How to Capture the “Upside” in the 2025 Housing Market

How do you get higher rents, more appreciation, and bigger returns from real estate investing in 2025? It’s easy—copy the experts. They’re doing it over dozens of deals, so why not apply their same tactics to your properties? That’s precisely what we’re sharing in today’s episode—the “upside” tactics ANYONE can use on ANY investment property to create more cash flow, better equity upside, and make their future selves richer. Last week, we discussed the ten different “upside” investing tactics you can use in 2025 to boost your real estate returns. Today, we’re walking through six of them, in-depth, with investing experts Ashley Kehr and James Dainard. Ashley has been investing in rentals for over a decade, seeing basic properties become home-run rentals over time. James has made millions of dollars flipping houses with HUGE “upside,” he’s teaching you how to do the same, even if you’re only buying rentals. We’re walking through our favorite “upside” strategies and how to spot the properties that have multiple "upsides" for investors. Follow these steps, and in a few years, the properties you buy in 2025 could become your best investments yet! In This Episode We Cover: Why you CAN’T just focus on today’s rent prices/cash flow and how basic properties can become cash flow kings The “rocket fuel” James used to explode his net worth and real estate portfolio Hidden zoning opportunities that most homebuyers have no clue about (MASSIVE price appreciation potential) How to pinpoint the “path of progress” so you know exactly where to buy Why putting more cash down on a real estate deal is such an underrated move And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Ask Your Question on the BiggerPockets Forums BiggerPockets YouTube The Best Markets to Buy Rental Properties Right Now (2025) Get Fully Customizable Insurance Coverage for All Phases of Occupancy on One Monthly Schedule and Bill with NREIG Sign Up for BiggerPockets Momentum 2025 to Supercharge Your Investing This Year Grab Dave’s Book, “Start with Strategy” Find Investor-Friendly Lenders BiggerPockets Real Estate 1075 - 10 Hidden Ways to Buy Properties with Huge “Upside” Connect with Ashley Connect with James Connect with Dave (00:00) Intro (03:50) Make Your Future Self Rich (05:07) Which Properties to Buy? (09:20) 1. Rent Growth (13:24) 2. Value-Add (14:49) 3. Zoning Opportunities (19:11) 4. More Equity, Less Debt (22:14) 5. Path of Progress (26:33) 6. Learning (and Earning) (29:26) Find YOUR Upside Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1079 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.

• 0:05Dave Meyer?

  Welcome back to the BiggerPockets Podcast. I'm Dave Meyer, Head of Real Estate Investing here at BP. Today, we're talking more about designing your deals. Because the reality is, you're probably not going on Zillow and finding some perfect deal ready to go. You have to spend time figuring out what are good assets and how to maximize the performance of those assets over the long run. And I actually talked about a framework last week on BPRE, episode 1075. And to underscore this and help everyone really understand this, I am bringing on two expert investors, James Dainard and Ashley Kair, to talk more about it so they can share

• 0:46Dave Meyer?

  examples of how they use these strategies in their own investing. James and Ashley, welcome back to the show. Good to see you both.

• 0:54Speaker 01

  Thank you for having us.

• 0:55Dave Meyer?

  I'm so excited. I love talking about deals. So let me just recap a little bit, that I have these four big picture principles that personally I look for when I review deals right now. And I see them as sort of like playing defense. They limit my risk, they ensure that I can hold on to assets, and then I sort of look for long-term upside over the course of my hold period. And that could be a short hold or a long hold. So these are the four, and James and Ashley, just tell me if you think these are terrible ideas, but this is sort of how I'm thinking about my investing, and I want to get your feedback on it. So, number one, I'm looking at this situation in the market and

• 1:35Dave Meyer?

  seeing that a lot of good assets are sitting on the market a little longer right now. That's just, there's been a little bit of a slowdown, and I'm trying to use that to my advantage, to find things that normally were being snapped up super quickly. Number two, I want to buy in good markets with strong fundamentals, nothing different there. Number three, my focus is on breaking even in year one and making sure that's sort of the defensive piece where I don't need to break even day one, but for me, as an investor who's somewhat conservative, I want to make sure that I'm not coming out of pocket every single month by the end of the year. And then, I need to find ways to really accelerate my performance after that first year in the second, third,

• 2:19Dave Meyer?

  fourth, or fifth years. So those are sort of the big picture principles. I'm just curious, James, I'll start with you. What do you think of this framework that I'm using here?

• 2:29Speaker 02

  Those are all really good core principles and I think they're principles that you're gonna have to use in today's market. You know, I think location, location, location right now. Cause cash flow isn't really there across the nation. There's some markets that do cash flow better, but where you get the most upside in real estate really isn't from the cash flows, from the appreciation or creating value. And when you're buying in locations that are growing and populations increasing and the fundamentals of the economy are growing, that's where you're going to get that jolt in equity. And I speak from that from firsthand experience, right? When I started investing in Seattle back in 2005, it wasn't really the powerhouse of tech it is today. And so by buying in the right location of Seattle,

• 3:11Speaker 02

  it's grown dramatically. And I think resetting people's expectations of breaking even, not paying for an asset is always a better call because you don't want to have this cash suck when you're buying a rental property.

• 3:24Dave Meyer?

  Totally.

• 3:24Speaker 02

  But you have to have the upside because buying and breaking even also sounds really boring. And so there has to be that third upside of, okay, how do I create value? And eventually your cash flow will improve when rates fall, you're going to naturally create cash flow. But then there's the kicker and where you're buying based on location, zoning, and path of progress that can really change your whole career as a real estate investor and where you're going to be in five and 10 years.

• 3:50Dave Meyer?

  So Ashley, how do you look at your own high level strategy in trying to find deals now, but creating value for the long term?

• 4:02Speaker 01

  When I first started, my whole goal was to maximize cash flow. I wanted to pay off my student loans. I wanted to be financially free, all of that. But if you have a great W2 job, you are comfortable where you're at and you can leave some money in the deal, you can maybe not get any cash flow or just very little. And you plan this out where, okay, every year I'm going to buy another property. That is my investment. I'm going to buy, then I'm going to buy. But then after 10 years, you have a plan that you're going to sell one, then sell one, then sell one. And after that 10-year period, you've got all those tax benefits from those

• 4:43Speaker 01

  properties. You've had appreciation. You now have equity in these deals. You've had mortgage pay down. And then you start and plan out like, okay, I'm going to sell one. Now I've just gave myself $100,000 payout this year. Then the next year, sell another one. And that $125,000 payout this year to live off of. So if you have the opportunity to be a long-term play investor, you're going to have a huge advantage.

• 5:07Dave Meyer?

  I'm curious about this, this first principle I named, James, because you look at a ton of deals. I am seeing better assets sit on the market longer right now. I'm curious if you're seeing something similar in Seattle.

• 5:19Speaker 02

  You know, your traditional Class A assets where people are looking, hey, I want to buy this property. I'm in a great location. It's a good building. It's got all the amenities you want. The stuff everyone wants. That stuff is sitting longer because it's still priced high. They haven't made any adjustments because the seller's not in a rush. But you have to define, I guess, what a good asset is. My definition of good asset is something that's falling apart that I can fix and create, create value in.

• 5:46Dave Meyer?

  You're insane is the, is the answer.

• 5:49Speaker 02

  I like it because it's, we can create margin, right? And that's the only principle that I think is missing off the list is you have to earn your income. You can't just buy it, wait on it and go. If I'm going to break even, that's okay. Even if I have to pay a little bit for that property and I have the reserves to do it, that's okay. But there has to be an upside and, and create the value add. I'm all about value add right now. Create the value add, put it in the portfolio.

• 6:12Dave Meyer?

  Totally. My point is just like, I want to be able to hold on to that asset and within a year not have money bleeding. At the same time, you have to have these upsides. Value add, one of them. You need to be able to do rent growth, path of progress. Like, I, I would not be in this business if I was just breaking even of cash flow. But I think it's just a good basis to create something that's low risk so that I can get in the game. Like I sort of put my ante in and then I can hopefully hit a couple of these bets I make on upsides over sort of the next several years of my portfolio. Ashley, I want to ask you, because you know, your market just got named hottest market by Zillow,

• 6:54Dave Meyer?

  second year in a row. You're now even a bigger celebrity now. And I'm curious, like, is this possible or harder for you? Because like, can you even find good assets in a market that is still as competitive as the one you're in?

• 7:08Speaker 01

  Well, I spend a lot of time looking at comparables, like James has taught me. You have to look at a wider radius. So you're spread out with your data as far as you're looking. Like in Seattle, you can look in a block, in a little neighborhood, and you can get a bunch of comps. But like, for us, like, you are spread out probably with through five different towns, if not more, in some of these rural areas. So you really have to start comparing property tax rates. You have to start comparing school districts, things like that. For the property I'm sitting in right now, a comparable was like 15 miles away from here, like not even somewhat close, because there's not a lot of sales that happen out here, not comparable

• 7:52Speaker 01

  acreage, things like that. So that's really one thing that if you are going to invest, like outside of the city, you really have to understand what the appraiser is going to look at for comps. And so I think when you're looking at the market and you're really trying to decide if you can get a copy of appraisals from in that market and look and see like, what kind of comparables, how far appraisers going out to find comparables, things like that, that can be super helpful in finding, you know, like, this house is actually going to perform well, because I know what comparables appraisers look for in this area.

• 8:29Dave Meyer?

  All right. So we've talked a little bit about the high level strategy that I'm at least personally using to find deals. But one of the big principles of this is that you need to find upside to really supercharge your deal over the hold period. And I have 10 different upsides that I'm going to share with you right after this quick break. Before we go to the break, I do want to remind everyone that we are doing something really cool at BiggerPockets called Momentum. It's our eight week virtual investing summit, starting February 11. And anyone who wants to sign up, get tickets to this, you're going to get access to investing experts like Ashley, James, and myself, as well as mastermind and accountability groups. It's going to be super cool. If you want to grab a spot, go to biggerpockets.com/summit25.

• 9:15Dave Meyer?

  We'll be right back.

• 9:17Dave 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. And with loan-to-value options up to 80%

• 10:02Dave Meyer?

  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.

• 10:16Henry Washington?

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• 11:01Henry Washington?

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• 11:16Dave Meyer?

  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. 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.

• 11:59Dave Meyer?

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• 12:41Dave Meyer?

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• 13:00Dave Meyer?

  We're back on the BiggerPockets Podcast with Ashley Kair, James Danner, talking about my upside framework, where I am buying deals that work pretty good today, but are going to be excellent home run type deals over the course of my hold period. We've talked about the high-level strategy, but I want to read to you sort of the 10 different ways I think about adding upside to deals. So number one. One is rent growth. Two, we have value add, owner occupied strategies, rent by the room, cash purchases, path of progress, zoning upside, learning, buying deep and creative finance. I want to go through each of these with you guys and just talk about which ones you think

• 13:45Dave Meyer?

  work for you. So it sounds like value add is something both of you are using. But first, I just kind of want to talk about rent growth because one of my just like underlying macro philosophies right now is that we've had two or three years of slow rent growth, but it's going to pick back up. With things being as unaffordable as they are in the housing market, I personally believe a lot of people who would be buying are going to be renting in the future. And so I just think finding properties that are going to be in high demand from renters and rents are going to go up are great things to target right now. Ashley, have you thought about this strategy at all, especially in a hot market like yours?

• 14:22Speaker 01

  2017, I bought a duplex and it was the first property that I had purchased that was ready to go. It needed nothing done to it. So I rented it out and I cash flowed about $200 to $300 per a month. And now, holding that property from 2017 until today, my rents have grown so much that I'm cash flowing a little over $900 now on that property just from renting it out, sitting on it, and I've done nothing. I luckily haven't even had to do a capital improvement on it yet. I'm sure something's coming soon now that I say that.

• 15:00Dave Meyer?

  Yeah, your toilet just broke.

• 15:05Speaker 01

  Well, those little maintenance things, those come up all the time. But yeah, so like, that was a really big mind shift for me the last couple of years is like, wow, these properties, these duplexes that I brought like weren't great home run deals when I bought them. They generated a little bit of cash flow that I actually used to pay off my student loans, but now that I've held them. I've seen that rent growth potential and now the cash flow is way better.

• 15:32Dave Meyer?

  A hundred percent. It's not going to happen everywhere, right? You know, not every market, not every niche within a market is going to see that rent growth. But doing your analysis and understanding where there's going to be rental demand can be really beneficial to you. Cause I've had similar situations, Ashley, in my portfolio in Denver, just doing very little to the properties. And as James said, just being in a great location, you can see rent growth. And I really encourage people in, in this type of market condition where cash flow is hard to find, to think about the long-term of the cash flow. Cause that's sort of why I was saying, if you could break even on cash flow in year one, it's just going to get better in year two, year three, year four.

• 16:15Dave Meyer?

  And I know it sounds like a long time from now, but five, 10 years from now, every deal that you buy now is going to be offering good cash flow. If you're buying it right. So that's why I just think this is such a big upside.

• 16:26Speaker 01

  Especially too, if you're locked in at a 30-year fixed rate mortgage, you know exactly what your principal and interest is going to be for the next 30 years. Insurance and property taxes may increase, but you know, you, you know, pretty much what your biggest expense is going to be going forward. And that's really what has helped me is putting those types of mortgages on where I have that fixed rate. So my income is increasing, the rental income increasing more than the property taxes and the insurance and you know, other bills that come along with the property. So that's like a big thing too, is how you're able to finance the property and get into it.

• 17:03Dave Meyer?

  Okay. So that's one upside is rent growth. The next one I mentioned is value add, which James, this is basically your middle name. So tell us a little bit about why you think value add is so good, particularly in today's market.

• 17:17Speaker 02

  Well, I do think rent growth is going very stable.

• 17:20Dave Meyer?

  Yep.

• 17:20Speaker 02

  Going forward. Rent has shot up a lot. I think it's a steady growth even with job growth and it will always be steady. But how do I take my portfolio and put Rocket Fool in it? And it comes down to value add and that is usually going to be buying deep, creating value with a construction plan and creating value, the BRRRR method.

• 17:43Speaker 02

  Or buying in the location where I can invent the return. Because when the market gets flat, you have to look at different ways to invent the return. So it's all about buying value and zoning upside because you can create high cash flowing properties with a little bit of work. And so that's where the kicker is in this market and there's so many opportunity because people just look at things the same, right? Like, can I buy this in cash flow? No, I can't. I'm gonna move on to the next thing. That's why I love value add. You can manipulate the deal. It takes work, but sometimes it's not as much work. It sounds like a lot of work, but I'm buying it. I'm doing paint carpet, cleaning up, selling it. I'm hiring a builder to build it in the back. I'm not building it.

• 18:23Dave Meyer?

  Yeah.

• 18:23Speaker 02

  They're taking it through the whole process. Even though it looks scary on paper, it's actually very systematic and easy and a lot of people can do it.

• 18:29Dave Meyer?

  Definitely. So we've now talked about rent growth as one of the upside strategies you can use. We've talked about value add. Let's just go, we're skipping around here, but let's go to the zoning upside because you mentioned this, James, and I think this is one of the more exciting things that's going on in real estate right now. You've probably heard, you know, there's housing shortages throughout the United States. It's super expensive and a lot of cities right now are looking for ways to increase density and to increase building and they're making it easier for real estate investors, for real estate developers to add units, whether that's taking single family zoning and turning it to multifamily zoning, allowing single family lots to put on DADUs, which

• 19:13Dave Meyer?

  just means detached accessory dwelling units, like putting a mother-in-law suite or like a kind of tiny home in your backyard. And so these are, I think, are some of the more exciting things right now because you're having the opportunity to ideally buy something that's, you know, again, break even this year, but has this massive potential for the future, for redevelopment, for adding capacity. And I just think it's something I've done successfully in the past, even before the market was kind of telling you to do this, but at least to me, this just seems like one of the things that's going to have huge tailwinds over the next few years because cities and governments are really supporting it.

• 19:52Speaker 02

  Buy list in Washington is looking for something they call RSL lots. Cause they're bigger lots and this is where you can actually add a bunch of cottages to your site. And you can add a bunch of units zoning upside will change everything in a deal. So if I buy a house right now for I'm looking at one for 450 grand. It's going to rent for 2,500. It needs a hundred grand in work. That's not great cash flow and I'm going to leave some cash in this deal. Because I can add four to five cottages on the backyard of this property.

• 20:22Dave Meyer?

  Wow.

• 20:23Speaker 02

  And I wouldn't want to do it today, but in five years, I'm definitely going to want to look at doing it. And so by buying this property, leaving some cash, not making a great return. I can take a three, four percent return on this deal for the next four years. Because I have 600 grand in upside just in the backyard and that's if I don't develop it. I just sell the lots off.

• 20:41Dave Meyer?

  Nice.

• 20:42Speaker 02

  I then can take that, trade it out for something else. And that's why that's so impactful. And today the dirt's not worth much, but you want to look at path of progress. What is running out of units and everything's getting dense. This is more wide. This will be the next spot.

• 20:55Speaker 01

  James, your strategy right now seems to be a lot around permitting and zoning. So for an investor who's never looked at it this way, how did you even know this was a thing? That this was a zoning for cottages? What's the best resource to find this information?

• 21:11Speaker 02

  The best resource is just talking to your city. They have zoning maps on almost every county and city and they'll explain what the zoning is. But the real key to this is to not buy it when it changes. Because now everybody's looking at it. There's right now a bill in Washington right now that hasn't been approved yet, but it's coming. That you can now be able to take a single family house, knock it down, put four cottages on. And you don't even have to condoize them. They're going to allow you to short plant them out. If that bill passes, a single family house bur property is going to go up substantially in value 20%. And so I pay attention to what's the housing bills that are going through, reading through it. And it's actually very simple, even right before I was checking on the bill.

• 21:55Speaker 02

  You just Google your city zoning proposed changing, housing plans changes. And you can see the RCWs and bills that are coming through. Now it takes nine months to get there, but if you can buy before it gets there. That's where you find a gold mine. It's about getting there before everyone else does. You don't want to go when everyone else is rushing in because then you pay way too much for it. And so really pay attention, what's going on in your legislation? What's going on in your backyard? What's going on in the city that you're investing in? Don't listen to what everyone else is doing in other cities unless you want to go there. Focus on where you are.

• 22:27Dave Meyer?

  That's great advice. And in a lot of cities, it depends on your city. You can actually subscribe to newsletters for these types of things where they'll just email out changes for you. And you can just stay on top of these things or subscribe to even newsletters that are, you know, if you live in a big enough metro, sometimes there are newspapers that have real estate sections. These are just like easy things that you can do to stay on top of zoning and, you know, infrastructure changes, that kind of stuff. I do want to mention, because you know, we're really honing in on zoning, path of progress, rent growth, value add as upsides. But you mentioned one that I just want to mention quickly, which is that you said you were leaving more cash into a deal. And I totally understand that not everyone can do this right now. If you're maybe a little bit further along in your investing career.

• 23:12Dave Meyer?

  But I think that putting more cash down in today's day and age is a really good way to hold on for some of these upsides, right? Because like James was just saying, you could buy a great asset and maybe just get it to break even by putting 30% down, by putting 40% down, by putting 50% down. But that upside that he was talking about is so valuable that it's worth putting more money down. And so that's just another one that I wanted to call out to people as a potential upside for making your deals really perform over the long run.

• 23:46Speaker 02

  And for those who don't have the cash, that's okay. I don't like leaving money in deals. I really don't. I will only do it if I see this huge upside down the road because then I'm looking at what's my annualized return on five years is really good. That's where, you know, for your friends that are more passive, that aren't buying real estate, have them bring the money in on your deal and partner with them. And then you guys get a share in that upside. I mean, Dave, if I came to you and said, hey, look, do you want to leave 100 grand in here? And in five years, I feel confident, here's my performance, here's my data. We're going to make 600 grand on this. And you're going to make 300 of the 100. That's a 3X on your money, right? And so just, you know, talk to people, if you really do see the value, that's the thing about zoning.

• 24:29Speaker 02

  It can give you the kicker that can really pop the deal. And then having a partner in, you both do well.

• 24:35Speaker 01

  And then also think about it too, like what if that bill doesn't pass? You know, that doesn't go through the proposed plan or whatever is you still have a salable asset. You still have a property that you've held on for three years or whatever it is that hopefully still had some appreciation into it that you can sell it and recoup some kind of profit off it, hopefully after holding it for several years.

• 25:01Dave Meyer?

  Yeah, that's a great point. You definitely need to consider the risk. And I just think this, this, this is sort of the mindset, right? Because James, you're saying like five years, look back, look at the risk, look at the potential reward and think about this, not just about this first year of your ownership, but think about it over three years, five years, and how you're going to extract that upside and figure out the right place to place that money. All right. So we've already talked about rent growth. We've talked about value add. We've talked about lower LTV or cash purchases and zoning upside as four different ways that you can supercharge your deal over the long term. We do have to take a quick break, but we'll go over the remainder of our upsides when we come back.

• 25:42Dave 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 and Cyber Monday pricing through December 14th.

• 26:27Dave Meyer?

  So snag Hostinger's services at their lowest prices before the sale ends. Create your website today for just a dollar 99. Go to hostinger.com/realestate and use code REALESTATE for an additional 10% off Black Friday and Cyber Monday pricing.

• 26:43Henry Washington?

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• 27:27Henry Washington?

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• 27:43Dave Meyer?

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• 28:27Dave Meyer?

  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.

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• 31:01Dave Meyer?

  Welcome back to the BiggerPockets Podcast here with James Danard and Ashley Kier, talking about how to add upside to your deals. All right, we've touched on this a few times, but I want to come back to this idea of path of progress. If you've ever heard of this term, it's basically the idea of finding an area within your market, within your city, that is going to see some tailwind, some benefit that you didn't necessarily create. Like, we talked about value add, which is value that you are generating. You are doing the work to improve the value of that property. But if you are to buy in the right area within your market, and people really want to live there, or there's investment going in that area, the property value, or your rents, might go up, sort of because of things outside of

• 31:44Dave Meyer?

  your control, but because you bought in the right area. And I love this idea. I think it's probably one of the most powerful forces in real estate investing. James, I mean, I know that this is something you focus on quite a lot.

• 31:58Speaker 02

  You know, I think sometimes people overthink path to progress, too. You know, like, right now, they're putting a big chip plant in Ohio. So people are like, oh, it's gonna grow, it's gonna grow, which is probably true. But you can get some really good accelerators just by amenities and improvements in your area. And paying attention to what's going on in the planning division of your local city will tell you a huge story. Adding a grocery store, improving your walk score, the livability of somewhere, will naturally increase value, increase rents. I personally bought a 12-unit building in an area I don't typically buy in. And it was honestly a complete nightmare building I had to buy.

• 32:34Dave Meyer?

  If you're calling it a nightmare and a lot of work, it would be terrifying.

• 32:38Speaker 02

  It was all the bad things that could have happened on this property, including the pandemic hit. It all happened at one time. But when I bought it on paper, everyone's like, you kind of overpaid for that. But what I did know is the light rail was coming in in three years in that area. And that's going to improve the livability, because now people in this area of Tacoma can now get to Seattle commute, and they can live in a much more affordable place, but still get to their job in an easy way. So when I bought that building, I thought the improved value was going to be like 2.4 when I was done. Now, I'm about ready to list this building. For 3.3 million. The values and then I'm going to 1031 it into another building. And so path of progress isn't just about zoning increases because you can kind of overthink that.

• 33:20Speaker 02

  It's like, what is coming in? If you have a grocery store, a Starbucks, if you see any of those major corporations planting a flag in that neighborhood, that means there's growth coming in and the people that researched that spent a lot more time researching that market than we did. And they're spending big money and just really looking at where is the infrastructure coming? I love watching that, especially in Seattle as path of progress. Cities are getting crowded. There's all of a sudden, you know, big grocery centers going in. The schools, the libraries, are those things getting massive uplifts, improving the overall experience for the community? Those things are path of progress that can really jump your rent and jump your values. Because now people want to live there rather than go, I might want to be in a better location.

• 34:02Dave Meyer?

  Yep, absolutely. When you're living in a city, just paying attention, same thing, looking at the newspaper. Understanding where the government is spending money is so important. I did something actually for primary residents, just like you, James, where I, they were building a light rail in Denver. And I found out they were actually removing a full street from the city and turning it into a park. And I was able to buy a property right next to that. I didn't know that part of building a light rail means that for six months that they have to test the horns every 15 minutes. For, uh, for six straight months, all hours of the day. And my wife and I lived next to that for six months. So that part was not as fun.

• 34:42Dave Meyer?

  But I think literally tripled in equity over the course of the holding it. So it was definitely worth it. There was upside, downside to my sleeping pattern. But we were like trying to buy like those acoustic soundproof curtains. They did nothing. Not the best, but uh, obviously, as you're saying, there's a lot of opportunity in doing those types of things.

• 35:05Speaker 02

  And you know what, Ashley? The new Buffalo Stadium's coming in.

• 35:08Speaker 01

  Yeah.

• 35:08Speaker 02

  Oh. I am there.

• 35:10Speaker 01

  But it's right next to the old one.

• 35:12Dave Meyer?

  Oh, so the property is already too valuable.

• 35:14Speaker 02

  But if the Bills win the Super Bowl, the fans are going to go crazy. The new AEM values, they're shooting up. Bills win the Super Bowl, I'm buying in Buffalo.

• 35:23Dave Meyer?

  All right. Wow.

• 35:24Speaker 01

  Okay, we're gonna hold you to that.

• 35:26Dave Meyer?

  Okay, we should absolutely see this. All right. So we've talked about some of the biggest upsides I see rent, growth, value add, path to progress, talked about zoning upside. There are a couple that we won't have time to get to today, but I'll just mention them. I still think owner occupied, great strategy upside. If people want to do house hacking, James is actually helping me do a live in flip. Another really good upside that's going to have huge tax advantages and just advantages all over the place. If you're looking for cash flow, co-living or rent by the room, if you have the right property management infrastructure, that's some good upside. The last one I wanted to mention though, this is an upside that I don't think many people think about, but I think is learning.

• 36:09Dave Meyer?

  I think in this type of market, if you are able to find a deal that is solid, I'm not saying buy a bad deal, but if you can buy, find a deal that is solid and use it as an experience to learn, to get better, I think that's as valuable an upside as some of these other financial ones. I don't know how you guys think about it, but I'm looking at this like live in flip that I'm doing with James. It's just like, even if I broke even on it, I'd be happy about it because I'm learning a skill as an investor that I don't currently have. Do you guys ever do that, like buy a deal just knowing that it's probably going to be just okay, but hoping that it's going to sort of catapult you into future deals?

• 36:46Speaker 02

  Yes, you have to push yourself. The only way I can do what I do today is all the mistakes and the hard lessons I've learned in the past. And every hard lesson, if you pivot your business, you will accelerate through. You always got to push yourself, but you want to take good steps. Don't just go from A to Z, go what's A to B, what's next, like what works for you today? Like if Ashley's doing flips and burrs really well right now, that's buying property on a market, creating value. Well, maybe the next step is bigger apartment buildings with value add, right? Because it's the same concept, a little bit bigger dollars. And so just, just take logical steps with what you're doing now. And that's how you prevent a hard lesson, just steps at a time.

• 37:27Speaker 01

  Yeah. And I think too, like just doing that one deal makes you learn a lot about yourself as to like what you like to do and what you don't want to do. So when I first started, I was like, let's accumulate as many units as possible. And now I realize I really don't like to work. Like I want to maximize. You know, every investment, I don't, I don't want to be James Dayner chugging 30 rock stars in the morning because I'm a hustler. Like, I am okay with doing one to two flips a year. Like, that actually is like, perfect for me. But it took me a while to get to that because I was like, in acquisition mode. So I think you like, learn along the way to what you really like and

• 38:08Speaker 01

  what you don't like to do, too. And that really helps you develop what skills you actually should be working on and what things you should be outsourcing, or like, completely avoiding.

• 38:21Dave Meyer?

  Well, thank you guys so much. I think this has been a really fun and interesting conversation. And just as a reminder, the, the general idea, and you don't have to agree with this, but my general idea these days is like, find this deal, find great assets in good neighborhoods, try and make them work, don't expose yourself to too much risk. But find two, three, ideally four of these potential upsides for every deal. Like, find a deal that is going to cash flow within the first year and break even, but you have good potential for rent growth, you're able to add value, maybe there's a zoning upside two or three years in the future. And not every one of those upsides may hit, but if you buy deals that have like, all of these little potentials,

• 39:02Dave Meyer?

  one or two of them are gonna hit and you're gonna have a really good deal. And so, I've found this framework really helpful for myself in pursuing deals right now in 2025, and hopefully it works for all of you. Ashley, thanks so much for joining us.

• 39:16Speaker 01

  Thank you for having me.

• 39:17Dave Meyer?

  James, thanks for being here, man.

• 39:19Speaker 02

  This is great. Ashley's like my original BP host that got me in, so.

• 39:23Dave Meyer?

  I thought this would be fun. I don't think the three of us have, have done a show together before. So this is great.

• 39:27Speaker 02

  No, and we've all done deals together.

• 39:29Dave Meyer?

  I know. We, we got through this whole episode without mentioning how James made Ashley and I money.

• 39:35Speaker 01

  Amazing deal.

• 39:37Dave Meyer?

  Yeah, but well, maybe next time. We'll have to do this one again, but we'll talk about that deal.

• 39:41Speaker 01

  Yeah.

• 39:42Dave Meyer?

  But thank you both again for being here and thank you all so much for listening to this episode of the BiggerPockets Podcast. We'll see you next time.

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