If You're Scared About the Economy, Listen to This

0:00If you're scared about the economy, listen to this, inflation is up. Unemployment is rising. World events are feeling crazier than ever. If you're feeling uncertain about your financial future, you are certainly not alone. I'm definitely feeling it too. But I'm not sitting on my hands, holding onto cash and hoping everything will be okay. I'm still investing. The economy feels less predictable than before, and that makes me more motivated to put my money to work. But I need to own assets that I control, not just stocks or crypto that feel like they just go up and down almost randomly these days. For me, that means single family and small multi-family real estate. I'm still finding ways to make those deals work today, and you can too. Maybe you even need to make those work these days, whether you're looking for your first deal or optimizing a long-standing portfolio. Hey, everyone. I'm Dave Meyer, Chief Investment Officer at Bigger Pockets.

1:03Here do try and make sense of these wild economic times is my co-host, Henry Washington. All right, Henry. So give it to me straight. How you feeling about the economy? Good. You happy? He excited? On a scale of one to ten, I'm about about a fear factor of six. Okay, yeah. I think that's right. It's not a disaster. It's just confusing, right? There's like, yes, weird signals going in every direction. So it's like hard to be at a one or a ten. I feel like the only logical answer is to be somewhere in the middle, because one day I'm like, oh my god, the economy's in the crash on the next day. I'm like, everything's great. It's totally hard. It's hard to get a beat on, and everything is changing so quickly. I couldn't agree more. It is very confusing. I'm just trying to stay fundamentally sound and pay attention to like what's truly happening locally and not what's happening in the headlines. I think that makes a lot of sense. And I wish I could do that. But man, I just

2:04read the newspaper all day. Every day just freaking out about everything I read. But I will just say this. I want to be honest with people that, you know, I give like an assessment of the economy very regularly here and on the market as well. And I'll just say like, I do think the economy is getting worse. I think that generally speaking, if you're talking about the average financial position for the average American, it does seem like it's deteriorating. Now there are good things going on with the economy as well. The stock market continues to do well. GDP is growing. If you're the owner of some sort of AI startup, you're probably crushing it right now. But I think the average American, if you just look at the data, you look at spending patterns, you look at savings rates, you look at consumer sentiment, it's starting to deteriorate. And I don't really see how that turns around in the short run. I think that's the thing that kind of worries me about

3:04the economy is that like unemployment starting to go up. If the Fed cuts rates, I don't really think that's going to change that much. I think it's like an AI-induced labor shortage. And I just think we're in for what a lot of people have been calling for, which is sort of like a transitionary time in the economy. We have this brand new technology. We're sort of at the end of an economic cycle. And whether they call it a recession or not, I think we're in for like a shift in the economic vibe. That's just how I see it. Not necessarily saying that means negative things for real estate. We'll get to that in just a minute. But I just think if you're looking at the macro picture, it's slowly deteriorating in my perspective. Yeah, I find it hard to see how people who only depend on one income stream are going to continue to be able to afford to live comfortably with the rate which things are going up in price. I mean, everything costs more money. Groceries rent. And if you don't have

4:07some sort of plan to bring in more income to supplement that, then you end up supplementing with credit card debt. And that's probably why credit card debt is at an all-time high right now as well. Yeah. And defaults are starting to go up, which is the stuff that's, you know, you see credit card debt going up and up and up. And you're like, okay, that's going to end someday. And that's going to end badly. And maybe that time is soon. And usually when credit cycles like that, and that's when you start to see a recession, it's typically how it happens. Now, I don't know if we're going to call this a recession or whatever. I think that, you know, that's up to some academic people who make those decisions. But I just, I do get the sense just not even data like anecdotally, I don't know about you. Like everyone I talked to is just constant source of conversation. It's just like how expensive everything is. People are having a hard time making ends meet. And even if you're not currently having a hard time making ends meet, you're worried that AIs coming to take your job. Like it just feels like there's so many risks or threats to financial security right

5:12now. I think it's on people's minds and sentiment, whether it's accurate or not, does impact behavior and does impact the economy. So I just generally think we're in for more difficult economic times. I agree with you. That doesn't mean you shouldn't invest. And I actually think a lot of people would make the case that that means that you should invest. So I'm just curious. Like given the fact Henry that you have at least some nerves, you're at a six out of 10. You're not panicking, but you're above average. How does that impact your investing decisions? It impacts my investing decisions in a way that helps me be more conservative with what I'm investing in. But I mean, the truth of the matter is no matter how uncomfortable it is to say is that like wealth is created when there's pain in the market, right? Pain creates an opportunity to buy assets at a discount, whether that's real estate, stocks, crypto, like that's when people buy crypto's down right now. And if you believe in it as an asset, this is when you should buy. So because you're betting on it going back up with

6:16the stock market tanks because we are in a war or some crazy decision is made that causes fear and stocks go down. I mean, historically, we've seen that stocks will come back at some point. And so the the opportunity to build wealth is built during times like this, but that doesn't make it any less scary to spend money on those assets during times like this. And so the way that I battle with that fear is with being very picky about what it is that I'm buying. And so this is another time when I feel strongly about single family and small multifamily asset class A because it's more affordable than than buying a multifamily asset class B because regardless of what's going on with AI and the economy, people still need a place to live. You know, people have to have four walls in a roof. And so I can afford the single family asset class. If things go terrible, I think

7:17demand for this single family asset class will continue to rise. I mean, we're still historically, we still don't have enough inventory to supplement the demand that we have, even though in some markets, it seems like real estate is going down. There's just a need for housing, both for rentals and for owning. And so I'm just buying less risky assets and buying at deeper discounts. And there's actually more opportunity right now. It seems to buy at a discount the last three deals we put under contract. I mean, I've gotten them at 50 cents on the dollar, some even lower than that, which is, which is really, really good or just it hasn't been like that in a few years. Are you buying more or less than you were like a year ago? A than a year ago, I'm probably buying more, but we were down so much last year versus what we done in the past that it's not that much more historically, I'm probably on average compared to what I do each year. But last year was such a low for us that I'm definitely buying more, but but not a ton more. Yeah, last year was just rough. I feel like last year we still had no inventory,

8:23but things were incredibly unaffordable. That was like just a tough year in 2025 where things are getting a little bit more affordable. And there's better deal flow now. So I do think things are getting better. But I guess the question about whether or not to invest in real estate comes down to what else are you going to do with your money right now? Because it sounds like I know that's just such like a lame thing to say, but it's true. Holding cash is okay, but there's inflation. So if you're going to just put it in a savings account, you're probably not going to make money. If you put in a money market, you're about flat. That's okay, but I would like my money to earn some money. The stock market, I have a good amount of money in the stock market, but I am not putting new money into the stock market right now. If it tanks, like Henry said, I would put more money into it right now. But it is at very frothy valuations historically. And I have a hard time seeing how it's going to go up much more. I think there's just it could go up more, but I think there's more downside risk

9:26to upside potential right now in the stock market. I don't bet a lot on on cryptocurrency. And so I'm just asking myself like, where would I want my money? If there's a recession, what do I want to do with my capital? And I just keep coming back to real estate. And like, I'm not just saying that because I host this podcast, like I will admit to everyone, I am selling some real estate right now, too. Yeah, me too. Yeah. So like I am I am pruning and just keeping the stuff that is really good that I know I want to hold through a recession. But generally, I just feel like everything that Henry said is true. Where do I want my money in recession? I want it in something that is generally recession proof real estate might not grow a ton during a recession, but it traditionally does not go down that much and rents really don't go down that much. It is a great inflation hedge. You're still getting amortization. You're still getting tax benefits. And so like all of those things, even during a hard economic time, maybe the safest place to keep your money. And so you said

10:30you were being conservative. I have felt for the last year, so that it's like a quote unquote risk off time for investing. I'm more focused on modest returns and not losing money than I am on taking big swings and getting great returns. And to me, real estate is the best asset class to do that still. Yeah, I agree with you. I mean, where a lot of investors are willing to buy at the same margins they bought at last year and the year before last. I'm not, I am buying at much deeper discounts. And if that means I do less deals, it means I do less deals. But I'm actually finding the opposite right now that people are taking the offers that we're making right now. It's creating opportunity for us for the future. They're opportunity to hold on to some of these assets that we're getting at deeper discounts as rental properties or opportunities to turn around and sell these assets to some of these other investors who are less risk averse than I am and taking them on. Yeah, I think that is the flip side of this. There is going to be additional opportunity. And that is the main reason I said I was selling some

11:36stuff. It's not because I want to get out of real estate. It's because I want to reposition into different real estate because there are certain times deals sort of peak out at their useful mess. You know, you do a bird, you do the renovation, you get the equity kicker, you stabilize it. And it's good. But like, you know, if you sell that property and put it into the different bird, you might make more money. And so like, that's kind of what I'm thinking about because I just, I think the deals are starting to be there at least in the places I invest. But I think more are coming is my expectation. For better or worse, when the economy does poorly, people sometimes freak out and just sell stuff that maybe they shouldn't even sell. Or there is unfortunately some financial hardship. And like, I'm not rooting for that. But I'm just saying as an investor, like if people are selling and there's more inventory on the market, there's more deals on the market, there's going to be more opportunities for you to find the kinds of assets that you like. And to me, that's the upside to this whole situation. I'm not expecting, though, these deals to be grand

12:40slams in the first couple of years. I'm basically sticking to this sort of upside error that I've been talking about for a long time here is that I'm going to buy deals now knowing that they might be flat in terms of value for a year or two or three, but they will recover. And I'm just treating this more as an opportunity to get my portfolio in place for like the next era of growth, whether that comes in a year or two years or five years from now. So that's a little bit about what Henry and I are doing and how we're feeling about the economy. But we want to talk a little bit about you and what investors at different stages of their investing career should be thinking about how they should be adjusting their strategy and tactics. If they are fearful about the economy, we're going to get into that. But first we got to take a quick break. We'll be right back. There are two kinds of real estate investors, those who have reviewed their insurance and those who think that they have most don't realize their coverage wasn't built for how they actually invest vacancy periods rehabs short term rentals or LLC held properties. These gap surface only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate

13:44investors, understanding portfolios, risk at scale and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing at NREG.com slash BP pod. That's n-r-e-i-g.com slash BP pod. Okay, we're going to shift gears for a minute to cover something important, especially for new landlords. The shows often talk about getting stuck doing everything ourselves and the cost of sweat equity. The key question is simple. Is my time better spent elsewhere? I use a tool that cuts down on a lot of landlord hassles. And the wild part is it's just $12 a month. It handles rental screenings, rent collection, maintenance requests, and accounting all in one platform via a mobile app or desktop. It saves me time and tenant communication and keeps me organized for tax season. It's called rent ready and you can sign up for a six month plan for just one dollar with promo code BP 2025. Pro users get it for free because we believe in it. Just sign in through your pro account to get started. Rent ready helps ensure on time rent with auto reminders,

14:45keeps communication professional and lets you post listings to multiple sites. Check it out at rentready.com slash bigger pockets. That's rent-r-e-d-i.com slash bigger pockets. Four decades real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time consuming, and expensive. But imagine if real estate investing was suddenly easy. All the benefits of owning real, tangible assets without the complexity and expense. That's the power of the fund-rise flagship fund. Now you can invest in a $1.1 billion portfolio of real estate starting with as little as $10. The portfolio features $4,700 a single family rental home spread across the booming sunbelt. It also has $3.3 million square feet of highly sought after industrial facilities thanks to the e-commerce weight. The flagship fund is one of the largest of its kind. It's well diversified and it's managed by a team of professionals. And it's now available to you. Visit fundrise.com slash BP market to explore the fund's full portfolio, check out historical returns, and start investing in just minutes.

15:47Carefully consider the investment objectives, risks, charges, and expenses of the fund-rise flagship fund before investing. This and other information can be found in the fund's perspective at fundrise.com slash flagship. This is a paid advertisement. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time-consuming, and expensive. But imagine if real estate investing was suddenly easy. All the benefits of owning real, tangible assets without the complexity and expense. That's the power of the fund-rise flagship fund. Now you can invest in a $1.1 billion portfolio of real estate starting with as little as $10. The portfolio features 4,700 single-family rental homes spread across the booming sunbelt, and also a 3.3 million square feet of highly sought-after industrial facilities thanks to the e-commerce way. The flagship fund is one of the largest of its kind. It's well diversified and it's managed by a team of professionals. And it's now available to you. Visit fundrise.com slash BP market to explore the fund's full portfolio, check out historical returns, and start investing in just minutes.

16:49Carefully consider the investment objectives, risks, charges, and expenses of the fund-rise flagship fund before investing. This and other information can be found in the fund's perspective at fundrise.com slash flagship. This is a paid advertisement. Welcome back to Think of Pockets Podcast. Henry and I are here being honest about we're a little scared about the economy. I think that's the general vibe. I think we're feeling a little better maybe than the average person because we own some real estate and have some secondary sources of income and some control over our finances. But I think we need to address that this is going to be an uncertain time economically. But Henry I'm curious what you think for people who are fearful about the economy haven't done their first deal. Thinking about doing a deal I'm wondering with everything going on and all the uncertainty is now the time to do it. How would you advise someone thinking that? Again, there is opportunity right now to enter the market and yes it's going to feel scary but this is the time when you need to

17:50really focus on the fundamentals. One of the things that you said on previous episodes is that people should buy the best quality asset that they can in a particular market and I think that there's some truth to that. If you're looking to enter the space right now especially if you've never done a deal I think there's a lot of value in learning how to do this business with a single family or a small multi family to start off and this isn't the time to search for the cheapest market where you can buy the cheapest asset but I do think starting with a single or a small multi and being pretty cheesy about the market that you do that in. So if you live in a market where you can generate cash flow or buy a deal that you can afford that's going to produce the return you're looking for that's great you probably should invest in your backyard there's advantages to that but that doesn't that's not everybody in the United States so if you have to invest out of

18:51state I think that you want to be pretty selective in the market that you do that in we've had several shows where we've talked about what areas of the country real estate is doing well in right now the northeast and the Midwest are both performing fairly well they both have assets that are affordable but also there are several markets within the northeast and within the Midwest that have rents that are performing above the national average I'd be choosing a market where population growth has been steadily improving you don't want to see a big hockey stick in population growth but you want steady steady population growth I'd look 10 to 20 years and remove the outliers so don't look at the covid years don't look at the real estate 2008 crash years so you're want to look for median and not average population growth and then I'd be coupling that with job growth so what markets in maybe the Midwest or in the northeast that have positive population growth positive job growth

19:52I'd be looking for markets where the average cost of a home is less than the median for the nation and I'd be looking for markets where the average rent is somewhere around the median or higher than the median because that's where you can probably find cash flow and where you might get some appreciation as well those are just good market fundamentals if you can buy a single family asset in a semi decent neighborhood in a market where people are moving to that has the jobs for people who are moving to that market where the home is somewhat affordable and where rents are going to supplement that that's just a formula for an asset that you can probably hold on to through the storm now you need to be financially capable to hold on to that asset because we don't know what's going to happen there can be some blacks one event that causes something terrible to happen in the real estate market but the people who lose when that happens are the people who don't have the financial backing to be able to hold on to those assets and so first and foremost is you got to get financially stable enough to be able to afford an asset and then the second is you

20:54want to buy an asset in a market where it has great fundamentals and then you just try your best to hold on to that asset and let it produce some income for you I know that sounds very rudimentary and basic but that's in my again primal easy to easy brain like that just seems like the safest way to get into this space because worst case scenario you have an asset in a market that people want to live in and where rents support that asset and that's just a good formula what you're saying tactically I stand by I want to say something about the mindset of this for people because if people feel that it's risky to get into real estate right now I don't blame you for thinking that but I would say this find a deal that lowers your overall risk and I know that might sound impossible but I actually think for a lot of new investors going out and buying a rental property or even better house hacking you are probably lowering your overall financial risk as opposed to doing

22:01nothing just say you're sitting on $50,000 right now and you're worried about whatever your stock portfolio going down or that something bad is going to happen in the market can you reduce your overall living expenses by house hacking if so you are reducing your risk during a financial downturn you're actually improving your financial situation in the short run and giving yourself that upside if the market actually goes well if you can buy a rental property that brings in an extra $500 a month and you're worried about inflation or childcare or whatever it is that's causing you stress that can actually reduce your overall risk the thing I want to remind people is that even though there is risk in the housing market I think certain markets are going to see 5% declines this year often seen a 10% decline you know there's going to be declines in the market that's why you need to do it Henry saying buy it a discount buy in a market with good fundamentals but even in markets that go down to percent you're still going to be improving your financial

23:04situation because you're going to get tax benefits you're going to get cash flow you're still going to get amortization and so I just encourage you not to take additional risk but find deals that lower your overall risk in the big picture because that absolutely can be done right now so that's for newbies and I totally agree with what you were saying Henry I think low risk figuring out the ways to buy with good fundamentals don't need to take a big swing just find a way to conserve your capital and let it grow consistently over the next couple of years despite what happens with everything else for decades real estate has been a cornerstone of the world's largest portfolios but it's also historically been sort of complex time consuming and expensive but imagine if real estate investing was suddenly easy all the benefits of owning real tangible assets without the complexity and expense that's the power of the fund rise flagship fund now you can invest in a 1.1 billion dollar portfolio of real estate starting with his little is 10 bucks

24:08the portfolio features 4700 a single family rental home spread across the booming sunbelt and also have 3.3 million square feet of highly sought after industrial facilities thanks to the e-commerce way the flagship fund is one of the largest of its kind it's well diversified and it's managed by a team of professionals and it's now available to you visit fundrise.com slash bp market to explore the funds full portfolio check out historical returns and start investing in just minutes carefully consider the investment objectives risks charges and expenses of the fund rise flagship fund before investing this and other information can be found in the funds perspectives at fundrise.com slash flagship this is a paid advertisement tired of traditional lenders holding you back host financial is here to change the game they've ditched the dti restrictions and they zero in on what really matters your properties income potential so no more chasing papers for tax returns or personal income statements think about it a lender that values your properties worth over your paycheck that's the host financial difference approved in 47 states they are ready to help you make your next big move curious if you qualify just head over to hostfinancial.com and find out stop letting

25:12outdated lending practices hold you back that's hostfinancial.com where your properties potential meets unlimited financing there are two kinds of real estate investors those who have reviewed their insurance and those who think that they have most don't realize their coverage wasn't built for how they actually invest vacancy periods rehabs short-term rentals or LLC held properties these gap surface only when filing claims that's why investors work with nreg they specialize exclusively in real estate investors understanding portfolios risk at scale and cash flow protection one claim can erase years of returns if you own a rental property don't assume you're covered have nreg review your insurance with someone who gets investing at nreg.com slash bp pod that's n-r-e-i-g dot com slash bp pod when I bought my first rental I thought collecting rent would be the hard part nope they had been crushed me every night was receipts tax forms and checking who was late on rent I kept thinking if this is one unit how do people run 10 base lane changed that it's bigger pockets official banking platform that handles expense tracking financial reporting rent collection and even tenant screening all in one place it's the

26:13system I wish I had from day one sign up today at base lane dot com slash bigger pockets and get a hundred dollar bonus base lane is financial technology company and is not an FDIC insured bank banking services provided by thread bank member FDIC what about experienced investors and we've talked a little bit about what you and I are both doing but like what's your general mindset for for people who maybe own you know two to ten units out there if you own ten assets around that you need to be assessing the performance of the assets and I would encourage you probably need to be doing this on a quarterly basis because things are things are changing so rapidly what I'm doing is I'm looking at the assets I'm seeing the ones that are performing the best and I'm seeing the ones that are underperforming and then I'm taking an assessment of the ones that are underperforming and figuring out how much capital do I have to throw at them to get them to perform yeah and before I even make that decision I am asking myself like

27:19on its surface now that I've been operating this asset for a while is this asset truly one that I want to maintain in my portfolio for the next 10 years yeah if it's not I'm heavily considering selling it and selling it means what's the tax implication if I sell it and what can I do with that cash if I sell it because right now what we are seeing and what Dave and I talked about earlier is there are a lot more opportunities coming up to buy at better discounts than when I bought some of these assets a couple of years ago and so now I'm at a pretty prime position in terms of like the market's still giving me a good value for selling assets selling assets are still selling and trading for for higher prices and so now I can sell something maybe that isn't producing like I hoped it would produce and I can take that money and capitalize on new opportunities that are in the market now or I can get a better discount or I can trim the fat in my portfolio

28:23and just not purchase another asset yeah I can put that money towards the assets in my portfolio that are performing well pay them down a little more and get them to perform better so for me it's all a math problem but you've got to take the time to assess your portfolio and have some honest conversations to give people a picture of what I've done I've gone through my entire rental portfolio and I've given everything a green light a yellow light and a red light in the green lights of the things that are performing well I want to keep for the long haul the yellow lights are things that are performing well or okay I'd keep them if I have to but I'd be okay selling them if I need to and the red lights are the things that aren't performing that I don't want to put money into making them perform because I can get a better opportunity cause with that money either investing back into my current portfolio of green and yellow lights or buying an asset at a deeper discount that's going to give me a better cash on cash return than that one property is getting me at the moment I am doing the exact same thing and it's it is difficult I think that that is true it's kind of frustrating

29:26gotta be like that one didn't work out the way I was hoping that it did but that's just part of being an investor literally you take risks to make reward I do think though what Henry saying and what I am doing as well is selling some stuff but I want to be clear that I'm not selling it because I'm panicking I'm not like oh my god there's going to be a crash I need to get out before some crazy thing happens in certain markets I might do that if I was you know in in Austin two years ago I might have done that but you know like in I think you know I live in Seattle I think Seattle is going to be in for some tough years but I'm just saying in general I am not selling stuff because I'm panicking I am as endeavor being one of the biggest corrections in the country right now I'm not selling there because I'm panicking I am selling because the numbers just aren't working as a buy and hold it's that's the difference I'm not saying like I'm trying to time the market perfectly and in fact I'm holding on to most of my stuff in Denver because they are performing

30:30actually and I'm just going to ride out the declines and appreciation I just think that there are times when you look at an asset and you say appreciation is probably done I've done what I can for this property I've forced enough appreciation and the market's not taking it any further rents are what they are maybe they haven't grown as much as I wanted them to maybe the tenants are you know difficult or whatever I can't find the right people to be in this home and it's just time to move on like I just think that makes a lot of sense I'll just give you an example I was doing a slow burr in this duplex I renovated the first one went great time to do the second one getting quotes right now and it's going to be like 30 grand to do this unit and with the way things are going it's going to raise my rents like 200 bucks and I'm like that's just not worth it you know and I'm looking at the ARV and it's like I'll spend 30 grand it'll maybe increase the value 40 45 like that's just not worth it to me that's not worth the risk yeah so I'm going to sell it

31:33instead I'll actually make some money off of it but like it's not what I wanted it to be that's not why I bought this property you know but this is a house yeah I've been telling you I'm trying to shed my like turn of the century civil war error properties and like you get rid of all your robberty lease yeah exactly it was built in I think it was like 1910 right like Woodrow Wilson was president when this was built I think I'm getting rid of it does there's still a post out front where people would park their horse and buggy yeah yeah I should put my back out there but like I just don't want it I would rather sell it I probably won't 1031 I'll just pay the tax I know a lot of 1031 I'm a fan but I just don't want it right now I've said repeatedly on the show that I think the number one value of a investor right now is to be patient and a 1031 does not allow you to be patient and so I'm gonna pay some tax and I think I will more than make

32:34up for that by buying the right deal that I'm gonna hold on to for 10 years so like that's just an example if I don't sell it if I can't get the price if I whatever I'll just hold on to it it's not like a freaking out it's not gonna be terrible but I just this is kind of the calculus that I'm doing because you know I look at this economy I think people are fearful I think the market's gonna stay slow for a long time I'd rather be acquiring new things at discounts than holding on to mediocre assets if you're gonna trim the fat it makes sense to do it at a time when values are there for you to do that if something terrible happens and the market crashes and people are forced to sell well now you're not getting rewarded for doing it right now I can trim the fat and get a small reward for doing it because the market is allowing us to sell so when values are up so trim the fat when you can so that way if the market turns now at least I'm sitting on a portfolio of assets I know I want to hold on to and I've positioned myself well in a time of

33:36crisis can I can I tell you something I'm thinking about doing yeah I'm thinking about like if I sell this property right take this money and like either recasting a mortgage or paying off a different mortgage not because I'll probably do it forever but I think it's actually a good way to hold cash right now instead of like putting it into savings account I'm gonna basically put my extra money into a rental property because it will earn me seven eight nine percent cash return right by paying that down and then when I find a deal I'll just refinance that and that will cost me a couple grand or I'll take out a HELOC or you know a line of credit on a rental property and go buy something opportunistically but I actually just kind of like the idea especially in a down economy of like less risk on that rental property so I'm taking reducing my overall risk but I'm not like limiting my options I can still go refinance that anytime I want to go buy something else and I just been thinking about doing that rather than sticking money in a money market account or a savings account because it just makes it's just a better return that's 100% what I'm

34:40doing that's yeah my my goal is to my goal is to pay off two more assets this year oh that's awesome like you're gonna sell and then pay off to whatever single families or two of my green light rental properties yet boom that's just like I love that that's just like now you're good those are just forever properties right it's just doesn't it feel good man I paid off but when I paid off my first one this bad year like it just felt good it just felt good yeah I ended up having to re-fi a property and pull some cash out and I took that cash that I pulled out and I paid off another one and oh it's great it was perfect it was a perfect time so then we ended up we paid off two last year I want to try to do two this year that's awesome good for you I love that goal all right this is great advice I think again this is just risk off fundamentals investing take care of any risks that you have don't limit yourself in terms of upside and maneuverability I think that that makes a lot of sense question though Henry do you think there's like any situation you think people should be selling or panicking or freaking out like are there any situations that

35:44you would just really avoid right now like what are the signs that throw on your life vest exactly like I think there are certain markets where if you have assets that aren't performing and the market itself the fundamentals aren't good I would sell all if it if it were me like the reason I'm holding on to in Denver because I believe in the long-term fundamentals of that market and those assets are performing which is fine but if I was in a market where I bought in I'm just gonna throw out markets some markets in Florida those markets might have years of declines to go and if you're not performing now I wouldn't hold on to it to be honest even if I was selling it a loss if it were me I would cut beat I was curious if you have any thoughts on like where you might just need to bite the bullet and and live to see it another day for me the signs would be if my market is doing the opposite of the advice I gave to new investors if you're starting to see population decline year over year yeah and not to the opposite if you're starting to see jobs

36:45decline year over year and conversely if you're starting to see rents go down like you're unable to raise rents because of those things you probably need to pull the plug sooner than later unless you know something that other people don't know maybe infrastructure or something is coming that people don't know but typically if populations declining rents they're declining and there aren't jobs then then you need to pull the plug that the the town is starting to to die the any could economies dying yeah agreed and I think there's also just you probably know in your heart certain assets you're like this thing is just it's just a turt like I got to get I think there's just time sometimes by a turt guys yeah like sometimes if you're just struggling with an asset and trying to figure it out and you're like oh if I just hold on or just hold on like to me it's not the time to do that like unless you have a solid plan to turn it around if you're questioning is this going to turn around or not those are the ones I would get rid of the two best feelings I've ever had in real estate one was paying off an asset two was selling a

37:46turd even if I tell us oh feel so good all right well thanks for being honest with us Henry I appreciate it and I hope you all appreciate this because I I will be honest I am sort of obsessive about following the economy I am a little bit worried about it but I am not freaking out about real estate I'm more concerned just about average people being able to you know afford their lives but I think real estate has provided me a little bit of a buffer and insurance policy if you will against downturns that doesn't mean every asset I own is going to perform great if there's a recession but it does mean that I know that I'm at least probably inflation the hedge to know as I'm going to get tax benefits I'm getting cash flow that I'm not worried about going away and that makes me feel a little bit better and I would encourage people to just figure out ways to use real estate to make you feel better have less risk not feel like you're going out there and taking some massive swing during a risky time couldn't agree more all right well thank you all so much for listening to this episode of the bigger pockets podcast he's Henry Washington

38:48I'm Dave Meyer we'll see you guys next time thank you all for listening to the bigger pockets real estate podcast make sure you get all our new episodes by subscribing on youtube apple spotify or any other podcast platform our new episodes come out Monday Wednesday and Friday on the host an executive producer of the show Dave Meyer the show is produced by ENK copywriting is by calico content and editing is by x to this media if you'd like to learn more about real estate investing or to sign up for our free newsletter please visit www.biggerpockets.com the content of this podcast is for informational purposes only all host and participant opinions are their own investment in any asset real estate included involves risk so use your best judgment and consult with qualified advisors before investing you should only risk capital you can afford to lose and remember past performance is not indicative of future results bigger pockets LLC disclaims all liability for direct indirect consequential or other damages arising from a reliance on information presented in this podcast