This week’s question comes from Scott (@hotdads1) through Tony’s direct messages on Instagram! Scott is asking: How are expensive properties profitable? Is it a mindset shift to buy expensive properties, or should I look in cheaper areas? Should I purchase in a quickly appreciating market? 

This is a very 2021-type question. We’ve seen numerous markets around the United States (and the world) see massive appreciation over the past year and a half. Now, real estate investors wonder if it’s even worth pursuing deals on the market. Although prices may be higher than they were before, you still have numerous options when trying to purchase a profitable rental property.

Here are some suggestions:

Price becomes irrelevant when looking at cash on cash return and true cash flow

Look at creative financing solutions (like FHA loans) to close on a home with low money down

Calculate your numbers for the long term to get rid of any short-term price dropping fears

Stop looking at past prices and ask: “Is it a good deal today?”

And more in the episode…

If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE).

Links from the Show

Real Estate Rookie Rookie Facebook Group

Real Estate Rookie Youtube Channel

Scot Morris's Instagram

Rookie Podcast 109: From Sleeping in His Car to Multi-Unit Landlord & The “Nomad” Strategy

Check the full show notes here: https://biggerpockets.com/rookie112

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Releasedatum: 11-9-2021 08:00:00