there’s way more demand for single
family homes than there are homes it’s
it’s it might take 40 offers to get to a
deal right now it just might but if
you’re disciplined and and you
underwrite and you make sure not to
compromise just to try and force the
deal to get done I think you you’ll
still be able to find stuff and then if
and when conditions do improve you’ll be
in such a better position because
Welcome back to our special podcast
series The 20-minute Investor where we
bring you actionable nuggets and
insights from our real estate investing
journeys in bite-sized 20-minute
episodes i’m Aaron Amin my wife and I
built a portfolio of eight cash flowing
rentals across three states while
working full-time and raising a young
family and I’m Nathan i’m a husband
father a tech executive who built a
portfolio of cash flowing rentals across
two states from over 2,000 miles away
together we co-founded the Remote Real
Estate Academy where we coach investors
on how to build their own portfolios of
cash flowing rentals from anywhere in
the world today we’re going to talk
about one of the more commonly debated
topics in real estate is the single
family long-term buy and hold strategy
still viable in 2025
it’s a loaded topic let’s discuss what
do you think is it dead should we sell
everything and move on yes yes it’s dead
okay well we’ll just leave it at that
two two minute podcast instead of 20
minutes i guess it depends on how you
look at it and what you’re trying to do
i understand why saying that is
relatively common place today and if you
look at it I think from uh interest
rates can you get something to cash flow
all that stuff much harder but then
there’s also the other lens I look to
look at this through is that if you just
look at purely supply and demand there’s
way more demand for single family homes
than there are homes so on the supply
side so that alone basic economics I one
could argue quite the opposite it’s
pretty far from being dead it’s just
maybe more work to get something to
pencil out I guess or to get the numbers
that you’re looking for but no is it
harder yes i would say it’s harder than
it was a few years ago because we’ve
been in the game for a while now is it
dead i don’t think so outside of the
teaser answering yes but what’s your
opinion yeah I think harder is
definitely accurate dead definitely not
right just because you have to put in
more reps and be more disciplined and if
you exercise discipline and you put in
the reps and you focus a little more on
the inputs try not to get as emotionally
attached eventually you’ll land on a
deal i mean that same principle would be
true in a market with 3% interest rates
but you might have a little more
competition i would argue that right now
a lot of people are losing confidence
losing faith and getting out of the game
or you know for the people that are
looking to be new entrance there’s less
people that are rushing towards this
right now i would say there’s there’s
good and bad the bad is that interest
rates are have been high for a few years
and there’s not really any indication in
the near term you know 6 to 12 months
that that’s going to change so what do
you do you adapt to the new reality we
always talk about we have a couple tools
we use for quick underwriting and I
think the biggest shift that people have
to make is to instead of anchoring to
the list price every house every
property that you look at you have to
come from the perspective of what’s the
max allowable offer that I can make for
this to meet my goals and just detach
yourself from the fact that that’s maybe
it’ll be offensive to whomever you make
that offer to but if you never make that
offer then quit complaining about it you
know it’s it’s it might take 40 offers
to get to a deal right now it just might
but if you’re disciplined and and you
underwrite and you make sure not to
compromise just to try and force a deal
to get done I think you you’ll still be
able to find stuff and then if and when
conditions do improve you’ll be in such
a better position because if you bought
something that can pencil at 7.75%
interest rate then you know obviously
down the road when you pay that down a
little bit property values appreciate a
bit and you go to refinance into maybe a
more favorable rate then you know things
things could improve down the road 100%
yeah it’s just more work and was it I
think it’s Michael Zuber who said you
were talking about 40 offers before you
get one and I think Zuber said and he’s
probably said this several times but
every no it gets me closer to the yes so
you do 40 and maybe it’ll be the 41st
but every time you get rejected you
you’re that much closer to the yes so
it’s not a bad thing and it’s good
practice is learning to interpret we’ve
talked on this 20-minut series a few
times about buy box and being becoming a
master of a specific area or zip code
you can only become a master by getting
reps in analyzing and making offers i
think sometimes people’s funnel stops
before the actual making of the offer
people conceptualizing about this and
learning about it and saying “Oh on
paper in my little deal analyzer I see a
green light that I could make 200 bucks
if I bought it at this price but there’s
no way they’ll accept that price so they
just move on to the next property.” You
got to actually put the offer out
despite how uncomfortable it may feel
and and if you’re not willing to do that
then yes it will be a very challenging
environment to find to find good deals
right now yeah and we talked about this
for me it was also a mindset change
whereas when we bought our primary
residence it’s an emotional purchase
because it’s your home your nest for you
your wife your kids all that stuff it’s
absolutely not the case when you’re
buying a a rental you’re you’re looking
at it purely from a very cold
mathematical numbers perspective it
needs to work on quote paper to get the
returns that you’re looking for and from
that standpoint it it helped me at least
just not worry about what what the
seller on the other side might think
it’s here’s what I can offer and here’s
what works for me to get the numbers I’m
looking for and if that doesn’t work for
the seller then that’s fine it’s okay
they say no and we move on to the next
one and I think in most places right now
sellers don’t have a ton of leverage
especially a lot of the people that
enter our program or our orbit are kind
of come from similar cloth of us where
we lived in high cost of living areas
where we couldn’t afford rentals in our
own market but if you take that type of
income from those high cost of living
areas and the savings that people gain
in their high-income jobs and you
translate it over into an Ohio or a
Georgia or a Indiana you can make those
dollars stretch further and what you
might be able to do is I I know a lot of
people love to leverage themselves to
the gills but if you put 35% down on a
property you might only need that might
only be $50,000 to do that and get into
a good property that mitigates the
impact of that high interest rate
probably allows you to stabilize quicker
and get into a more comfortable position
with your cash flow and then again you
have maybe an eye on the future that
four or five years from now you’ll
reevaluate if interest rates improve and
the value goes up maybe you can
refinance and pull some of that money
out so I know a lot of people like to
leverage as much as they can or they
like to cycle their their cash as
quickly as they can and I understand why
but we have to probably meet the market
where it is and again as we’ve talked
about a hundred different times and we
will continue to talk about make sure
it’s mapped to your long-term goals and
objectives so I I think it’s a case by
case thing but there are different ways
to make things work in this market and
it’s not always just based on your
traditional offer with exact 20 to 25%
down yeah and I think that remains true
all the time the markets whether it’s
supply and demand inventory of single
family homes or interest rate or loan
environment or whatever you’re never
going to have two days or two periods of
time where the whole of quote the market
is going to be exactly the same so you
have to be flexible nimble and have a
pretty comprehensive toolbox to be able
to approach it and make it work
regardless of what the environment’s
like maybe we’re biased i don’t know
well the the operative word is long-term
long-term buy and hold right short-term
buy and hold where you could argue that
you and I got lucky it’s it we had some
tailwinds behind when we started
investing and I I would not argue that
case right in some cases I invested in
Las Vegas 2017 to 2019 and they had a 40
to 50 to 70% in certain areas run up in
property values during that time that’s
not something I would ever bank on
happening again but we did benefit from
that for sure if you are doing this
strategy the idea is that it is
long-term and maybe you’ll refinance
somewhere down the road when your return
on equity which I’ll explain that in a
second but when that gets low enough
depending on your strategy you might
make a decision that you want to access
that equity and roll it into a future
deal but the idea is that things take
seven 10 15 years to play out in order
to be able to do that with this specific
strategy there are plenty of other
strategies that move faster but they all
involve usually more risk certainly more
time and and in a lot of cases more more
skill too so that’s that’s additional
effort that you have to put into your
personal development your network your
systems all that stuff whereas long-term
buy and hold which is what most of the
people listening to this are focusing on
you really can get that to this 20
minute a day thing we always talk about
100% what’s return on equity yeah so
this is an interesting when I talk about
those Vegas houses for example we bought
them and they appreciated quite a bit in
a pretty short amount of time so what
happened is even though these houses
were cash flowing well the amount of
equity that we had trapped in those
deals if you kind of rerun it’s almost
like rerunning a cash on cash analysis
based on your equity position and say
okay if I have $200,000
of equity in this property but I’m only
making $6,000 a year in net profit when
you divide that out I’m not going to do
the live math even though that’s
probably easy it’s a low percentage and
you know when you originally bought that
property you probably ran it based on
looking for a 10% or a 12% cash on cash
but if you when you rerun it under that
lens you say “My $200,000 is parked and
trapped in this property and it’s only
generating a in my case the property we
just sold it had a less than 1% return
on our equity.” So we had a decision to
make do we let that ride and just pay it
off over the next which would take
another 20 years unless we accelerated
our principal pay down or do we either
sell or refinance it use that 200,000
cycle it out and put it into something
else so that’s a decision a lot of
people face you know I’m sure Nathan
like you you’ve been slow and steady
buying these properties and we talk
about the loan payown accelerates over
time and the appreciation is usually
slow and steady especially in the
markets that we choose at some point
you’ll have enough equity in those where
it’s like okay am I getting the best
bang for that or should I 1031 exchange
it or should I sell it or whatever so
I’m curious do you think of that the
same way
yeah so 100% and the short answer is yes
i do think about that the same way and I
look at that not every day that would be
way too often but I look at it on a
regular basis but I think it goes back
to I think the original kind of question
or prompt here is I look at that and I
decide whether or not now is the right
time to act on what I’m looking at so
maybe I do have a low return on equity
or equity quote trapped in a property
which I don’t like that term because
it’s still my equity and it’s still
something I could choose to do something
with when I choose to do something with
it back to optionality from a discussion
we had but if if the current environment
you know we were just saying before
interest rates you know inventory all
that stuff is is conducive to me doing
something with that equity then yeah
we’ll absolutely pull the trigger and do
something about it but if it’s not it
doesn’t bother me that I might have a
low return on equity it’s not something
that keeps me up at night but I do look
at it to see to figure out when is the
optimal time to act either selling or
refi or 1031 or whatever it is it’s a
really good point there’s actually no
fundamental problem with having a lower
return on equity especially if your goal
is to hold these things long term
because if the end goal is to have a few
properties paid off we talked about in a
previous episode you’re using some of
these for a college fund well if you
refinance in year six then it’s probably
not going to serve that purpose the
whole idea is to pay it off in the 18
years or however the timeline you set up
so that it can be a tool for the for
that purpose so every house is different
and also every phase of life is
different i think for us part of what
caused us to make a move which we could
probably do a whole episode on that of
why we we’ve sold a couple of our
rentals part of why we did that is
because our personal circumstances
changed and the time horizon for some of
our our cash flow goals from real estate
accelerated quite a bit the game we were
playing when we first started buying
rentals when we know had no kids and had
a very different lifestyle that that
evolved over time and so we’re we’re
kind of we’re viewing it as I always
call portfolio chess we had eight
properties in three different markets
with different levels of equity position
in each one and we had to use those
pieces to try and rearrange to meet the
goals that we have for the moment and
those goals have changed over time yeah
goals change a lot or they do change
over time yeah so I know you and I are
in pretty much agreement about the fact
that it’s not dead but let’s give a
moment to acknowledge what are some of
the reasons that you think people are
saying that other than clickbait i think
it’s part of what we were or I started
with seeing at the top it’s when people
just look at take a house on Zillow or
whatever your favorite MLS tool is look
at its price look at interest rates
today and look at rents today
you quote can’t doing air quotes here
make it work in terms of getting any
sort of cash flow out of this or even
less so whatever 8 10 12% return on
investment that you’re looking for and I
think that’s the quick and easy way to
it’s the quick and easy excuse to give
yourself a pass and say oh this real
estate thing doesn’t work see I looked
at three properties on Zillow and it
just doesn’t work today and I think
that’s where a lot of it is coming from
in my opinion I also think that if you
wake up on a given day and you put your
20 minutes in and you look at three
properties and they don’t pencil out you
have to be okay with that you have to be
okay that you’re not going to find a
perfect deal every single day when you
go to do the work you might you
calculate your offer price that you
could pay we talked about you you move
the levers until they turn green green
meaning that they’re going to hit your
goals but there are other reasons why
those houses that you’re looking at
might not be good deals for you they
might not be in the right part of town
or you might discover something about
the features of them that’s where
pulling yourself out of the emotions of
saying nothing works i think that the
I’ve heard it referred to as pencils
down this idea that there’s no
opportunity out there when it’s just a
reframe I think that most people are are
needing and it’s patience i mean one of
the properties that meets our criteria
that was listed it got in my inbox this
morning we looked at it popped up on MLS
or Zillow a couple weeks ago and looked
at it doesn’t work can’t get our numbers
but literally this morning I got the
email from Zillow telling me there was a
$23,000 price cut on that property now
it becomes way more interesting i mean
I’ll analyze it later to see maybe now
it works though I doubt it but that
$23,000 price cut on the listing is
probably an indication that the seller
wants or needs to sell i might go in
with an even lower offer that’s what
people have to pay close attention to be
patient and which ultimately I think
shows that yeah it’s not dead or it can
not be dead and this is actually I think
one of your superpowers and I’ve known
you for several years now and I’ve seen
you do this multiple times but just
paying attention to the same properties
right as they sit on market and collect
dust or as they go offm market and then
they get listed you know six months
later for a lower price just keeping a
pulse on those because you know that at
some point you looked at it and if all
you do is just discard it and throw it
aside and you don’t even think well
maybe I’ll at least set a star it on
Zillow so that I get emailed when
there’s a status change or what have you
add it to your little inventory tracker
if you’ve got a good system for that
then you know you can be there for it
when it does circle around eventually
and there’s several stories I’ve heard
you tell where you waited 6 7 months and
you bought something 30 40 50% below
what it what it was listed for when it
originally went up so that’s that’s a
huge point for sure yep you got to be
patient yes i know Nathan and I are the
masters of telling all the boring
fundamentals that but Exactly this is
what this is what worked for us uh we
would like to think that we’re
presenting a little bit of a contrarian
view to all the clickbait that says you
know this is dead go flock all your
attention over to this next big shiny
thing everybody should go do crypto
exactly if you want a quick buck in
either direction if you want if you want
to quickly make or quickly lose money
Exactly there are plenty of riskier and
more flashy ways to go about it but in
our mind single family rentals in 2025
are conclusively not dead agreed
and uh we’ll wrap it there if you have a
opinion on this we’d love to hear about
it drop it in the comments come find us
and we will see you next time all right
cheers thank you for making it to the
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