11 Rentals in 4 Years with SMALL, Affordable Multifamily Properties

We always say it, but buying just ONE rental property can change everything! For Jesse Walters, a coffee roaster by trade but a cash-flowing investor now, buying his first rental property opened up an entirely new world of not only passive income—but freedom. After his wife became a real estate agent, Jesse noticed the sizable commission checks and thought hundreds of dollars a month in passive cash flow beat wholesaling three-dollar bags of coffee. Was he right? Jesse didn’t do any expert-level real estate investing moves to get his first deal done. It was 2021—he found a listing for an affordable house, put 20% down on it, and rented it out. That strategy seemed to work, so Jesse did it again, finding another on-market, affordable rental property to purchase. Then, he took it up a notch, purchasing a fourplex (four units) by putting—get this—$0 down! He used a strategy ANYONE with access to a local bank can try, and this property lit the rocket fuel for his portfolio. Now, he has 11 rental units, runs multiple house flips a year that pay him five-figure checks, and is building a new triplex that will hit the 1% rule from the start. Jesse shares the exact playbook for building a small but profitable rental property portfolio, even with high interest rates, even in a small town, and even if you have no experience. In This Episode We Cover How Jesse used his two small rental properties to put $0 down on a fourplex! “Building” the 1% rule and why brand new rentals may make more sense than existing ones Why you CAN cash flow with affordable real estate in small towns The investor cheat code that Jesse has (thanks to his wife) and why you NEED an investor-friendly agent to get the best deals How Jesse made $21,000 on a quick, cosmetic, low-cost flip (as a complete newbie) And So Much More! Check out more resources from this show on ⁠BiggerPockets.com⁠ and ⁠https://www.biggerpockets.com/blog/real-estate-1114 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.

• 0:00Henry Washington?

  Guess what, folks? You can still buy real estate today and build an investment portfolio that cash flows monthly and build wealth long-term. Yes, even with the current interest rates and home prices. Today, we're speaking with an investor who bought one single family home in 2021, then bought one more in 2022, and then he added a few more small multifamily properties over the last two years. It's not a complicated strategy, but it can have a huge effect on your financial future. Today, he's left his job to focus full-time on investing.

• 0:32Henry Washington?

  What's going on, everybody? I'm Henry Washington, and I'm guest hosting the BiggerPockets podcast today in place of Dave Meyer. On this episode, we have an investor story for you with Jesse Walters. Jesse started investing in Columbia, Missouri in 2021 and has accumulated 11 doors in the last five years. If anyone thinks they can't find cash flow on this market, Jesse is doing just that, even with some interest rates at 8%, because he knows how to identify strong opportunities. He knows how to buy undervalued properties and how to grow within his means. It's a tried and true playbook that almost anyone can follow. If you're on the fence about whether real estate investing is right for you, or about whether or not now is the time to grow your real estate business, this conversation might just convince

• 1:14Henry Washington?

  you. Let's go ahead and bring on Jesse. Jesse, man, thanks for being on the show today.

• 1:18Speaker 01

  Yeah, thanks for having me. I really appreciate this opportunity.

• 1:21Henry Washington?

  Oh, man. Amazing for you to be here. Why don't you give us a little background? Tell us where you were or what you were doing when you first got into real estate.

• 1:29Speaker 01

  I'm an entrepreneur at heart. I was actually a coffee roaster for about seven years. During that time, my wife, she became a licensed agent, and that started growing in the background while I was doing this. And I just started getting the bug. And in 2021, we found an opportunity. We just bought our first rental property. It was on MLS. We put 20% down. There was nothing crazy about it. And the thing cash flowed and...

• 1:56Henry Washington?

  So you said you were a coffee roaster. I assume that means you like owned the coffee business. You weren't like the barista at Starbucks?

• 2:03Speaker 01

  We were a wholesaler. So we got a cafe, but it was like years later. Yeah, so we owned the business. I sold coffee. To cafes, restaurants, grocery stores, things like that. So I was on the back end.

• 2:13Henry Washington?

  I'm sure buying an appreciating asset has got to feel more comfortable than buying coffee and hoping you can sell it to somebody.

• 2:19Speaker 01

  We ran through COVID through all that too. And like coffee prices like doubled during that time. And it was just, but at the same time, this price on the shelf, it didn't really go up much. So like, we were eating a lot of that cost and it just, yeah, it was a lot of sleepless nights in that business for sure. Yeah.

• 2:34Henry Washington?

  Okay. Well, that is definitely a great transition into real estate entrepreneurship. I don't know that the sleepless nights get any less, but it sounds like real estate might be a little less stressed than coffee. So 2017, your wife Megan got her real estate license. I think oftentimes what happens is people either are working in the real estate industry or they're exposed to the real estate industry. And typically it's on a side that isn't an investor seeing the getting the payouts. And so was that what made you realize, hey, I want to be on that side of the closing table?

• 3:07Speaker 01

  Yeah, it was, I started seeing her commission checks and like what I was bringing in. You know, I'm selling a $3 cup of coffee. I'm like, you know, what am I doing with my life? I need to figure this out.

• 3:19Henry Washington?

  So 2017, she was an agent. Was it four years? 2021 you bought your first one?

• 3:23Speaker 01

  Yeah, 2021. So four years later, we finally dove in.

• 3:26Henry Washington?

  Bought your first deal on the MLS, traditional 20% down financing. Uh, but you said it cash flowed, so that's pretty positive. Must be a low interest rate at that timeframe.

• 3:36Speaker 01

  Yeah, that time that was like the glory days. I think we're at like a 3.6, 30 year fixed loan. Like we're just gonna let that ride till the end for sure. But yeah, it's a, I think the mortgage tax insurance like around 850. And like we're running out right now for 1600 a month.

• 3:52Henry Washington?

  Oh, wow. Yeah. So how'd you move on from that deal? Cause it's, it's tough to find deals like that just sitting on the market now.

• 3:58Speaker 01

  Actually, the next two deals we found on the MLS too. So the first three investment properties we bought, but all MLS. The second one, a single family home, like a three, two, it needed some work. We were able to get that one locked in. We put 15% down on a commercial loan and they covered all the renovation costs, everything like that. Still relatively low interest rate, we were able to cash flow that one. And then it really started to snowball after that. In 2023, we bought our first fourplex. It needed work. We were able to use the equity we had in those first two properties. We put some money down in them and then they were also appreciating and we added value to that second one. So the bank, what they did was they used the equity from those other properties as collateral for a down payment.

• 4:43Henry Washington?

  Ah, yeah.

• 4:44Speaker 01

  And so we were able to do $0 into that fourplex and it needed some work, but not a lot. And we put like maybe 25, 30 grand into it and between all four units, which was pretty minimal. That's what really set the cash flow going and it, it just sustained the whole business after that.

• 5:01Henry Washington?

  That's when you're really playing the game. I have several questions about that deal, but before we get to that, we're going to take a quick break.

• 5:09Dave Meyer?

  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? 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.

• 5:50Dave Meyer?

  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 biggerpockets. 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.

• 6:33Dave Meyer?

  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. 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. Some listeners may wonder why their insurance quote only took 30 seconds. Some listeners may wonder why their insurance quote took 30 seconds.

• 7:16Dave Meyer?

  A better question is, how long will that policy actually hold up when you need it? At Enreg, the goal isn't just getting coverage in place. It's making sure your investment property is properly protected when a real claim happens. That's why they take time to evaluate each property's unique risks and build coverage design for the realities investors face. Because anyone can sell a policy, Enreg focuses on standing behind it. Visit n-r-e-i-g.com/bpllc to learn more. 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,

• 7:59Dave Meyer?

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• 8:44Dave Meyer?

  Application times may vary, rates may vary.

• 8:48Henry Washington?

  All right, we're back with Jesse and we're just getting into the meat and potatoes about how he started to scale his real estate business. It sounds like you said you bought a fourplex. This fourplex, did you buy it on the market or was it an off-market deal?

• 9:01Speaker 01

  It was on MLS.

• 9:03Henry Washington?

  On the MLS, but you said you were able to do something that, a strategy I like to use. Essentially, it's called cross collateralization. So you bought this duplex, but since you had owned a few other single-family rental properties and those rental properties had appreciated, it sounds like the bank allowed you to pledge equity from other properties and use that as your down payment. Was this a local bank that you used or what kind of lender was this?

• 9:33Speaker 01

  Yeah, correct. It's a small local bank here in my area. I didn't even know about it. They offered it to me like, hey, you should do this. And I'm like, what is that? And it actually took two different meetings. He explained the whole thing to me. I took notes. I went back home. I'm like, I still don't understand this. And I went back to him again. I'm like, explain this one more time, how this works.

• 9:54Henry Washington?

  That's, I mean, that's the power of relationship banking, right? So relationship banking is typically going to be a bank like a small local community bank. And the reason they are called relationship banks are because local community banks must lend to local community businesses in order to generate income. They're not like bigger banks who originate loans and then sell those loans off. They originate loans and they keep them in their portfolio. And so what they're really looking for are good investments to put their money into that they, and then they're looking into good operators that to entrust with these loans. And so essentially, when you build that relationship, what you're doing is you're showing them that, hey, I can buy good deals.

• 10:39Henry Washington?

  I'm buying deals that are going to have equity in them. And that makes the bank feel comfortable. Banks typically like real estate investors who are good operators and can buy good deals. And typically, they will go out of their way to figure out how to help you to continue to grow. The same thing happened to me. With one of my first deals, a bank basically was like, hey, man, I want to give you a line of credit on this property. So you can keep bringing us deals like this. For people that are listening, like if you have a relationship with a local community bank already, if you've done some deals already, go talk to them about cross collateralization. Uh, go talk to them about if you've got existing properties, go talk to them about pledging equity in your properties to use as your down payment. This is something that a lot of banks do.

• 11:23Henry Washington?

  But if you have a good relationship, sometimes these banks just bring you these ideas and really help you grow. That's super cool to hear. So you bought this quadplex. You used this cross collateralization strategy. What'd you pay for it and what were, what was it, what is it rent for?

• 11:38Speaker 01

  Yeah, so we bought it for a hundred and ninety thousand. We paid full price asking on the MLS for it. We just, we knew there was an opportunity there. And this is in a smaller town outside of where we do a lot of our investing. It's actually my hometown, so I knew the market pretty well. So bought it for one ninety. We put twenty-three, twenty-four thousand dollars in it between all four units. Uh, at the time rents were very, very low and it was actually lower than I thought it was. Three of the four units went up for rent when we purchased it. So one was vacant when we bought it. And then when we took ownership, two voluntarily left and we only just had one of the original tenants left. So we had, we had to turn all three of those very quickly.

• 12:22Speaker 01

  So the first unit, we rented for seven hundred dollars a month. Turns out that was way too low. We should not have done that.

• 12:29Henry Washington?

  Is that tenant still there now?

• 12:30Speaker 01

  Actually, no, she ended up leaving. Um, but, uh, yeah, we had, but my phone was ringing off the hook. I was like, okay. So the next one, we put it at eight hundred a month and then it started leveling out a little more. But, uh, that all being said, so we left the original tenant place. We raised his rent a little bit, but we didn't want to put him up to market. He'd been there a long time. We got rents up to about twenty-four hundred a month and we had. Whether than we had like 215,000 in it, 220 in it. So like we were over the 1% rule on the MLS buying this deal.

• 12:59Henry Washington?

  Yeah, no, that's great. That's great.

• 13:01Speaker 01

  Kind of a bonus too. There was a vacant lot with it next to it and it was all part of the package. So I got a vacant lot just sitting there free and clear too on the deal.

• 13:09Henry Washington?

  Oh, man, I love doing that. That's another strategy I really enjoy is finding properties that have either lots big enough that you can split off a vacant lot. So like legally go to the city and split it off and then you'll get a vacant lot free and clear or specifically marketing to properties that have additional lots. Cause typically when you buy the property at a discount, you essentially get the, the land for free, which you can use to develop later. I'd be there. I've done all scenarios. I've bought land with a free lot and then sold the free lot to cover my down payment on the, on the property. I've also bought land with a lot and then we're looking at developing some of that land right now. So it really gives you options for later on down the road and it's free land.

• 13:52Henry Washington?

  Right? Like why, why wouldn't you do that and have those options? So I also want to talk to you about, so you, you dabbled in this multifamily now. So did that become your main strategy going forward or are you still focused on singles?

• 14:05Speaker 01

  It definitely put a light bulb in my head for multifamily. Uh, we, I really look for them. I, I want to buy more of them, uh, but it's not my only strategy. I still do a lot of single families. Uh, we actually purchased a condo last year because the numbers worked.

• 14:18Henry Washington?

  Yeah.

• 14:19Speaker 01

  Uh, and we, we did that too.

• 14:20Henry Washington?

  You're, you're like me, man. I'm on, I'm going to buy it if it's a good deal. I'll figure it out after I buy it. Sometimes I'll keep it. Sometimes I'll sell it. So one of the things that's unique about you, Jesse, is your wife is an agent and a broker. And there's a lot of new investors who always ask the question, should I get my license to get started in real estate? And I'm not going to, I'm not going to throw that question at you, but I am going to say, do you feel like it's been a benefit to you to have somebody around you that has a license? Or do you feel like it's been a hindrance?

• 14:52Speaker 01

  I'm biased with the being my wife. I'm going to say she's a really good agent, but she actually is like, she is one of the top producers in our area. And I go to her, when we flip a house or if we have a Rental or anything like that. I'm going to her like asking all these data points and like, what do you think we should do X, Y, Z? Even on the design, uh, you know, hey, what are you seeing in houses that are selling like, should we, what color should the walls be or the, what kind of floor should you put in? Like, she's like, yeah, the X, Y, Z, you know, these, these homes with this flooring tend to sell better and it, it has been a huge help and I, you know, I can get a pretty good idea of like what the value of a house will be, you know, after we do repairs, things like that, but like she is way more accurate than I am. And I think that goes for most agents.

• 15:35Henry Washington?

  Probably the most important person on a real estate investor's team is that investor friendly real estate agent. And luckily for you, you're married to yours. I always tell people that if you're getting your real estate license, just because you want to be a real estate investor, that's probably not the best first move. Because they don't really teach you about real estate investing at agent school. That's not really helpful for you. I think there are other things that you can do that are more beneficial, but having an agent, a good investor friendly agent on your team is great. Like I would love for someone that was directly tied to my business to have their license.

• 16:18Henry Washington?

  Luckily for me, I have a phenomenal agent and uh, instead of, since you married yours, I just moved into my investor friendly agent's office. Like I, I, I rent a space in his office so that I can be that much closer to them.

• 16:33Speaker 01

  I like that strategy.

• 16:34Henry Washington?

  Also like just the ability to have someone that can help you accurately comp. Because I mean, the best way to comp a property is with MLS data. And so, I mean, that alone will save you a ton of money. So uh, I don't know that you need your license to be a real estate investor, but having somebody with a license close to you is absolutely a cheat code.

• 16:56Speaker 01

  If my wife was not licensed, I probably wouldn't be either. Uh, but I, really the sole reason I have my license is to help her out with her listings, things like that. If, if I was just full-time investor, I probably wouldn't have my license either.

• 17:10Henry Washington?

  For those people who are considering getting their license, what are some of the benefits being licensed as an investor? So you specifically having your license, what benefit does it have for you and your investing business?

• 17:23Speaker 01

  One, I do have access to MLS data. That's probably the biggest one, especially where we're located. So we're in Missouri and it's a non-disclosure state. So, sales price for homes and multifamily in the state are not public data. You can only get it through the MLS. So there is Zillow, things like that, but they're not accurate. And so having that data is crucial to an investor. And then also, the other big one is commissions. Like, you know, you can kind of leverage your commissions when you're buying and selling properties too.

• 17:54Henry Washington?

  Talk about kind of how you do that.

• 17:55Speaker 01

  Like that fourplex we were talking about. We, when we went to put in an offer, this thing was on the market like one day and there were other people getting ready to come in and place other offers. So what we did, we placed a full price offer on this thing and waived our commissions. So they got kind of an over asking offer without us having to overpay.

• 18:14Henry Washington?

  Okay. In other words, they were able to actually pocket more money because they didn't have to worry about agent commissions because the seller typically pays the commission. So you waive your commission. So instead of them selling for 190 and then paying 6% or 3% in this case to an agent, they get to put that 3% in their pocket.

• 18:34Dave Meyer?

  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 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

• 19:16Dave Meyer?

  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/real estate 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 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.

• 19:59Dave Meyer?

  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, 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.

• 20:42Dave Meyer?

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• 21:27Dave Meyer?

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• 22:51Speaker 03

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• 23:17Henry Washington?

  All right, we're back with Jesse Walters out in Columbia, Missouri. Let's talk about flipping houses. So Jesse, it looks like you had some experience buying rentals and figuring out how to get a little creative with the financing so that you're not having to put 20% down every time. I know recently you have started flipping houses. Can you talk to us a little bit about what your flipping business looks like and how you got into that?

• 23:45Speaker 01

  I kind of flipped my first house on accident.

• 23:49Speaker 01

  Yeah, it was, it was actually a condo. Uh, here in town, we bought it uh for my grandmother in law to live in at one point. It it was just gonna work out there and then all of a sudden it didn't work out like it turned out she needed to go to nursing home and it was one of those things of like, well, I could rent this thing out. I was like, but it's not really gonna cash flow that much. I wasn't buying it for the cash flow. So so to say, I'm like, well, I can just turn this around and flip it. So that's what we did. We could put a good chunk of change in our pocket. I was like, huh, maybe I should keep doing this.

• 24:20Henry Washington?

  Tell us about the numbers on that.

• 24:21Speaker 01

  It was kind of an interesting story how we got it. It was listed for a hundred and fifty thousand, which was already under market value. No photos or anything. I went and looked at this thing. It was tenant occupied. I spoke to the tenants for like half an hour. An older woman and her daughter was living there, things like that. And they kept asking me, you know, like, if you buy this, what are you gonna do with it? Can we stay here? All these things. And like, I just, I I mean, I was very blunt and honest, but I was like, I mean, my intention is, you know, for my grandmother in law to live here. However, like, I'm not just gonna kick you out. Like, we're we're gonna come up with a plan to find you another place. I'm not gonna make you homeless, things like that. Like, I will definitely help you in those ways. Well, it turned out those tenants were very in the ear of the owner.

• 25:04Speaker 01

  So the tenant was really driving this whole transaction. I guess I was the only one that came in there and told the tenants I would not kick them out. Everyone else said they would. I was the lowest offer on the table and they took my offer.

• 25:16Henry Washington?

  You know, I I often tell people that real estate is not a real estate business. It's a people business that transacts in real estate. The more we can find ways to take care of people, the more your business will thrive because there are people's lives at the other end of our real estate transactions, at the other ends of this wealth we're trying to build. A lot of investors, I don't want to say most, but a lot of investors are very transaction focused. It's all about the numbers. If the numbers work, it's great. If the numbers don't work, then it's not great. And if I need to get rid of a tenant to make the numbers work, then I'm gonna do that. I've often just found that.

• 25:57Henry Washington?

  Being of service to people is the best way for me to A grow my business, but be sleep at night. Like if I lose a deal because I can't take care of the, because I wouldn't have been able to take care of the people, then I'm, I'm fine with that. I'll go find another deal where I can, where I can help somebody. So I, I appreciate you taking that approach because I think that's what people need to learn how to do. They need to learn how to take care of people first. The money makes itself.

• 26:24Speaker 01

  It, it took a little longer in this process, but it, we really didn't lose any money of it and, or any sleep. But we found these people actually a better place to live in the future and it was, it just worked out for everybody.

• 26:35Henry Washington?

  Okay. So you bought it for one thirty. You put how much into it?

• 26:39Speaker 01

  We put eighteen thousand into it. It was a pretty easy cosmetic.

• 26:43Henry Washington?

  That's a great deal.

• 26:44Speaker 01

  Yeah, yeah. Paint, carpet, uh, some light fixtures, a couple of new appliances and that was really it.

• 26:50Henry Washington?

  And you sold it for?

• 26:52Speaker 01

  We sold it for one seventy-five.

• 26:53Henry Washington?

  Nice.

• 26:54Speaker 01

  After commissions, closing costs, it was a little over twenty-one thousand dollars profit.

• 26:58Henry Washington?

  Nice. Yep. And so now you definitely got the bug because I know I did after I did my first flip.

• 27:04Speaker 01

  Definitely. Yeah. Yeah. It was a, a, another libel moment for me in my investing career. I was like, we need to do more of these. Yeah.

• 27:11Henry Washington?

  Okay. So how did you, how did you expand that part of your business and what does it look like today?

• 27:15Speaker 01

  I rely pretty heavily on, uh, my outreach is mailers, but I've also bought from wholesalers. I bought a house from my, uh, it was a referral from my junk removal guy. So my contractors send me houses now too. Uh, so it, it's kind of all around and I, I still look on the MLS all the time. I, we bought one on the MLS last year, uh, and then, uh, actually another agent sent me a couple of duplexes last year too, uh, before it hit the MLS.

• 27:40Henry Washington?

  What kind of volume are you doing in your flipping business?

• 27:42Speaker 01

  Last year I closed out five flips and this year I already have five. I've closed one and, uh, I've got four under construction right now and then they're all in different phases. But, uh, yeah, I, I, I assume we'll probably be ten to fifteen by end of this year if we keep doing what we're doing. Yeah.

• 28:02Henry Washington?

  Okay. That's amazing. And so you said, uh, Columbia, Missouri is where you. Live and invest. Is that the only market you invest in?

• 28:09Speaker 01

  For the most part, yeah. So Columbia and then my hometown is Boonville, Missouri, small 8,000 population.

• 28:16Henry Washington?

  I was gonna say, it sounds like you made that up, to be honest.

• 28:18Speaker 01

  Yeah, it kind of is. The thing Boonville is known for is to have a casino. It's probably one of the smallest towns in the nation that has a full-blown casino in this thing.

• 28:27Henry Washington?

  Yeah.

• 28:28Speaker 01

  But it really helps the economy there. And it's a commuter town for Columbia, which is the University of Missouri is a lot of hospitals. It really, economy-driven town, like with a lot of jobs, a lot of people moving in and out of here, things like that. So Boonville has naturally kind of grown with Columbia. As Columbia keeps growing, like as Columbia gets more expensive, Boonville becomes more and more attractive to renters, for sure. And we've definitely learned that in our experience. So I have more luck within the rental market in Boonville than I do Columbia now. It's a lot easier to get into it. It's easy to find renters, good renters, too. And yeah, they're appreciative and want to be there.

• 29:08Henry Washington?

  Yeah, man. I would encourage everyone who is investing in a specific town, especially if that town is a larger town, to look for a smaller town within 30 minutes to two hours away that share, that shares some of the same market dynamics and have a good, strong economy. In Jesse's case, this is fueled by a casino. Typically, there's always a small town in and around your, your larger town that has similar market dynamics where it may be easier for you to find, and cheaper for you to find a deal, but still get that consistent cash flow.

• 29:47Henry Washington?

  All right, before we get out of here, Jesse, it sounds like each year you've kind of improved and progressed as a real estate investor and become more mature. What are you doing now or in 2025 that's different than what you've done in the past?

• 30:04Speaker 01

  A big change we're, we're making this year in our investments. So that fourplex we mentioned, we actually sold it. So going back, we bought it for 190, we put 20, 25 in it, I think, and We sold it for three eleven.

• 30:21Henry Washington?

  Oh, wow.

• 30:22Speaker 01

  Two weeks ago. But anyway, all those proceeds, we're ten thirty wanting it into a vacant lot a block over. Uh, we are gonna build a brand new triplex on that.

• 30:32Henry Washington?

  Do you mind sharing the numbers for this this new construction?

• 30:35Speaker 01

  Yeah, so this triplex, we're estimating to cost around four hundred thousand dollars to build. And with it being in a smaller town, the land that we're buying is hardly anything. I think we paid seventeen thousand dollars for this lot. Yeah, so there really isn't much going into. It's really just the the build itself is what we're investing in. Based on my experience with rentals there, there's a huge need for it. And especially three bedrooms, there's a lot of twos and ones in in these smaller markets. There are no three, so we're building all three bedroom units. And it'll have off street parking, it has laundry, like things that like these smaller chances don't have, especially where we are. It's a lot of older homes, hundred plus years. And there there isn't laundry hookups or anything like that. So it's kind of become known that you just don't get laundry in in this area. Well, we're gonna have that, so we're gonna offer something else.

• 31:21Speaker 01

  And I think our rents, I'm projecting to be between thirteen and fifteen hundred a month per unit.

• 31:27Henry Washington?

  Hmm, wow.

• 31:28Speaker 01

  So I'm building at the one percent rule, just about.

• 31:31Henry Washington?

  Yep. So it sounds like on the low end, you're at thirty nine hundred a month in rents. On the high end, you're like at forty two, forty three hundred dollars a month in rent. You're bought the land for seventeen, you're building for four, so you're all in at four seventeen. And you're hitting the one percent rule on new construction. And we all know, like, the one percent rule is a great rule of thumb, but I think I think the cool part about it is you're at the one percent rule in new construction. A lot of your expenses with rental properties are maintenance and capital expenses. But when you do new construction, your maintenance and your capital expenses are typically gonna be far lower because the property is so brand new.

• 32:15Henry Washington?

  So you kind of put that off for five to ten years, which allows you to actually make more cash flow. So I think that that's great. And I also love that you you you didn't just say, I'm gonna go build something. You said, I'm gonna go build something, but I'm gonna build something that's gonna have demand. And that's why we always tell people like, real estate is such a local game. You have to understand your local market and your understanding of your local market told you that there's a shortage of three bedrooms and that there's a shortage of rental properties with laundry. And so essentially by building something that doesn't exist, you get all the demand for that product because there isn't that product anywhere, which essentially

• 32:59Henry Washington?

  is gonna allow you to probably get the top rents in the market because you have a brand new product and you have amenities that don't exist in your market. So it sounds like if you want to invest in Columbia, Missouri, or Boonville, you need to build three bedrooms or you need to go buy laundromats.

• 33:14Speaker 01

  Give me a couple of years head start, but yeah, you guys.

• 33:19Henry Washington?

  That's okay. Go, go, uh, go find all the laundromat owners in the area. Let's start marketing to them and I'll go on on a laundromat business with you down there.

• 33:26Speaker 01

  I love it. Let's do it.

• 33:27Henry Washington?

  All right, Jesse, thank you so much for sharing your journey in real estate investing with us here. Do you have any last minute advice for somebody who's brand new and looking to get started?

• 33:40Speaker 01

  If I could say one thing that really propelled me forward in the, in success of all this, get in with a group of like-minded people. It gave me so much more confidence. Like my problems are not unique. Everyone's dealing with the same stuff.

• 33:52Henry Washington?

  Yes.

• 33:53Speaker 01

  And if, if you can hear other people talk about it, either you guys can, you know, kind of drink a beer together and just talk about it, or the other person will have a solution for you. One of the two, you know, it's, it has helped me tremendously.

• 34:05Henry Washington?

  100% man. Who, who you choose to be around will show you what's possible. I've, I've always said that and it's, it's hugely important. So change your circle, change your circumstances, man. Thank you again, Jesse, for joining us. We appreciated having you. We hopefully you all learned a whole lot. And if you think the BiggerPockets audience could learn from your own investing journey, you can apply to share your story on the show, just like Jesse did, at biggerpockets.com/guest. I am Henry Washington and we'll be back with another episode of the BiggerPockets Podcast in just a few days. Thanks for listening.

• 34:38Speaker 03

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