Rookie Reply: Rental Arbitrage 101 and How to Invest Your Home Equity

Real Estate Rookie

BiggerPockets

How To, Education, Business, Investing, Entrepreneurship

4.8 • 1.7K Ratings

🗓️ 30 August 2024

⏱️ 38 minutes

🔗️ Recording | iTunes | RSS

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Summary

You know real estate investing is a great way to build wealth, but maybe you fear you don’t have the resources to start. Well, there’s a way to create cash flow without money OR rentals—rental arbitrage! This low-risk, rookie-friendly strategy could be your gateway into the world of real estate. In today’s episode, we’ll cover the pros and cons of this strategy and whether it still works in 2024! Welcome back to another Rookie Reply! If you’re a homeowner looking to buy your first rental property, tapping into your home equity gives you an enormous advantage. We’ll show you how to quickly build and scale a real estate portfolio through the BRRRR method (buy, rehab, rent, refinance, repeat), and you’ll also learn when to use a cash-out refinance or get a home equity line of credit (HELOC) instead. Finally, inheriting tenants puts you in a difficult spot. How should you introduce yourself to tenants? What’s the best way to raise rents on long-term tenants? Stick around to find out! Looking to invest? Need answers? Ask your question on the BiggerPockets Forums! In This Episode We Cover: How to cash flow WITHOUT money or rentals (and whether this strategy works in 2024) The pros and cons of Airbnb arbitrage (and costly mistakes to avoid!) The BEST ways to leverage your home equity as a new investor Using the BRRRR method (buy, rehab, rent, refinance, repeat) to build your portfolio When to use a cash-out refinance versus a home equity line of credit (HELOC) Crucial steps to take when inheriting tenants with your rental property How to get tenants to agree to rent increases using the “binder method” And So Much More! Links from the Show Ashley's BiggerPockets Profile Tony's BiggerPokckets Profile Join BiggerPockets for FREE Ask Your Question on the BiggerPockets Forums Buy the Book “Short-Term Rental, Long-Term Wealth” Find Investor-Friendly Lenders See Ashley and Tony at BPCON2024 in Cancun! BiggerPockets Real Estate - Episode 520: $47K/Month in Rent, 0 Doors Owned | Rookie Takeover w/ Rafael Loza Get FREE Landlord Forms by Becoming a BiggerPockets Pro Member Find Landlord-Tenant Laws in Your State (00:00) Intro (00:57) What Is Rental Arbitrage? (10:53) HUGE Arbitrage Mistakes to Avoid (14:50) How to Invest Your Home Equity (21:38) Inheriting Tenants & Raising Rents (31:58) Send Us Your Question! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/rookie-451 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	Okay, let's get your questions answered. I'm Ashley Carer and I'm here with Tony J Robinson.
0:08.0	And welcome to the Real Estate Ricky podcast where every week, three times a week,
0:12.0	we bring you the inspiration motivation and
0:14.0	stories you need to hear to kick start your investing journey. Today we're diving
0:18.0	into the bigger pockets forms to get your Ricky questions answered. Now guys
0:22.4	the forums are the absolute best place
0:25.0	for you to quickly get all of your real estate investing questions
0:27.8	answered by tons of experts.
0:29.4	So today, we're going to discuss the ins and outs
0:31.7	of short-term rental arbitrage, and if it's still a good
0:34.5	option for today. How to pull out equity from your primary residence, then reinvest that back into a real estate
0:40.1	deal, and then what steps to take when you're buying a tenant occupied
0:44.3	property so you can set yourself up for success? Tony I thought I would be very
0:48.4	courteous today and we could start out in the short-term and vacation rental forum so is there a question
0:55.1	that sticks out to you that you'd like to answer there is there is a question
0:59.6	about short-term rental arbitrage so this person says is short-term rental arbitrage still a good
1:04.8	opportunity for those that are doing it or who have already started it is arbitrage
1:09.7	still something worth pursuing is the opportunity still there for new people. So I guess first
1:16.3	actually maybe we should just explain what arbitrage is and I know you have an
1:20.9	arbitrage deal we actually just ended three of our arbitrage units yesterday.
1:25.9	We actually literally just like sold all the furniture
1:27.6	and got rid of from yesterday.
	...

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