The Right Way to Do “Value-Add” Real Estate in 2024

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Investing, Business

4.8 • 16.6K Ratings

🗓️ 14 October 2024

⏱️ 40 minutes

🔗️ Recording | iTunes | RSS

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Summary

What’s the best way to build wealth in 2024? For many, it’s “value-add” real estate investing. You might know what this is, but you may have never heard the term before. Value-add investing is when you buy investment properties, improve them, increase the cash flow, equity, or both, and reap the rewards by holding onto them as rentals or flipping them for quick cash. Today’s investor, Tom Shallcross, is doing just this, but he’s making BIG returns (six figures on flips!) and funneling those profits into his sizable rental portfolio. And he’s doing it all in 2024. We know that everyone has told you how impossible it is to invest in real estate in 2024, but Tom instantly proves the naysayers wrong. Not only is he flipping houses, but he’s also buying rentals, BRRRRing (buy, rehab, rent, refinance, repeat), and doing it all in a competitive market—Chicago! So what’s he doing differently? Tom gets the deals before the rest of the investors in his area can, takes on BIG house flips that most investors are too scared to, and constantly reinvests the profits into more real estate. He’s been doing it since 2016 and is STILL finding success in today’s market. How’s he getting the best deals sent to him? How’s he making such large profit margins? We’re uncovering his exact strategy and method in today’s episode. In This Episode We Cover: “Value-add” real estate investing explained and why it still works in 2024 Knowing your neighborhood “class” and why Tom switched from C to A How Tom is making six-figure profits on house flips even in today’s market Real estate partnerships and the skillsets you need to build a profitable flipping/rental/rehab business How to get real estate agents to send you properties BEFORE they hit the market Using short-term projects (flips!) to fund your rental property portfolio And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Find an Investor-Friendly Agent in Your Area The “Value-Add” Playbook: How to Boost Equity and Bring in MORE Cash Flow Connect with Tom Connect with Dave (00:00) Intro (02:11) "Accidentally" Investing (06:46) Getting Started in Cheap Neighborhoods (09:47) Switching to A-Class Investments (11:59) Finding Deals Before The Rest (18:02) Current Flip Profits + Costs (26:30) Boosting Your Rental's Income (32:24) What's Next? Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1030 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Value Ad investing is popular right now.
0:02.3	And with good reason.
0:03.3	It is probably, if not the single best way to make money in real estate right now.
0:08.6	If you haven't heard of this term, Value Ad just basically means taking a property
0:12.2	that's not up to its highest and best use
0:14.0	and improving it. That can be during a flip, it could be during a burr, or just buying a rental
0:19.3	property that you want to fix up and add value to it. And if you look on social media you see a lot of people doing this right now. I'm sure you've seen
0:26.9	some of the same Instagram posts that I've seen where people show these
0:30.3	beautiful before and after pictures showing the purchase price and
0:34.6	then the price that they sell it for or how much they increased rents by
0:39.0	renovating a property and it makes it look super easy, super fun, and like there's no risk.
0:45.1	But the reality of these projects is that they are profitable, don't get me wrong.
0:49.2	But if you're in the industry, if you've done these types of projects before you know that there are risks
0:53.9	and it does take a lot of time and it takes a lot of skill to be able to do them correctly.
0:59.6	And today that's what we're talking about. How to do value add investing the right way in 2024.
1:07.0	Hey everyone, it's Dave back with a new investor story on the BiggerPockets
1:14.4	real estate podcast and today we're speaking with investor Tom Shellcross who
1:18.2	went from operating properties in some of Chicago's more C class type of neighborhoods to operating 12-month
1:26.2	seven-figure gut renovation flips in the city's Class A neighborhoods as a
1:31.7	full-time career.
1:33.0	And I'm excited to talk to Tom because he's found some really innovative ways
1:36.9	to set himself apart in one of the country's most competitive markets,
	...

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