off market offer I made on a property and boy, I'm glad they said no.

• 12:13Dave Meyer?

  Yeah. You offered too high?

• 12:14Henry Washington?

  Way too much, way too much. My inexperience, it was way too far out of town. I offered way too much. And my inexperience, just it could have really bit me in the butt had they, well, had they said yes, I'm sure nobody would have gave me money for that deal because they'd have been like, no, we're not financing that.

• 12:31Dave Meyer?

  There's some checks and balances.

• 12:32Henry Washington?

  Inexperience will show itself, right? Like, so it truly does matter.

• 12:37Dave Meyer?

  I mean, I wonder what the right amount of reps is. Like, what is the right balance? If you had to come up with that, because I think what we're, what we're realizing here is that it's not about age. It's about coming up with the right balance of risk tolerance, you know, financial literacy and reps. Like Jonathan, do you have a rule of thumb or estimate for the audience of what they should expect?

• 13:00Speaker 02

  If you're buying single family, you know, I think you should see at least 20. Like, I would be no less than 20. Just because, you know, if you're in a basement area, that's where all the problems are, the foundation, walking the outside. You know, and people who are too new that they don't even want to get an agent, just go to open house on the dumps in the area. If you're looking to flip, you know, you there, no one's preventing you. Sure, you're going to get on a lot of Realtors lists, but that's why I think a lot of investors should have their license, not so they can transact and do their like represent themselves, because like you don't want as a lawyer to represent yourself, but just so you can go see every dump that comes on the market. It's so important to just be able, you know, Henry, you have a great agent, you can call them and say, hey, you know, let me see this, but a lot

• 13:42Speaker 02

  of people don't. So I think you got to use open houses, you know, because you can just, you could get like six on a weekend. That's six reps already. You're, you're ahead of like half the market.

• 13:51Dave Meyer?

  I was actually doing that this weekend. I was just going for reps to learn my new market. And I wanted to buy something because I just found something that was great, but I was not intending even to do that. I was just, I, I went from stuff that was 500 grand. I went to stuff that was 1.5 million. That was stabilized stuff that was in the worst possible shape. Some were ADU development opportunities. Just go see them and like, you'll get a sense of what makes sense to you. And I think like you get a feel for value and I don't know how else to describe that because comps are important, but like when you do it enough, you can feel what the value is and if you're getting a good deal or not.

• 14:29Henry Washington?

  Yeah, I would say I probably didn't feel comfortable walking a house on my own and estimating a rehab, probably for six months into me looking at houses. And that's still like a loose level of comfortability.

• 14:42Dave Meyer?

  I still can't do that. But I don't, I don't really flip. So I'm not like a rehab person.

• 14:47Speaker 02

  I can, but I still always think I'm missing something. So I think the, the more experience you get, like we're, you know, people like Henry, I like, we're putting in like, you know, there's overage. I know that I need like 15K for stuff behind the walls and stuff that's going to come and new people don't. And one thing we were talking about before that I think is important, like just having enough money, but it's also having enough knowledge to know, like, wait, I need reserves. There's so many people who are like, I can afford 200. So I'm going to spend 200. And then you're like, but wait, wait, you have to do repairs or you're buying a multifamily and you have tenants, you have to do upkeep, like reserves are the thing. So when people People say, oh, you know, I have a hundred to burn. You don't have a hundred minus 15%. Keep that for reserves and make sure that you're safe because that's what boxes people out.

• 15:31Speaker 02

  Like Henry said in the beginning, you're just, when you push yourself to the limit, you're just making it impossible for you to succeed.

• 15:37Dave Meyer?

  Well, we, we've talked a lot about when the right time to invest is about risk capacity. Now we've hit a little bit on financial literacy, getting your reps in. But I also want to talk about lifestyle because this is sort of a really important part of being a real estate investor is like, how it fits into your greater life and your family and your other aspirations and hobbies. We're going to get to that right after this quick break. We'll be right back. You know that thing where you discover a feature you wish your software had? And it turns out it already exists, just on a different platform. Like, oh, you want rent payments processed in two days. Rent Ready does it. Oh, you want to block tenants from making partial payments mid eviction?

• 16:22Dave Meyer?

  Rent Ready does that too. Oh, you want full accounting and tax ready reports without paying for a second tier? Rent Ready does it. And oh, you want tenant screening that doesn't overcharge your applicants? Rent Ready also does this. Basically, if you've ever complained out loud about your property management software, Rent Ready probably already built the fix. It's $12 a month. You're welcome. Sign up right now for $50 off your first year of Rent Ready with promo code BP CASH. BiggerPockets Pro members get it completely free. Sign in through your Pro account at rentready.com/biggerpockets. That's rent, R E D I dot com slash bigger pockets.

• 17:03Dave Meyer?

  Most deals don't fall apart because of the numbers. They fall apart because of the financing. You find a property that cash flows, the deal makes sense. But then the lender looks at your personal income, your tax returns, your debt to income ratio, and suddenly the deal doesn't qualify. That's the disconnect. Because as investors, we're not buying based on our W2. We're buying based on the asset. That's why Host Financial offers DSCR loans designed for real. Estate investors where qualification is based primarily on the property's income, not your personal finances. So no W2s, no tax returns and no DTI requirements.

• 17:44Dave Meyer?

  And with loan to value options up to 80 or even 85% on eligible deals, you can keep more capital available as you grow. If you're buying rentals, refinancing or scaling your portfolio, go to hostfinancial.com. That's H-O-S-T financial.com and see what you qualify for. A lot of insurance companies compete on one thing, speed. But if you're protecting an investment property worth hundreds of thousands of dollars, should speed really be the priority? Enreg believes strong coverage starts with understanding the property, the risks and the realities of ownership. That's why they don't rush the process. Their policies are designed for real world claims, not just quick quotes.

• 18:27Dave Meyer?

  If you want insurance built to protect your investment when it matters most, visit nreg.com/bpllc and learn more today. Buying real estate has a funny way of making the future feel very real. You start thinking about mortgages, cash flow, tenants, and suddenly you realize if something happened to me, would the people I love be okay? That's why life insurance is one of those things that's easy to put off, but is super important to actually deal with. Ethos makes getting life insurance fast and easy 100% online. You can get a quote in seconds, apply in minutes and potentially get same day coverage. There's no medical exam. You just answer a few simple health questions online.

• 19:09Dave Meyer?

  You can get up to $3 million in coverage and some policies are as low as $30 a month. Ethos helps provide financial security and helps protect the people who depend on you. Take 10 minutes to get covered today with life insurance through Ethos. Get your free quote at ethos.com/realestate. That's E-T-H-O-S.com/realestate. Application times may vary. Rates may vary.

• 19:38Dave Meyer?

  Welcome back to the BiggerPockets Podcast. I'm here with Henry Washington and Jonathan Green talking about when is the right time to invest. We've covered a lot of topics, but I want to move on to the idea of lifestyle because I personally think about this a lot and like how I want to scale my investing and when I choose to do deals because I'm not full-time doing this is a lot based on my lifestyle. Like what else is going on with me personally and my career at BiggerPockets, other aspirations and hobbies I have. Jonathan, you grew up with this. Like have you had to fit real estate into your life or has it just always been sort of part of your life? So that's not as much of a consideration for you?

• 20:18Speaker 02

  It was, but because my dad was an attorney and I started as an attorney, I never thought of myself as a real estate investor. I just was someone who was being smart with money. Like a lot of old schoolers that I've talked to, it was just, I've always wanted to have multiple streams of income. That's why I invested in stocks. I just like to have things that produce. But I think as I got older, I realized, wait a minute, if I want to do a flip, I'm signing up for a second job. You know, do I have the time when I'm working 100 hours for the government to sign up for another job? The answer is no. So I flipped much slowly and I've never been a high-volume flipper because I never was really full-time in just investing. And I think that's, again, what's important for people to say. You're saying, I mean, what time does it take?

• 21:01Speaker 02

  If you want to be an investor, you have another job. And then you, do you have a family? You know, is your family going to be mad? Do you want to be spending Saturday and Sunday unclogging toilets? I don't, I wanted to be with my kids. So I think it's really, you know, choosing lifestyle is about your family, how you want to live and all of that.

• 21:17Henry Washington?

  Well, you're supposed to get your kids to unclog the toilets.

• 21:20Speaker 02

  I mean, when they're five, you gotta bribe them with like a big, that's, I got bribed. My dad was smart. He bribed me with a video game. If you come pick up the rent, you know, we'll get a video game. I'm like, okay.

• 21:30Henry Washington?

  Sold.

• 21:31Speaker 02

  Yeah.

• 21:31Dave Meyer?

  Deal.

• 21:31Speaker 02

  Done.

• 21:32Dave Meyer?

  Absolutely.

• 21:33Speaker 02

  And he always came through. So I mean, but that is a good way to teach though along the way.

• 21:37Dave Meyer?

  Yeah, that's interesting. Henry, did you have kids when you first started?

• 21:41Speaker 02

  No, no, I did not.

• 21:42Dave Meyer?

  Okay. So do you think that made it a little easier?

• 21:44Speaker 02

  Yeah, it was, it was easier.

• 21:46Henry Washington?

  Before I got started, only because there was, you know, less considerations I would need to make. I was married when I got started, but my wife's been all in, you know, since day one. And so it was, it was much easier. I think what really changed when I had kids was my wife's level of involvement. You know, we, she used to go with me to look at houses and make offers. And now there's probably some family thing that she has to do with the kids if I'm doing that. And so that's changed. Like you do have to adapt your lifestyle to what you're doing. You know, I went all in from day one. Like I really took on the identity of a real estate investor from beginning. I put a lot of weight on becoming a successful real estate investor.

• 22:27Henry Washington?

  Because I didn't, I didn't want to have a plan B. Like I just wanted to figure out how this worked. And I had a flexible enough lifestyle. I learned how to fit in the work that I needed to do. I think a lot of new investors get scared because they think, okay, well, how am I going to find the time to do this? Which is what I thought too. But once I actually started to market for deals off market, answer the calls, go on the appointments, and I was even managing my own properties. I quickly realized like what activities actually took chunks of time? And then where I could fit those activities in during my day. And the rest of the things I realized, I could probably just have a spreadsheet or some sort of processor system to take care of.

• 23:13Henry Washington?

  So yeah, you're probably going to be underwater at first. But then you realize, I quickly realized, I'm like, okay, this doesn't take a ton of time. I spend most of my time either analyzing the deals when they come in, going to the appointments and making the offers, and then selecting tenants. Like those are the time consuming activities. So I would figure out when I could do those things. I would either do them at my lunch break during my day job, right after work, like on my way home from work is when I would go on appointments. That way, when I got home, I could just be with my wife. And if I couldn't fit it into those timeframes, then I probably wouldn't see that house or do that thing. Like that was the time boundaries I had to make.

• 23:50Dave Meyer?

  Yeah, that makes a lot of sense. And I think that's the whole key, right? You can really invest. With almost any amount of time, when you're first getting started, you probably need a little bit more time, but you could just adjust your strategy and what you're trying to do based on your own time commitment. In the past, my rule has been like 20 hours a month for real estate. And that's all I want to commit because I've been mostly a passive investor. I'm interested in trying to do some more active things. So I'm like consciously changing that, but I do really think about that all the time that like, here's my priorities in life. Like I, you know, my relationships with friends, family, my wife, you know, I have hobbies that I want to, I have a full-time job. So like, what amount of time can I give to this and sort of crafting

• 24:34Dave Meyer?

  the strategy? It's probably five to 10 hours a week, I would say, like when you're first getting started is like a good rule of thumb. And if you can't do that, like it's maybe not the right time for you to at least get started. And if you want to scale down, you do that enough to get your first deal. I think then that's possible, but you do need, I think, five to 10 hours a week is a good idea.

• 24:56Speaker 02

  Yeah, I agree. I mean, it's, it's really about how you prioritize the things and realizing that you can't outsource your top priorities. There's a lot of things you can outsource over time, but in the beginning, you can't outsource someone to learn for you or get reps for you, or rely on everybody to do everything for you, because that, that just makes you a bad investment. You're, you're a passive participant in an active asset, which is a disaster.

• 25:20Henry Washington?

  Can I ask a, a quick question?

• 25:22Dave Meyer?

  Please.

• 25:23Henry Washington?

  Because oftentimes when I hear, you know, when is a good time to invest? People are typically asking me because they're trying to figure out like, when they should invest from like a financial readiness position. Some people feel like they need to pay down all of their debt before they invest. Some people feel like they need to have a certain credit score before they invest. Like, I have an opinion about paying down debt and credit and things, but like, what, what do you guys think in terms of like financial readiness?

• 25:52Speaker 02

  The problem is, I think if you're not by the numbers financially ready, you're likely to get into a rabbit hole of, you know, buy with no money down, which of course is possible, you know, or getting into sub two. Both are great options, but also not that Realistic for someone who doesn't have experience. So you could spend a lot of time doing that. You know, I think it's important to have your credit as high as possible, but that's why you go to a lender early on in the process when you're looking and say, how do I look? You know, what is my student loan that like, what's my DTI like? You know, how's everything looking? And then get an overview to see, well, if I have to put forty percent down because things don't look good, that's just not going to work for me now. And if you, if you overthink it before you even talk to a lender to know where you qualify,

• 26:35Speaker 02

  you may be spending all this time when you're, you know, a year and a half from being ready.

• 26:39Dave Meyer?

  Actually, I wrote about this in one of my books. I can't even remember, but I think it's start with strategy about this exact idea, Henry, because I think a lot of people say, you know, I have a negative net worth, you know, I have more debt than assets. And honestly, I think that's where most people start. I don't think that's necessarily a bad thing.

• 26:58Speaker 02

  That's where I started.

• 26:59Dave Meyer?

  Like I had student loans when I first started and I actually, I didn't pay off my student loans till like eight years into my investing career, I think, because like.

• 27:08Speaker 02

  I'd paid mine off like six months ago.

• 27:10Dave Meyer?

  Oh, yeah, I remember that. Yes, right?

• 27:13Speaker 02

  Yes.

• 27:13Dave Meyer?

  Because like I was earning more money in interest in my investments than it would to pay off. So that, that is one calculation you could do. It's like, if you have a hundred, let's just say a hundred grand in student debt. Like if you're going to put that towards your, you know, four or five percent student loan, that's fine. But if you can earn eight or nine percent on rental property on that, invest and earn the eight or nine percent and then, you know, pay off the minimum amount. So that's one thing. The other part of it though is like negative net worth is fine. Negative savings rate is not fine. I, I think like if you're in a point where you are spending more than you are earning, you have building blocks of financial literacy and responsibility to work on.

• 27:52Speaker 02

  Yeah.

• 27:53Dave Meyer?

  And I understand that people get into that period sometimes to no fault of their own. Sometimes you make a mistake. Who knows? But if you're in that situation, you're not in a good place to invest. I, I don't believe, I, I think you need to fix that first because otherwise you're just compounding your risk and it's just not worth it.

• 28:11Speaker 02

  If you don't have an emergency fund for your own life, you definitely shouldn't be trying to invest in that.

• 28:16Henry Washington?

  Having an emergency fund for your real estate.

• 28:18Dave Meyer?

  Right, exactly.

• 28:19Speaker 02

  Yeah, because they'll both call due at the same time.

• 28:23Speaker 02

  Murphy's Law.

• 28:24Dave Meyer?

  Yeah, yeah, right. Yeah. And like, I don't know, sometimes when I first bought a property, I put aside some money for maintenance and, you know, maybe something breaks, you just get bad luck and then you have to tip into your personal finances. You got to bring a little bit more money to the table. And I'm not saying like huge amounts, but like if you didn't have that and your, your personal finances are sort of, you know, walking a tightrope here, paper thin, it's just too much risk. It's not worth it.

• 28:52Henry Washington?

  If you're in a position, this is what I tell, because what I find is people use this as an excuse because they're scared to start.

• 28:59Dave Meyer?

  Yeah.

• 28:59Henry Washington?

  Most people know that they're ready and they're making excuses. But I would say, look, if you are struggling to pay your own bills and you're struggling to make ends meet, you probably shouldn't go borrow money to buy property. But if you've got an emergency fund, you've got some money in savings and you've got a semi decent credit score, even if you've got other debt that you're working on, I would just do that calculation. Dave talked about like high interest debt. Yeah, work on paying that off first. If you've got something that, you know, 15 to 30% interest, pay that sucker off before you go investing. But if you've got, you know, normal debt, uh, single digit debt,

• 29:43Henry Washington?

  then I would look at what's my typical cash on cash return for a real estate investment? And if that cash on cash return for the investment is higher than the debt you have, go invest and use that money to pay off your debt. Arbitrage that debt, baby.

• 29:55Speaker 02

  Exactly. That's, that's potentially the way out when you don't have a lot of money is to get something that earns more slowly. But we were, you know, we've been talking a lot about compound interest and the compound effect. The negative part of that works real well against you when you do it. If you don't do that first fix, because you don't have 7,500 for the plumbing issue, now it's a $15,000 issue. Oh, wait, now, now your HVAC broke. You can't get out of it. So just as we, you know, say, real estate can be great for compounding forward. It can go backward real, real quick. So can your finances.

• 30:27Henry Washington?

  I often tell the story of the best credit repair hack I ever heard. Cause when I first got started, a lot of people don't know this. I didn't have great credit and I worked with a credit repair company to try to help me get my credit back. And they were like, you know what you could do to get your score where it needs to be? You could pay off some of this crap.

• 30:47Dave Meyer?

  What a hack.

• 30:48Henry Washington?

  What a hack. Worked like a charm. That's the first thing I had to do is I had to pay off this outstanding debt that I had. Funny enough, the outstanding debt that I had to pay was a debt that an old landlord had put on me.

• 30:59Dave Meyer?

  Oh, really? That is a full circle moment.

• 31:04Dave Meyer?

  That's really appropriate. Well, this has been a great conversation to sort of the lifestyle side of it. And Henry, thank you for raising that question about financial preparedness. So we've really covered it all, but there's one more topic we cannot get away from. We're talking about when to invest and everyone wants to talk about timing the market. Is it a good time to invest? We're going to hit that right after this quick break. For my wife's birthday, I wanted to make her a new website for her landscape design business. So I researched a lot of different options. I tried out a couple, but honestly, it was really overwhelming. It was pretty time consuming and still the site wasn't coming out the way I wanted it to. Then I tried Hostinger and everything was super

• 31:47Dave Meyer?

  simple. I asked Hostinger's AI to build a clean site for her business and it had a working version up in minutes. No coding or designer needed. Plus, its AI agent helps with SEO, website copy, and email marketing after launch. You get domain, website, email, all in one account. And right now you can get Black Friday and Cyber Monday pricing through December 14th. So snag Hostinger's services at their lowest prices before the sale ends. Create your website today for just $1.99. Go to hostinger.com/realestate and use code REALESTATE for an additional 10% off Black Friday and Cyber Monday pricing. I just booked a ski trip to Park City and I've already got the whole thing planned

• 32:32Dave Meyer?

  out. Five days, first tracks every morning before the crowds show up, my knees reminding me I'm not 25 anymore by the second run, and an embarrassing number of overpriced burritos at the lodge. I don't even care. This is the trip I look forward to all year. But here's the part I actually appreciate. The practical side of my brain kicking in is that my place Doesn't have to just sit there empty the whole time I'm away. I can list my space on Airbnb and bring in a little extra income while I'm out getting humbled on a mountain. And with the co-host network, I'm not the one handling all of it. You can partner with a vetted local co-host who can create your listing, manage reservations,

• 33:15Dave Meyer?

  message guests, and even handle the styling. So I get to fully focus on my trip and my place is still working for me the whole time. Find a co-host at Airbnb.com/host. Investing in real estate has always been smart, but it hasn't always been simple. Now it's both, thanks to the Fundrise Flagship Fund. The Fundrise Flagship Fund launched more than five years ago with a mission of delivering low-fee access to blue-chip private market real estate. Today, the Fundrise Flagship Fund has grown to manage more than $1 billion of real estate on behalf of hundreds of thousands of investors, making it one of the largest funds of its kind. For those who believe real estate

• 33:56Dave Meyer?

  has an important role to play in their portfolio strategy, the Fundrise Flagship Fund has positioned itself as both a simple and a smart option. Whether you're starting with $10 or $10,000, the Fundrise Flagship Fund makes adding real estate's unique potential for both passive income and consistent growth. Just visit fundrise.com/pockets to make your first investment today. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the fund's prospectus at fundrise.com/flagship. This is a paid advertisement.

• 34:34Henry Washington?

  Buy smart, drive for less, and trade for more. That's Toyota affordability. And it all starts with a great deal from your local Toyota dealer. Make a smart buy on an all-wheel-drive Camry, Corolla Cross, or get a Corolla sedan packed with the latest features, advanced tech, and head-turning style. Take a test drive in two of Toyota's most popular SUVs, the spacious, family-friendly Grand Highlander and adventure-ready RAV4. And with so many hybrid and plug-in hybrid models available across the lineup, plus efficient all-electrics like the BZ, BZ Woodland and all wheel drive CHR, you can drive your way and skip the pump. And long after you leave the lot, your Toyota keeps delivering with legendary resale value built on a reputation for quality and reliability.

• 35:19Henry Washington?

  So when it's time for your next Toyota, you could trade in for more from a great deal today to a great value tomorrow. A Toyota is right for you. Shop toyota.com for deals and details or stop by your local Toyota dealer today. Toyota, let's go places. BiggerPockets Real Estate is brought to you by MOD. MOD prescribes a once or twice daily modophonal drink that can keep you energized, focused and alert throughout the day. Here's the mechanism. Energy drinks with caffeine temporarily block eudenecein, the chemical that makes you tired. It builds up and when the caffeine wears off, it all crashes down on you at once. Modafinil works differently. It engages multiple pathways in your brain, dopamine, norepinephrine, histamine and orexin

• 36:02Henry Washington?

  to achieve steady energy and alertness for 10 to 12 hours. Modafinil was invented in the 1970s and since it's been used in the highest performers on the planet, soldiers, pilots and astronauts aboard the space station use modafinil in high stakes situations where full concentration and alertness are paramount. It's now available at mod.com to qualifying patients. Visit mod.com, that's M O D dot com for free consultation and get 10% off your first order plus free shipping with promo code B P R E. That's promo code B P R E at mod.com. See their website for important safety information and we thank MOD for sponsoring the pod.

• 36:47Dave Meyer?

  Welcome back to the BiggerPockets Podcast here with Jonathan Green and Henry Washington, talking about when is the ideal time to invest? We've talked about all of the financial and lifestyle elements. Now let's talk about sort of the timing of the market and if there's a good time. If does that even exist in real estate?

• 37:06Henry Washington?

  This, if you've stuck around till the end, boy, are you in for a treat because the Data Deli himself, the man who looks at real estate numbers for a living is going Going to tell us exactly when we should jump in this market because he has it timed perfectly.

• 37:22Dave Meyer?

  June 24.

• 37:24Speaker 02

  Mark it on your calendar.

• 37:26Henry Washington?

  February 31.

• 37:32Dave Meyer?

  Oh my God. No, I, I, please don't take that seriously, anyone.

• 37:38Dave Meyer?

  Particular number. I never know. But no, I actually, I made a social media post about this yesterday because I was just thinking about all of the objections, either friends or family or people I've heard about buying real estate since I started 15 years ago. And it was like, in 2010, I was like, oh my God, the market is literally crashing and it was, and it was still a good time to buy. In 2013, people were like, oh, it's, it's bottomed out or like prices have been down for four or five years. Like is now a good time to buy? Then as soon as prices started going up, people were already calling for another crash. Then in 2018, interest rates were going up and people were calling for another crash. Then we had COVID, then we had this rate height cycle.

• 38:18Dave Meyer?

  And it just feels like to a certain subset of people, it's never the right time. And then to be fair, on the other side, there are people who are like overly confident and say that it's always a great time to buy real estate. And so, Jonathan, let's start with you. Like, how do you, how do you think about market timing?

• 38:34Speaker 02

  Well, I, I don't, I think you should always be looking, but I don't think that means that the deals are there. You know, you have to, again, that goes back to us talking about reps. To me, I'm always looking and I'm looking at different assets and I'm trying to figure out what I like. And I never stop looking because I love real estate. But I think it goes into, yeah, when somebody says to me, oh, you know, I'm concerned the rates, you know, the rates are high. I'm like, oh, okay. Well, when do you think they're going to come down? What crystal ball do you have that I don't have? Because you may think they're going to come down in six months and they may not come down. And historically, rates are fine. So it's just like, you know, like, where are we in the cycle? And of course, then you have seller finance where you can adjust, you can, you know, play terms versus price.

• 39:15Speaker 02

  And there's so many different things in real estate. So I think that most people, as Henry was saying before, just use it because they're stuck and they're scared to do it. Because if you're just going on. You know, we've had lots of people that are like, oh, well, you know, the lender said it's going to be 6.5 and I'm only going to do it with 6.25. And you're like, you know how much it's going to cost you a month over 30 years? It's like $11. Relax.

• 39:38Henry Washington?

  You're right.

• 39:39Speaker 02

  But they, but that's an excuse mechanism for not having enough confidence and not understanding.

• 39:43Dave Meyer?

  That's true.

• 39:44Speaker 02

  What's a good deal? And this doesn't really matter. If it's a great deal, you know, I never, I don't, I just call my lender when I'm ready. What's the rate? Great. Let's go.

• 39:53Henry Washington?

  Awesome.

• 39:53Speaker 02

  Yeah.

• 39:54Henry Washington?

  Right.

• 39:54Speaker 02

  Because I know it's in, you know, it's not like I'm going to be surprised and it's six points higher. It's just, the deal's good. I like the asset and I'm an asset hunter. So.

• 40:02Dave Meyer?

  Yeah, I think that makes a lot of sense. The whole game of being an investor is just resource allocation. Like it's not, I, I think the whole thing is like, compared to what, right? People are like, I'm not going to invest in real estate. Okay, fine. What are you going to do with your money? Is it a better option or a worse option? Like that, that's, it sounds overly simplistic, but that's it, right? Is it better to keep your money in cash? Sometimes it is. Like, you know, sometimes it's not. And but I totally agree with the sentiment of always be looking.

• 40:30Henry Washington?

  Yeah, man. Two best times to buy a property are yesterday and today, right? Like historically, can you look back and say, yeah, that was a bad time to buy a property? Yeah, like, you know, 2000 and early 2008, like late 2007. Sure. Some people are like, yeah, probably shouldn't have bought then. But like you, no one could time that. And for people like us who are deal hunters, right? Like I'm buying typically at a bigger discount than a traditional market crash would indicate.

• 41:01Dave Meyer?

  Yeah.

• 41:01Henry Washington?

  Like if the market drops 20 to 30%, I typically buy at between 40 and 60 cents on the dollar, which means even if the market comes down 20%, I should still be right side up, right? Because we're looking for deals, you know? In this particular sense, we're not talking about the normal family going to buy their home to live in. And even if it's that, if you're a normal family buying your home to live in, you're just stay there a little longer and the market will rebound.

• 41:29Dave Meyer?

  Exactly.

• 41:30Henry Washington?

  Like, yeah, it's not that big of a deal.

• 41:32Dave Meyer?

  Yeah, I totally agree with you. I mean, it's kind of some of the. Considerations that I've been thinking about in my own portfolio recently is like, yeah, right now I'm probably going to make more conservative investments than I would have, you know, a couple of years ago. I'm not going to take as big swings because you can't count on that. Just, you know, it was like 3% appreciation a month, but what

• 41:56Dave Meyer?

  it's not that, but like, I still think real estate is just a better place to put my money than in cash right now. I had been very open on this podcast. I have some fear about stock valuations right now. And so I think, you know, real estate is a good place to put your money. And honestly, something that drives me kind of nuts is people comparing returns between now and a previous period. It is totally irrelevant. It couldn't matter less. What matters is what you could do with your money now versus other asset classes. Like, that's the only calculation that matters. And to me, real estate is still an important, a very, the primarily important part of that for my portfolio. I put money elsewhere, but like, it is still, to me, the thing that makes sense.

• 42:39Speaker 02

  Yeah, I mean, just, just, it's just a value add aspect. You know, you can't value add a stock. You have no input on a stock. You know, you can't fix it up and you can't just let a stock sit there and it will just improve in value because

• 42:50Henry Washington?

  I bet some people wish they could right now.

• 42:51Speaker 02

  Right. I mean, like, what if the CEO does something crazy and then it goes down? Or somebody just says something in the news and a stock goes down and it's not even real. Real estate, nothing happens. It just goes up generally. If you, if you just do nothing, it's going to go up generally in America unless you just bought super high. But I mean, even if you just buy land, land's going to increase in value or it's going to have alternative uses. It's, you know, buy real estate and wait. But even if you don't want to wait that long, if you look at the cycle since, just since the pandemic, when people were like, oh, I don't know, it's a crazy time. It was crazy. I have people who are up two, three, four, $500,000 on their value because they bought in the beginning of 2020 and other people sat, bought later, they're still up,

• 43:33Speaker 02

  but they're up less. I mean, you just have to keep your eye on the, on the market all the time and, and look at stuff.

• 43:38Henry Washington?

  And you just also have to zoom out, right? Because let's, let's think about it. In the history of America, in people, normal people being able to buy real estate, people have bought real estate and made money in every single real estate market at every point in the cycle. Now, people have also lost money doing all those things. But if we study the ways to success. And we are cautious. It's always a good time to invest because of what you said, Jonathan. If you hold on to it long enough, you'll look like a frick frackin genius to somebody. Always.

• 44:15Dave Meyer?

  Well, thank you guys so much. That was a good way to get out of this episode. Thank you, Henry, for closing us out here. Well, Jonathan and Henry, thank you. This was a lot of fun and a great conversation. I think hopefully this is really useful to our audience. I know it is daunting. Like, I was scared when I first started.

• 44:32Henry Washington?

  You should be scared. You're supposed to be scared.

• 44:35Dave Meyer?

  Yeah, that's part of it. But it's also risk with risk comes reward. And so that's the idea. Yeah, exactly. Well, thank you both for being here. We really appreciate it. And thank everyone who's listening right now for being a part of the BiggerPockets community. We appreciate all of you. And we'll see you for the next episode of the BiggerPockets podcast in just a couple of days.

• 44:57Speaker 03

  Your sausage McMuffin with egg didn't change. Your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.

• 45:09Speaker 04

  Price and participation may vary. Promotion pricing may be lower than meal pricing.

• 45:12Speaker 05

  Sam's Club is the club for every holiday club. Guess who's joining the club this season? Walmart Plus. Yep. Sam's Club Plus membership now comes with Walmart Plus at no extra cost. Two memberships, one great price. Just 120 bucks a year can save you time and over $700. Want to get in on the membership duo of the century? Visit sam'sclub.com. Come join us. Sam's Club.

• 45:33Speaker 06

  Annual plan only. Auto renews. T and C apply. Estimate based on average combined Walmart Plus and Sam's Club Plus savings among members of both for one plus year versus non-member or club member pricing/fees. Excludes membership fees. See Walmart Plus terms and Sam's Club terms for more info.