Cash Flow or Equity: Which One Should Beginners Invest for? (Rookie Reply)

Real Estate Rookie

BiggerPockets

How To, Education, Business, Investing, Entrepreneurship

4.8 • 1.7K Ratings

🗓️ 11 October 2024

⏱️ 40 minutes

🔗️ Recording | iTunes | RSS

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Summary

Investing for cash flow or equity is an age-old debate, but what’s the best approach for a new investor? Should you focus on making a monthly profit right off the bat or play the long game with equity growth and appreciation? You might be surprised to hear where Ashley and guest co-host Noah Bacon land on this topic! Welcome back to another Rookie Reply! How much money do you actually need to buy your first rental property? Should you put down as little as possible and use debt to get your foot in the door, or is it best to save enough cash for a large down payment, closing costs, and reserves? We’ll break down your best options. Finally, house hacking can help you get started in real estate, but eventually, you may want to move out and put your unit up for rent. We’ll discuss whether you should get a property manager or self-manage from afar when that time comes! Looking to invest? Need answers? Ask your question on the BiggerPockets Forums! In This Episode We Cover: Cash flow versus equity (and which one new investors should focus on!) Which property types deliver the highest cash flow (or appreciation) Leveraging the power of partnerships to help fund your first deal How much money you need to save before buying your first property How to transition out of a house hack (and whether you need a property manager) And So Much More! Links from the Show Ashley's BiggerPockets Profile Tony's BiggerPokckets Profile Join BiggerPockets for FREE Real Estate Rookie Facebook Group Ask Your Question on the BiggerPockets Forums Buy Ashley’s Book “Real Estate Rookie” Find Investor-Friendly Lenders Should You Invest for Equity or Cash Flow? Connect with Noah (00:00) Intro (01:31) Cash Flow vs. Equity (11:26) Replacing Your W2 Income (14:43) Saving Cash & Using Debt (24:59) How Much Money Do I Need? (28:32) Exiting a House Hack (36:03) Post Your Question! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/rookie-469 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

Transcript

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0:00.0	Let's get your questions answered.
0:02.8	Welcome to the Ricky podcast where every week, three times a week,
0:06.4	we bring you the inspiration, motivation, and stories you need
0:10.2	to kick start your investing journey.
0:12.0	I'm Ashley Kerr and usually Tony Robinson is here
0:15.9	but we are joined by Noah Bacon. You might recognize him from being on the rookie podcast before and from his YouTube series how I started
0:25.6	aired on the BiggerPockets real estate rookie YouTube channel. Today we are
0:29.7	diving into the BiggerPockets forums to get your questions answered. The forums are honestly
0:34.7	the best place for you to quickly get all your real estate investing questions answered
0:39.6	by many experts. So today we are going to discuss whether you should chase cash flow or equity for
0:46.8	rookie investors, how to determine how much capital you need to get started, and ways to transition out of your first house hack.
0:56.8	So Noah, welcome to the Rookie Podcast as my co-host today.
1:00.9	Thank you, Ashley.
1:01.9	It's always an honor to be here really
1:02.7	excited to take your brain a little bit, pick some rookie questions off the
1:06.1	forums and learn from the best with you. I'm actually excited about a little debate
1:10.4	here because this first question out here I think we might have different
1:15.1	answers on it and we can get into a little heated discussion here Noah.
1:19.3	I'm looking forward to it. I love the age old debate here of equity versus cash flow and I'd love to hear where your
1:24.4	stance is because I'm sure mine's going to be a little bit different.
1:26.5	Okay, well, Noah, do you want to read off the question that was brought to us from the Bigger Pocket's
1:31.2	forums? Yeah, absolutely, Ashley. So let me read the first question here directly from the bigger pockets forms? Yeah, absolutely actually.
	...

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