Making $60K Per Month with the Repeatable, Low-Risk Real Estate “Formula”

Today’s guest makes $60,000 per MONTH the old-fashioned real estate investing way. He buys rentals you can find on any real estate listing site, uses his own money to invest, doesn’t need “creative financing” techniques to fund the deal, and treats his tenants well. This is a real estate portfolio anyone can repeat, and it has made Welby Accely a multimillionaire in just over a decade, even after he lost everything (three times!). In a time when every real estate guru is trying to get you into the lowest-money-down deal with the most risk and the shallowest margins, Welby takes it the whole other direction. His simple offer “formula” allows him to buy properties under market value, fix them up, get them rented, and refinance out to create an “infinite return.” Basically the BRRRR (buy, rehab, rent, refinance, repeat) strategy, but EVEN safer. How does he find rentals that are (almost) always worth more than what he pays for them? Welby says, “Every deal is a flip,” meaning if you buy rentals like a flipper would, your profit margins massively multiply, and you reap huge financial benefits. Welby is a REAL real estate investor, giving you a real strategy you can use in 2025, even with high interest rates. The question is, will you take advantage of it like Welby did? In This Episode We Cover Welby’s unbeatable “offer formula” to get discounted real estate deals with HUGE equity upside Why Welby believes every investment is a “flip” and how it’s made him millions How to find real estate deals ON-MARKET by simply browsing listing sites and activating notifications Why Welby always puts more money down on his properties (and it pays him back BIG time) What you can offer (that isn’t money) to get a seller to accept your bid And So Much More! (00:00) Intro (01:32) NEVER Buy “Cheap” Real Estate (03:54) Every Investment is a “Flip” (06:13) ONLY Buy These Properties (09:32) How to Find On-Market Deals (15:29) The Easy Offer Formula (18:02) Put MORE Money Down (23:21) $4,300/Month Cash Flow (ONE Property) (27:55) Offer More Than Money (32:02) Follow Welby’s Formula! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1102 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?

  Did you know that every real estate deal is a flip? Even if you're a hardcore buy and hold investor, you're gonna buy a house, you're gonna renovate that property, and eventually you'll sell that property. So whether it takes you three months or 30 years, it's still a flip. At least that's the strategy today's guest used for the last 12 years to build a portfolio that generates $60,000 in net income every month. Let's hear how he did it.

• 0:28Henry Washington?

  Hey, everyone. I'm Henry Washington, filling in today as host of the BiggerPockets Real Estate Podcast. Today's guest on the show is Welby Acelli. Welby's an investor operating in the New York and Connecticut markets, and you may have heard him on a few shows around the BiggerPockets Network, including episode 464 of this very show. Usually when we have investors back on the show, it's because they're doing something new and different. But I wanted to have Welby back on the show because he's still doing the same thing now that he was on the episode four years ago. He's buying properties on the market, he's putting down 25%, he's adding value, and he's selling them at a profit or renting them out for monthly cash flow. Welby's still doing it now because it still works.

• 1:09Henry Washington?

  Even for someone like him with more than $10 million in equity, it's all about the basic fundamentals of good real estate investing. If he's still focused on buying at the right price and correctly projecting his ARV after 20 years in the game, you can too. So today Welby's gonna tell us why he views every deal as a flip, and why he likes putting money down, and so much more. Let's bring on Welby. Welby, welcome back to the show.

• 1:34Speaker 01

  It feels like it's been forever, man. Thank you for having me back, man.

• 1:38Henry Washington?

  Oh, man. Good to have you back, man. So for the people who don't know you, can you give us a little background, quick summary of your investing career?

• 1:45Speaker 01

  Yeah, so my name is Welby Acelli. I started buying real estate in late 2003, early 2004. I live in New York, and the first piece of property I bought was a four-unit property. And what I talk to people about is about the major pitfalls that I've been, that I've experienced in the business, my ups, my downs, the losses that I experienced, and ultimately how I overcame them to be where I'm at today.

• 2:08Henry Washington?

  A lot of people have pivoted strategies or changed what they're doing over the past five years as the market shifted. But you seem to be doing exactly the same thing you were doing before.

• 2:19Speaker 01

  I've thrown some gasoline and exactly, exactly what I've been doing before. My story is the same. When I started out, going back real quick in 2003, it took me over 10, 11 years to figure this out. So I got wiped out in 2008, 10, and 12. I got wiped out. And then what I realized, by the time I got into the business around 2013, again, it took me about 18 months to be a millionaire. This is where I realized that the entire business of investing in real estate is a flip. And once I put that in my mind and understood that concept, my approach, I stuck with that. That's what I've been doing. So irregardless of what's going on with the climate, interest rates, high or low, slow

• 3:03Speaker 01

  market, down market, it don't matter to me. It doesn't matter.

• 3:06Henry Washington?

  I have a very similar business strategy. I'm doing the same things I was doing when I first got started in real estate. Because real estate is very simple. You have to buy property at a discount. You have to add value to that property. And you have to monetize that property at its new higher value. And it doesn't matter what interest rates are doing. It doesn't matter what all the other expenses are doing. All that just tells me that I need to buy it cheaper. Right?

• 3:29Speaker 01

  Here's the sad part is Henry, most people will hear you just saying that and they don't appreciate it enough what you just said. So people have this concept of buy low, sell high. But then there's a threshold of buying low enough to be able to add the value that you just described to that property, to ultimately sell that property, or even refinance that property to keep that property long term for cash flow.

• 3:54Henry Washington?

  So let's elaborate a little bit. When you say, you say every, every real estate deal is a flip. Even if you're a long-term buy and hold investor, every deal is a flip.

• 4:03Speaker 01

  I don't care what you're trying to do in this business. Everything about this business is, is a flip. Everything about it.

• 4:08Henry Washington?

  Tell me what you mean by that.

• 4:09Speaker 01

  All right. So I don't care if you look in the wholesale. I don't care if you're looking to do subject to. I don't care if you're looking to flip like HGTV. I don't care if you're looking to do. Buy and holds, I don't care if you're looking to buy foreclosures, who cares? Everything about this business is a flip, but what people need to understand is that there's three major entry points of investing in real estate that the majority of people like to talk about. The first one is a wholesaler. What does a wholesaler do? A wholesaler gets a property under contract at the right price point to ultimately flip that property to somebody like me or my brother Henry. You agree or you disagree?

• 4:44Henry Washington?

  That's facts.

• 4:44Speaker 01

  Okay, second is a flipper like HGTV. What does a flipper do? A flipper gets a property under contract at the right price point, renovates that property to put that property back on the market to ultimately flip that property to an end buyer, typically retail. You agree or you disagree with me?

• 5:02Henry Washington?

  Absolutely.

• 5:02Speaker 01

  Okay, last but not least is a buy and holder. What does a buy and holder do? A buy and holder gets a property under contract at the right price point, renovates that property, rents that property out to ultimately flip that current mortgage into a long-term mortgage for passive income. You agree or you disagree with me?

• 5:19Henry Washington?

  Absolutely.

• 5:20Speaker 01

  The entire business of investing in real estate is a flip. Once I understood that concept, it simplified my approach of investing in real estate. So it didn't matter if I was looking to build new build construction or if I was looking to wholesale a deal to somebody or if I was looking to keep that property for long term. There's a fundamental approach that you must have irregardless of the market that you in, the style of investing that you want. And once I understood that concept, you could drop me in any market on this planet and I'm gonna make me some money.

• 5:53Henry Washington?

  Yeah, man, so essentially what you're saying is you have to know how to buy properties the right way. Because at the end of the day, you gotta be able to exit that property. Even if that exit is you refinancing the loan to yourself.

• 6:07Speaker 01

  Who cares?

• 6:08Henry Washington?

  It's still selling the property, you're selling your equity, you're just selling it to yourself.

• 6:11Speaker 01

  Exactly, and and and one of the most important skill set that investor needs to have is the ability to evaluate.

• 6:20Henry Washington?

  Tell me more about that. How are you evaluating your deals?

• 6:22Speaker 01

  Well, for me, any property I'm looking at, it has to fall into one of two categories, but normally, most of my properties fall within both. Any property I'm looking at, it must be a distressed and or underperforming property. I have zero interest in buying anybody's turnkey property. I must have the ability to add value to the property. If I can't add value to the property, it's not a deal for me. So with that approach, let's just talk about rentals. I'm looking at properties that are distressed, meaning that the property is beat up. It's the same material, same kitchen, same bathroom that was built in the nineteen eighties. Or I'm looking for a property that the landlord is getting is tired.

• 7:04Speaker 01

  The rents are currently eight hundred dollars a month, but in reality, if you would give this property some love, I could double the rent. So I must be able to add value to the property. What most people don't realize now is that most people are playing the waiting game while Henry and I are playing the forced appreciation game. So the same property that somebody is gonna buy hypothetically at the top of the market and is so excited to get to the closing table. You bought that property for three hundred thousand dollars. Me and Henry is gonna find, negotiate and purchase that property for maybe a hundred and twenty thousand. A hundred and twenty thousand dollars, we're gonna then now maybe put in another sixty thousand to fix it. We have a hundred and twenty thousand dollars of immediate equity that was forced appreciated in the same timeframe of how you purchased your property.

• 7:50Speaker 01

  So now we accelerate in our wealth way more quicker than when you buying at the top of the market simply to be excited to buy and then wait for appreciation.

• 7:59Henry Washington?

  So you look for distressed or underperforming. So distressed, meaning the quality of the property may be under distress. And underperforming, meaning it may not be producing the income it should or could be producing because a million reasons. Sometimes landlords just don't like to raise rents. Sometimes a lot of landlords are just bad landlords.

• 8:19Speaker 01

  Yeah, most of the time, most of them are.

• 8:21Henry Washington?

  And they don't do. The right things about making sure their properties stay up to date. And so typically, when people talk about buying distress or underperforming, that typically means they're buying everything off market, right? That's what you do?

• 8:33Speaker 01

  Oh, absolutely.

• 8:35Henry Washington?

  You're not buying off market.

• 8:36Speaker 01

  Listen, eighty-five to ninety percent of the deals that anyone ever sees me purchase, I purchase right off the MLS. Zillow, Redfin, Realtor.com.

• 8:46Henry Washington?

  So twenty twenty-five, right now, when everybody thinks they can be a real estate investor, you still buy eighty percent of your deals on the market off the MLS? And you buy distress and underperforming?

• 8:56Speaker 01

  A hundred percent. Now, that doesn't mean, because I don't want anybody to think they're gonna box me into a corner and say, oh, he only buys in that manner.

• 9:05Henry Washington?

  Yeah.

• 9:05Speaker 01

  Eighty to ninety percent of my deals come off the MLS. But of course, given the fact that we're out there actively investing, off-market deals will be presented to you eventually.

• 9:16Henry Washington?

  Right, but you're not spending a bunch of money on off-market acquisitions.

• 9:20Speaker 01

  I spend zero money on off-market acquisitions. I'm just active and I get opportunities. People contact me or people knows me. I have a reputation in the area and it gets presented to me.

• 9:32Henry Washington?

  All right, we have to take a quick break, but when we come back, I'm gonna ask Welby to give us some secrets on how he's finding these great deals on the market. We'll be right back.

• 9:41Dave Meyer?

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• 10:26Dave Meyer?

  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. And with loan to value options up to 80 or even 85% on eligible deals, you can keep

• 11:10Dave Meyer?

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• 11:55Dave Meyer?

  and learn more today.

• 11:57Henry Washington?

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• 12:41Henry Washington?

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• 13:01Henry Washington?

  All right, we're back with Welby. Let's jump into finding deals on the market. All right, Welby, we want to make sure that we give some people some actionable information. You are claiming you're buying the deals on the market. Most investors would love to just open up Zillow or Realtor.com and find a property to buy and go and buy it, but they struggle to do that. So what are you looking for that maybe other people aren't? That helps you find some of these distressed or underperforming properties?

• 13:28Speaker 01

  Well, doing your recon work in the environment that you look into investing is vital, because I'm sure, Henry, if I were to ask you the areas that you're investing in, I bet you that you have your finger on the pulse. And when a new property pops up on the MLS, you are aware of it.

• 13:44Henry Washington?

  Absolutely.

• 13:44Speaker 01

  And then if something lingers on the market longer than usual, you are aware of it as well, right? So that's what I do. So I invest heavily in multiple areas in the Connecticut market. I utilize notifications on these apps like the Zillos or the Redfin's or the Realtors.com to let me know when new properties pop up. And then I have relationships with Realtors as well. When new opportunities pop up, I usually get notified and say, hey, did you see that property there? And then within a few minutes, I'd be able to tell you how much I'd want to pay for that property and how fast I can close on that property.

• 14:21Henry Washington?

  Okay, so a new property pops up on the MLS, it hits one of your email notification lists. You get an email. How long does it take you between when you get that email to submit your offer? Because I think a lot of people think, well, I gotta go see the property. I gotta evaluate it. I gotta figure out what I want to pay for. I gotta submit my offer. So if you get a notification right now, how long until you make your offer?

• 14:44Speaker 01

  I would have an offer in within five minutes. I'd have an offer.

• 14:47Henry Washington?

  So you're not seeing these properties before you offer?

• 14:49Speaker 01

  I don't want to be extreme, but I would say almost 100% of my properties that I put an offer in, I do it sight unseen. What happens is that you build up enough of an experience to understand, because you've done enough of these type of properties in the environment, that you already can have a strong estimate of what the cost is going to be for you. In addition to that, you understand how to evaluate based off of what you project the cost of the rehab is going to be, you understand the maximum of how much you're going to be able to buy that property for in relations to what it's going to cost you to fix it, right? So given the fact that I already understand that, I already have realtors in my rolodex, I'll contact them and say, hey, look, I need you to put an offer in. Here's my proof of funds. This is how much I want to submit.

• 15:32Speaker 01

  You will miss 100% of the shots that you don't take. I already understand that the odds are of me winning a bid on a property is extremely low. That's just the nature of the business. So you want to cast out as many fishing lines as possible, because eventually somebody's going to bite or entertain your offer. So when I submit my offer, I give my proof of funds, I leave it to the wind and move on to the next opportunity.

• 15:59Henry Washington?

  Okay, I love this Welby, because I think you're dispelling a lot of myths for people. I feel like people think you can't find deals on the MLS, but right now in 2025, you're still doing it. And I think that people think that if you're going to make offers on the MLS, that you need to go see every property. I don't do that either. We do make offers on MLS deals and we don't see them. And I think what I want people to understand is, the two things that you need to be able to make an offer on a property, if it's listed on the MLS, is you need to know what's the ARV. And just because it's listed at a price does not mean that price is the ARV. You need to do your own research and run your own comps, or have your agent do their own research and run their own comps,

• 16:42Henry Washington?

  so that you know what the ARV is. The benefit to somebody like Welby or myself is we're experts in our market. I can see a property and see the address and pretty much ballpark the ARV, because I've been investing for long enough. But until you get there, you can't do that. So you need to be able to comp the property yourself. The second number you need- To know to be able to make these offers pretty quickly is you need to know what it's going to cost you to renovate that property. But in order to make the offers on the MLS, you don't have to have that number dialed in down to the penny.

• 17:11Speaker 01

  No, you don't.

• 17:12Henry Washington?

  You just need to be able to ballpark it. We're not saying buy properties without seeing them. We're saying make the offer.

• 17:20Speaker 01

  Thank you.

• 17:20Henry Washington?

  Without seeing it.

• 17:21Speaker 01

  You give me goosebumps, bro.

• 17:22Henry Washington?

  Once you get that person to respond to your offer, maybe it's a counter, maybe it's an acceptance. Then you go see the property and you dial in your numbers to the penny and then you can modify your offer. Based on what you see at the property, but if you spend your time seeing every property before you make an offer. It'll limit the amount of offers that you make and it'll take you forever to get a deal. But what Welby is doing is he is making an offer on everything that pops up. That it fits his buy box. And here, let me tell you another secret. You know what the least important number you need to know is? What it's listed for. I could care less what a property is listed for.

• 18:03Henry Washington?

  What you want to sell your property for is between you and God. I ain't got nothing to do with that. I can only offer what I'm willing to pay for.

• 18:09Speaker 01

  You know how many people put themselves out of the game because they're so focused on what the list price is versus understanding your price? Your price is most important to you. So you know your price and forget about the list price. What's also important is within your offering a contract, you want to put contingencies in the contract. Which will automatically protect you. So then when you do decide if they are entertaining the offer that you put in. When you do decide to go physically go look at the property, if for whatever reason it blows the budget that you projected. Because of the contingencies you put in the contract, it allows you to pull out and not get penalized financially.

• 18:50Henry Washington?

  Absolutely. And your agent can help you with those contingencies. As an experienced agent, especially one that's worked with investors before, will know exactly what contingencies need to be highlighted in that contract.

• 19:02Speaker 01

  That's right.

• 19:02Henry Washington?

  So I want to give everybody a quick formula that they can use when they're evaluating these deals and making their offers. This will help you be able to make more offers on deals on the MLS or make offers in general. So what you need to know is what's my max allowable offer? How much can I afford to pay for this property to hit? The numbers that I want to hit. So MAO, max allowable offer equals the after repair value or ARV. Minus your real estate commissions that you're gonna pay. So minus 6% for real estate commissions. Minus your closing costs, but it's not just closing costs on the sale. It's closing costs on the buy and the sell. Cause you gotta buy the property and you'll pay closing costs. And then you gotta sell the property and pay closing costs.

• 19:43Henry Washington?

  And I like to pad this number because right now buyers are requesting more from you when you sell a property. Buyers are wanting you to pay their closing costs too. And so I'm padding that number a little bit. So MAO equals ARV minus commissions minus closing costs minus holding costs. This is what does it cost you to borrow the money? If you're not paying cash, you're gonna borrow the money. That means you're gonna pay interest. You need to estimate how much interest you're gonna pay. If you're using a bank, it might be seven, eight, nine percent. If you're using hard money or private money, it might be 10, 11, 12, 13%. Minus your renovation costs. So that's the estimate of how much it's gonna cost you to renovate that property. And then subtract how much profit you want to make. Once you subtract how much profit you want to make, that'll leave you with your max allowable offer.

• 20:29Henry Washington?

  And so you can quickly do this math for every property that's listed that you wanna make an offer on. And then you can present that to your agent, your agent can write that offer. And then when and if somebody responds to your offer, either by countering it or accepting it. Then you set the appointment, see the property and you can adjust your numbers accordingly after you see that property.

• 20:48Speaker 01

  And the reason why what you just described is so important is because you wanna avoid burning yourself out.

• 20:54Henry Washington?

  Yes.

• 20:54Speaker 01

  And if you're going to attempt to make appointments and view every single property that you have interest in before even making an offer, you're gonna spend one weekend doing that. And then you're gonna say, I'm not doing this anymore because you burnt yourself out. But what Henry just finished describing is pretty similar to what I do. And I could make 10 offers in a day in my sleep and never be burnt out.

• 21:15Henry Washington?

  You're also not burning out your agent when you do it that way. Cause your agent doesn't have to meet you at every single property.

• 21:20Speaker 01

  That's right.

• 21:21Henry Washington?

  It's a big pain in the butt. Your agent does need to write the offers, but you can have your agent set up a template for this format. So that all they have to do is click a few buttons every time you wanna submit an offer and not have to write it up fully every time. So I think this is great information for people. Well, be all right, we have to pause for one more break. But on the other side, Welby gives us more insights to how he's built his real estate portfolio.

• 21:43Dave Meyer?

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• 22:25Dave Meyer?

  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 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

• 23:10Dave Meyer?

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• 24:34Dave Meyer?

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• 24:50Henry Washington?

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• 25:34Henry Washington?

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• 27:02Henry Washington?

  All right, we're back. Here's the rest of the conversation with Welby a seller. All right, Welby, so you're buying the majority of your deals on the market. You still do some off-market deals. What kind of volume are you doing, let's say on a yearly basis?

• 27:15Speaker 01

  Well, at a peak, I was doing 20 to 30 flips a year. To be honest, it slowed down considerably, but the returns are astronomical. So that's why I say that it's not about the quantity of the deals. It's always going to be about the quality of the deals that you do.

• 27:31Henry Washington?

  You're saying you're doing less deals, but the deals are more profitable. Does that mean you're flipping more multifamilies or bigger properties?

• 27:37Speaker 01

  My business model is if it's a single-family property, I'm flipping it to sell. If it's a duplex, I'm flipping it to sell. If it's a three-unit or more, I'm buying that property to keep long-term.

• 27:47Henry Washington?

  So what do you think about investors who are wanting to do this and not put any money down? Like, how has that been as a growth strategy? Is that something you did typically?

• 27:57Speaker 01

  Well, I want to put money down.

• 27:59Henry Washington?

  Okay, why?

• 28:00Speaker 01

  I like the idea of putting money down because the strategy that I approach with buying these properties, I'm usually able to recoup all my money back within, on average, less than a year. But if I have to be in extreme eighteen months, nineteen months, I'm able to recoup all my money back. In the meantime, I've never stopped flipping, so I'm still generating money elsewhere. So the goal for me is to be able to acquire these properties, put as much money down as I possibly can, or even buy outright if need be, to then ultimately be able to generate enough cash flow that I'll be able to recoup all of my actual money out of it so I can get to a point of what they call an infinite return on my money.

• 28:40Henry Washington?

  You know, one of the things I like about you as an investor, Welby, is you do things the old-fashioned real estate way. And I think a lot of people try to accelerate things, right? They try to do more deals than maybe they're financially prepared to do because they're not putting money down. And then you get over-leveraged, or they're trying to find deals without putting in the time or effort or work that it takes to find the deals. And then what really happens is the opposite. You end up having to go really slow, or you end up putting yourself in a tough financial position. So, you know, I like that you take the approach of, "Look, I'm gonna buy a property, I'm gonna find value, I'm gonna put my twenty, twenty-five percent down,

• 29:22Henry Washington?

  I'm gonna add the value, I'm gonna pull my twenty to twenty-five percent out, and then I'm gonna do the process again." And if you can only afford to do one deal a year,

• 29:31Speaker 01

  That's right.

• 29:32Henry Washington?

  Doing it that way, that's okay.

• 29:34Speaker 01

  That's okay.

• 29:35Henry Washington?

  Because you're doing it in a safe manner that will allow you to, over time, be able to do more and more, right? You don't have to come out of the gate and do twenty deals in your first year. You can come out of the gate and do one or two, and then as you build up, you can do three, or five, or ten the next year.

• 29:55Speaker 01

  When I started out, I did exactly how you described. After the ten years of losses, I said, "Let me do this one deal. Let me do this one deal, let me do it right." And I followed the steps. I did the one deal, and I made twenty-five thousand dollars. I I almost, I cried like a baby. Cause I was like, I know I could do it. I said, you know what, let me do it again. And then the next deal, I made forty five thousand. Okay, well, be at work, let me do it again. And before you know it, I'm building up my team. I'm building up my own system, my own strategy. And then next thing you know, I started doing four or five deals simultaneously. Yep. You know, and then before I realized it, I flipped my way. And I had over a million dollars in liquid cash. I'm a guy from Brooklyn, New York, Queens, New York.

• 30:40Speaker 01

  I wasn't born with a silver spoon in my mouth. Then I realized that, okay, I'm making this money. But if I don't find a way to put this money somewhere that's gonna generate passively, I'm about to hit a brick wall. So I started taking that money, started buying me rental properties. But I said, I'm gonna approach it differently. The conventional way that most people tell people to do is find the cheapest way of acquiring the real estate. That could mean doing FHA, that could mean doing VA, that could mean doing a whole bunch of other different programs. And I found that it was dangerous for the majority of people. So I said, let me approach it differently. Any property I buy, especially if we're talking about long term, I'm gonna put down twenty to twenty five percent on the acquisition. But here's the big difference.

• 31:23Speaker 01

  Your five percent, three and a half percent you're gonna put down on that property is gonna be equivalent to the twenty to twenty five percent I'm gonna be putting down. It's the same amount of money, but we bought it differently. So now I don't have no intent of refinancing out. I got me a long term, thirty year mortgage that is set. Now, all I gotta do is make this thing beautiful. By the time I finish making it beautiful, I've already factored in how much I'm gonna be able to generate. Then I could time how long it will take me to recoup back that twenty five percent plus the rehab. And then, don't forget, Henry, we forced appreciated the value. So now we got the equitable increase. Your actual money that you put down is almost removed, if not already removed.

• 32:09Speaker 01

  And now you got this property for the rest of your life, if you choose to, giving you a net positive income substantially. And I just did this over and over and over again.

• 32:19Henry Washington?

  It's called Real Estate 101, man. I think there's a lot of distractions out there. People are trying to get super creative. Speaking of trying to get super creative, a lot of people are trying to get creative and get fancy right now because interest rates are high, because taxes are high and insurance has gone up. As we're in this cycle where the perception of interest rates are high. You know, I say the perception because history would tell you that these interest rates are pretty normal. So how has that impacted what you do? Are you still finding deals that cash flow in 2025 regardless of the interest rate?

• 32:53Speaker 01

  A hundred percent. If you'd like, I could break down a deal for you that I bought.

• 32:56Henry Washington?

  You read my mind. That's what I want to hear. Tell us the numbers.

• 33:00Speaker 01

  So this particular property, I'll give you an example of, I recently bought, I bought about eight months ago. I bought me a four-family property. Ironically, that four-family property is down the street from a six-family property that I own. That property actually was listed on the MLS. When I saw the property, I wanted to put an off on the property. The owner listed the property for a hundred and ninety-something thousand, if I remember correctly. And now I knew already that the property was worth at least four hundred and fifty thousand dollars. When I had my realtor reach out to the gentleman, the gentleman put in the description, he had no interest in hard money, no interest in FHA, because he knew that it would not be fundable because it was a distressed property, the condition of it.

• 33:44Speaker 01

  He only wanted cash. That's it. So it knocked out a lot of people in this industry. That's already happening now with a lot of people. That's why we want people to get themselves ready. So when I met the person, I offered him a hundred and fifty-one thousand, all cash, and I told him I can close in the next seven days. He jumped on it and he sold me the property. So now, the ARV, as Henry was describing a few moments ago, was the number one important question that you must determine because that's the starting point of an evaluation of a property. I already knew the property was worth four hundred and fifty thousand because I already own multiple similar properties in the area. I was able to negotiate the purchase of that property for a hundred and fifty one thousand

• 34:26Speaker 01

  and I was able to rehab that property for approximately sixty thousand dollars. So that meant that I was gonna be all in on this property for two hundred and eleven thousand. The hundred and fifty one thousand came from a home equity line of credit and the other sixty thousand rehab came from one of my American Express cards. I renovated that property. It took me about a month and a half to two months to get that property fully renovated. Upon completing the full renovation, I doubled back and I went to the bank for a DSCR loan. Now, for those that don't know what a DSCR loan is, that's what they call a debt service coverage ratio. So now, in a type of loan like that, they don't care about your credit too much. They don't care about your income. They care about the performance of the property.

• 35:10Speaker 01

  Now, the majority of people in a circumstance like that would have refinanced to max out what they could pull out of that property. So they would have taken over four hundred and fifty thousand dollars. They would have taken seventy to eighty percent, which meant they would have pulled out around three hundred and fifty thousand dollars on that property. With the interest rates today, the mortgage on a property of three hundred and fifty thousand in my area, because the taxes are pretty high, would have been about thirty-two, thirty-three hundred dollars a month. Now, the property is a four-family property. What I decided to do is I only wanted what it cost me, buying it and fixing it. So I got me a mortgage on the property for two hundred and six thousand dollars. So I pretty much got two hundred and six thousand dollars out.

• 35:51Speaker 01

  I still was left with about sixty thousand dollars in the property from the American Express card. The mortgage on the property today, only eight months ago, is two thousand six dollars per month. First apartment, I get fifteen hundred and fifty dollars.

• 36:05Henry Washington?

  True.

• 36:06Speaker 01

  Second apartment, I get fifteen hundred and fifty dollars. Third apartment, I get nineteen hundred dollars. Fourth apartment, I get nineteen hundred dollars. This property, after expenses is all paid, I'm netting, netting, everybody, netting well over forty-three hundred dollars per month, almost fifty thousand dollars per year. Since the time I've owned the property, I was able to recoup the balance from the cash flow that I was Was able to pay the American Express card down to zero. So for a property I bought eight, nine months ago, I don't have a penny of my own money in this property. I have a debt to the bank of two hundred and six thousand and a value of four hundred and fifty thousand dollars on the property,

• 36:49Speaker 01

  which gives me an equitable increase of two hundred and fifty thousand dollars that I can add to my wealth.

• 36:56Henry Washington?

  That is fantastic numbers. That's great cash flow numbers. I think what's important for people to hear about this is the reason that you're able to cash flow has nothing to do with the interest rates.

• 37:10Speaker 01

  Nothing.

• 37:10Henry Washington?

  And has everything to do with finding one of the two things that you mentioned is you found distress and underperforming, right? And in, in one of the situations, you were able to meet the seller's needs. The seller wanted a cash sale quick and you didn't care what that seller was asking. Cause if I recall, you said the seller wanted a hundred and ninety five K and you paid a hundred and fifty one thousand. And a lot of people are scared to make their offer because you essentially offered him forty thousand to fifty thousand dollars less than what he was asking.

• 37:50Henry Washington?

  And a lot of people see that they go, oh, well, he wants one ninety five. I couldn't pay more than one fifty. So it's not a deal. I can't, I can't. It's not a deal. I can't do anything. What a seller wants for a property has nothing to do with you or what you can pay. And we need to stop making decisions for other people. Cause what most investors do or what most people do is they say, ah, he wants two hundred. I can't pay one fifty. He's not going to take my offer. Why did you make that decision for him? You have no idea if he'll take that offer or not. You don't know what the most important deciding factor is. The difference between going direct to seller and going on the MLS when you find a deal is your access to the seller.

• 38:31Henry Washington?

  So when I go direct to seller, I can literally have a conversation with the seller and I can figure out a way to meet their needs. But when you're talking on the MLS, you rare. Really get to speak to the seller. You're typically dealing with an agent. And so the only way for you to truly find out what that motivation is, is for you to make an offer and see if they jump at it. And so don't make a decision for a seller that they won't want your offer. Try to piece together the best offer that you can put together for you. May not be money is the best thing that you can offer. What Welby said is, I'll offer you one fifty one, but I'll get you a seven day close. That sounds great to a seller who wants cash and wants cash fast.

• 39:16Henry Washington?

  I did something very similarly with a property that I bought here. Agent reached out to me and said, hey, this property is going on the market. This guy wants a hundred and twenty thousand for this duplex. It's livable. It will need some work, but there's two tenants in it. And I knew I wanted it and I knew what's the seller want. So what most people were going to do is they were going to shoot their shot. And then they were going to have a thirty day close period and they were going to do an inspection. They were going to do all this stuff that was going to take forever. I said, tell him I'll give him seventy five thousand in seven days. He took my offer because I wasn't going to inspect it. I knew I was buying some distress and I want to fix that distress anyway. So we paid seventy five thousand, had that property closed in seven days and started making me money from day one. So I want to make sure people, when you're making offers on the MLS,

• 40:01Henry Washington?

  you're probably going to have some competition, but think about what is it that you can offer other than money that might make your offer more attractive? I just said, sometimes you can do a quick close. Maybe you don't have that in your bag just yet, but what do you have? Could you offer earnest money? James Dayner does this. He will offer extremely high earnest money. He would make offers on properties where he would give them eighty percent of the money as earnest money. Meaning that they are pretty much saying, here, we're going to give you most of the money upfront. And then as long as everything checks out, then we'll close on the property. That made it very attractive, shows he's serious, right? So maybe you can say, I'll put ten, twenty thousand dollars down to earnest money. Maybe you can say, I'll give you ten, twenty thousand dollars of non-refundable deposit. If you're confident that you'll be able to close and to protect yourself,

• 40:45Henry Washington?

  what you can do is you can say, my earnest money or my non-refundable deposit does not go hard until we have approved. Inspection and then that gives you the opportunity to inspect that property. And then if something's crazy that you don't like, then you can back out without losing your money. But it still makes your offer very attractive because it shows them you're willing to put your money where your mouth is.

• 41:05Speaker 01

  That's right. Love it. Love it. Love it. Love it.

• 41:07Henry Washington?

  Awesome, man. Welby, this was, this was great information, man. I love talking to you about real estate because I, I love how you do real estate. You truly do real estate the right way. As you look to the future, man, as you continue to do real estate deals and grow your business, is there anything you haven't done that you're interested in doing or are you just going to stay the course?

• 41:25Speaker 01

  Honestly, I love what I'm doing. I, I love what I'm doing. I have people that try to give me other avenues to do. And you know what? There's so much more to eat on the table that I'm eating. Let me get my fill and then we'll see what will happen then. So right now I'm going to stay the course and do exactly what I'm doing and the method of what I'm doing because it's working.

• 41:45Henry Washington?

  All right, man. Thank you, Welby, for joining us on the show today. Thanks to everyone for listening. I am Henry Washington and we'll be back with another episode of the BiggerPockets Podcast in just a few days.

• 41:57Speaker 03

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