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Updated about 1 month ago,

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Hector Espinosa
Pro Member
  • New to Real Estate
  • San Diego, CA
20
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29
Posts

If You Were to Start Investing from Scratch in 2025, What Would You Do Differently?

Hector Espinosa
Pro Member
  • New to Real Estate
  • San Diego, CA
Posted

Let’s say you’re starting from zero in 2025—no properties, no deals, just the knowledge and lessons you’ve picked from BiggerPockets, books you have read and videos you have watched.

What would you do differently this time around?

I understand that everyone has unique goals, and responses will vary depending on those objectives. However, your answer could include, but is not limited to:

  • Market Focus: Would you stick to cash-flow-heavy areas, chase appreciation, or go after niche markets like short-term rentals?
  • Property Type: Multi-family? Single-family? Commercial? Maybe something unconventional like storage units or mobile home parks?
  • Financing: Would you try creative strategies like seller financing, BRRRR, or syndications, or stick with traditional loans?
  • Avoiding Mistakes: What’s the one thing you wish you could go back and tell your beginner self?
  • Leverage Tech: What apps, tools, or platforms would you use to streamline your daily activities?

In my case, living in a high-cost area, I’m looking for out-of-state investment and focused on multi-family (duplex,triplex and quadruplex) but open to single family homes too. Because of this, I have been meeting with different people in different areas and building a team which helps me to find and buy my first property although it hasn't been easy. Looking for cash-flow properties is hard these days and even when I have found a couple I feel is not worth the risk. Most of the properties I have found cash-flow <3000 per year. Well, if I could have 50 that cash 3k per year wouldn’t be that bad but as a starting point I feel I should wait a little bit more. I could be wrong and any feedback is welcomed. As a side note, most of the properties I have been targeting were Neighborhood grade C which are quite old and one of my concerns is that I may need to spend a lot of money on repairs and maintenance.

I feel that I would need to wait a little bit more and maybe save more for my down payment and try to target Neighborhoods grade B.

I'm trying to do an FHA loan and buy a house in my local market but even when I'm targeting properties between < 600,000 (which would be a 2Bed, 2 Ba in a good condition), my monthly payment would be around 5,000 which is impossible to pay for me.

So, it has not been easy and it won’t be but I’ll keep looking until I find one property that meets my requirements and helps me to achieve my goals. Then, I’ll start the process for the second one, and so on…

What about you? Whether you’re just starting out or you’ve done dozens of deals, I’d love to hear your perspective. What’s your 2025 starting-from-scratch game plan?

Looking forward to hearing your thoughts and insights.

If You Were to Start Investing from Scratch in 2025, What Would You Do Differently? If You Were to Start Investing from Scratch in 2025, What Would You Do Differently?
  • Hector Espinosa
  • User Stats

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    James Wise#4 All Forums Contributor
    • Real Estate Broker
    • Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH
    19,054
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    James Wise#4 All Forums Contributor
    • Real Estate Broker
    • Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH
    Replied
    Quote from @Nicholas L.:

    @James Wise

    can we add - be willing to be in it for 5-10-15+ years to weather those early storms?

    i keep seeing:

    1. buy out of state rental in a solid neighborhood with long-term potential (just as you are recommending) but then...

    2. have one rough tenant turn that costs a couple grand, and

    3. give up on real estate investing, and turn on everyone involved in the transaction for not guaranteeing that sweet cash flow in month 1

     lol, yea there is a decent chunk of investors who get really butthurt by that one bad unit turn and just give up. Oh well, it happens. Their loss is our gain.

    User Stats

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    Joe S.
    Pro Member
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    Joe S.
    Pro Member
    • Investor
    • San Antonio
    Replied

    Cannot go back…but here are some things I wished I had known about sooner.

    I wished I had realized I could have gotten bank lending even without a regular W2 job.

    Understood DSCR better sooner.

    I wish there was a couple of houses I had not bought.

    There are some houses I wish I had not sold.

    Just all basic stuff that a person can’t go back in time machine and change.

    As time goes on, I probably would update this list several years out. Lol.

  • Joe S.
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    Travis Biziorek
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    Travis Biziorek
    • Investor
    • Arroyo Grande, CA
    Replied
    Quote from @Nicholas L.:

    @James Wise

    can we add - be willing to be in it for 5-10-15+ years to weather those early storms?

    i keep seeing:

    1. buy out of state rental in a solid neighborhood with long-term potential (just as you are recommending) but then...

    2. have one rough tenant turn that costs a couple grand, and

    3. give up on real estate investing, and turn on everyone involved in the transaction for not guaranteeing that sweet cash flow in month 1


     I literally just had this conversation with a prospective client when he asked me what a typical outcome looks like.

    I told him everyone nods and agrees when I drill into them the risks of investing OOS and in Detroit. But many of them think "that won't be me though!".

    Inevitably, there are some that are not cut out for the turbulence and want to sell after less than a year of ownership. Then they're confused why they aren't going to break even when they have an a unit that needs work post-eviction. 


    The people that have success truly understand there will be challenges and keep moving forward when they happen. 

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    Steve K.#3 Market Trends & Data Contributor
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    Steve K.#3 Market Trends & Data Contributor
    • Realtor
    • Boulder, CO
    Replied

    I would only buy single family homes in the best locations I could afford rather than messing with multifamily and less great locations, and I would use my local credit union for loans because they keep them in-house and service them in-house, so that I wouldn’t have to deal with loans being passed around among all the sketchy loan servicing companies.  

    User Stats

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    V.G Jason
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    #4 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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    V.G Jason
    Pro Member
    #4 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
    • Investor
    Replied
    Quote from @Steve K.:

    I would only buy single family homes in the best locations I could afford rather than messing with multifamily and less great locations, and I would use my local credit union for loans because they keep them in-house and service them in-house, so that I wouldn’t have to deal with loans being passed around among all the sketchy loan servicing companies.  

    If you develop a great relationship with local credit unions, you'll be surprised by what all they're capable of. 
  • V.G Jason
  • User Stats

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    Steve K.#3 Market Trends & Data Contributor
    • Realtor
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    Steve K.#3 Market Trends & Data Contributor
    • Realtor
    • Boulder, CO
    Replied
    Quote from @V.G Jason:
    Quote from @Steve K.:

    I would only buy single family homes in the best locations I could afford rather than messing with multifamily and less great locations, and I would use my local credit union for loans because they keep them in-house and service them in-house, so that I wouldn’t have to deal with loans being passed around among all the sketchy loan servicing companies.  

    If you develop a great relationship with local credit unions, you'll be surprised by what all they're capable of. 

     I know, I wish I had figured that our earlier. I've had commercial loans with my CU but all others through brokers, and they've all been sold within a few months then had issues with the loan servicing companies/ the banks they sold my loans to. My local CU keeps all of their loans in their own portfolio. They offer interest-only loans, don't charge for appraisals unless the deal actually closes, and have great customer service (they actually close on time unlike some of the lenders my clients have chosen against my advice over the years who ask for my time for underwriting the day before closing). If it didn't mean sacrificing a few points and higher payments, I'd refinance all of my properties with my local CU right now. 

    User Stats

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    Hector Espinosa
    Pro Member
    • New to Real Estate
    • San Diego, CA
    20
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    29
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    Hector Espinosa
    Pro Member
    • New to Real Estate
    • San Diego, CA
    Replied
    Quote from @James Wise:
    Quote from @Hector Espinosa:
    Quote from @Todd Anderson:

    Hector, great question.

    As some others have said I would look to do what you are good at for a career.  something that makes you happy to do and makes you money.  save enough for a down payment and invest in loge term hold.  I always thought that in need to invest where I lived and for may years invested in bad areas that I thought I needed to.  

    If there is one thing I would do different is: I would invest Out Of State in markets that had sustained growth, strong job numbers, were safe and desired, and had favorable Landlord laws. 

    When I invest  today and many of the investors that I work with, find investing in newer areas, in newer properties, and in areas that the appreciation is obvious, is a great strategy. Today I look for deals that are turnkey and give me less headaches.  The investors that I now work with find that new construction 1-4 unit is the easiest way to find this property.  

    Best of luck to all in 2025 

    Any market recommendations for Out Of State investment? Normally, Cleveland, OH is the list for cash flow but I'm not totally convinced if I should start there. 

    Regards,

    Hector

    Hector,
    you'll get some value out of reading The Ultimate Guide to Grading Cleveland Neighborhoods. I also have similar guides that you may want to look over for Kansas City, Missouri. & Birmingham, Alabama.

    In addition there are tons of other turnkey "out of state" markets out there besides those listed above. Many of these markets are very well represented by sellers & turnkey operators here on BiggerPockets. In no particular order I have listed some of the most popular markets for out of state investors

    • Cincinnati, Ohio
    • Dayton, Ohio
    • Toledo, Ohio
    • Youngstown, Ohio
    • Cincinnati, Ohio
    • Memphis, Tennessee
    • Saint Louis, Missouri
    • Indianapolis, Indiana
    • Detroit, Michigan
    • Erie, Pennsylvania
    • Louisville, Kentucky
    • Milwaukee, Wisconsin
    • Jackson, Mississippi

    Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.

    One thing to note when looking at the individual markets, you can make or lose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

    • Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
    • Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
    • Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
    • Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
    • Make sure your property manager is a licensed real estate brokerage.
    • Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estate
    • Understand you can not eliminate all risk, only mitigate it. If you are risk averse, real estate, (especially out of state) is not for you.


    Thanks for the list and advise.  It is very useful. 

    Also, The Ultimate Guide to Grading Cleveland Neighborhoods is a great article. I had already read it.

    Cheers,
    Hector

  • Hector Espinosa
  • User Stats

    29
    Posts
    20
    Votes
    Hector Espinosa
    Pro Member
    • New to Real Estate
    • San Diego, CA
    20
    Votes |
    29
    Posts
    Hector Espinosa
    Pro Member
    • New to Real Estate
    • San Diego, CA
    Replied
    Quote from @Joe S.:

    Cannot go back…but here are some things I wished I had known about sooner.

    I wished I had realized I could have gotten bank lending even without a regular W2 job.

    Understood DSCR better sooner.

    I wish there was a couple of houses I had not bought.

    There are some houses I wish I had not sold.

    Just all basic stuff that a person can’t go back in time machine and change.

    As time goes on, I probably would update this list several years out. Lol.

    So, would you have preferred start with something like seller financing deals instead of conventional loans?

    Is there any advantage of DSCR loans over conventional loans or what do you mean by "understood DSCR loans better"?

  • Hector Espinosa
  • User Stats

    29
    Posts
    20
    Votes
    Hector Espinosa
    Pro Member
    • New to Real Estate
    • San Diego, CA
    20
    Votes |
    29
    Posts
    Hector Espinosa
    Pro Member
    • New to Real Estate
    • San Diego, CA
    Replied
    Quote from @Steve K.:

    I would only buy single family homes in the best locations I could afford rather than messing with multifamily and less great locations, and I would use my local credit union for loans because they keep them in-house and service them in-house, so that I wouldn’t have to deal with loans being passed around among all the sketchy loan servicing companies.  

    Thanks.  I'll explore my local credit unions to see what options do I have with them 

  • Hector Espinosa
  • User Stats

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    James Wise#4 All Forums Contributor
    • Real Estate Broker
    • Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH
    19,054
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    28,002
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    James Wise#4 All Forums Contributor
    • Real Estate Broker
    • Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH
    Replied
    Quote from @Hector Espinosa:
    Quote from @James Wise:
    Quote from @Hector Espinosa:
    Quote from @Todd Anderson:

    Hector, great question.

    As some others have said I would look to do what you are good at for a career.  something that makes you happy to do and makes you money.  save enough for a down payment and invest in loge term hold.  I always thought that in need to invest where I lived and for may years invested in bad areas that I thought I needed to.  

    If there is one thing I would do different is: I would invest Out Of State in markets that had sustained growth, strong job numbers, were safe and desired, and had favorable Landlord laws. 

    When I invest  today and many of the investors that I work with, find investing in newer areas, in newer properties, and in areas that the appreciation is obvious, is a great strategy. Today I look for deals that are turnkey and give me less headaches.  The investors that I now work with find that new construction 1-4 unit is the easiest way to find this property.  

    Best of luck to all in 2025 

    Any market recommendations for Out Of State investment? Normally, Cleveland, OH is the list for cash flow but I'm not totally convinced if I should start there. 

    Regards,

    Hector

    Hector,
    you'll get some value out of reading The Ultimate Guide to Grading Cleveland Neighborhoods. I also have similar guides that you may want to look over for Kansas City, Missouri. & Birmingham, Alabama.

    In addition there are tons of other turnkey "out of state" markets out there besides those listed above. Many of these markets are very well represented by sellers & turnkey operators here on BiggerPockets. In no particular order I have listed some of the most popular markets for out of state investors

    • Cincinnati, Ohio
    • Dayton, Ohio
    • Toledo, Ohio
    • Youngstown, Ohio
    • Cincinnati, Ohio
    • Memphis, Tennessee
    • Saint Louis, Missouri
    • Indianapolis, Indiana
    • Detroit, Michigan
    • Erie, Pennsylvania
    • Louisville, Kentucky
    • Milwaukee, Wisconsin
    • Jackson, Mississippi

    Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.

    One thing to note when looking at the individual markets, you can make or lose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

    • Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
    • Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
    • Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
    • Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
    • Make sure your property manager is a licensed real estate brokerage.
    • Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estate
    • Understand you can not eliminate all risk, only mitigate it. If you are risk averse, real estate, (especially out of state) is not for you.


    Thanks for the list and advise.  It is very useful. 

    Also, The Ultimate Guide to Grading Cleveland Neighborhoods is a great article. I had already read it.

    Cheers,
    Hector


     Party hard brother.

    User Stats

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    Joe S.
    Pro Member
    • Investor
    • San Antonio
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    Joe S.
    Pro Member
    • Investor
    • San Antonio
    Replied
    Quote from @Hector Espinosa:
    Quote from @Joe S.:

    Cannot go back…but here are some things I wished I had known about sooner.

    I wished I had realized I could have gotten bank lending even without a regular W2 job.

    Understood DSCR better sooner.

    I wish there was a couple of houses I had not bought.

    There are some houses I wish I had not sold.

    Just all basic stuff that a person can’t go back in time machine and change.

    As time goes on, I probably would update this list several years out. Lol.

    So, would you have preferred start with something like seller financing deals instead of conventional loans?

    Is there any advantage of DSCR loans over conventional loans or what do you mean by "understood DSCR loans better"?


    Everybody has their own situation. As primarily self-employed most of my life it would have helped me to discover DSCR loan sooner. For more explanation of what they are feel free to read the many threads on Bigger Pockets concerning them. As others have said your local credit union is a good fit for some people as well.

  • Joe S.
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    Michael Diossa
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    • Investor
    • Rhode island
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    Michael Diossa
    Pro Member
    • Investor
    • Rhode island
    Replied

    Looking back, I would have started to network, get a proper mentor in the field I enjoy and prioritized investing in rental properties before buying my primary home. I didn’t earn significant income until my late 20s, which meant losing nearly a few years of wealth-building potential. I could have started with a duplex or triplex, living in one unit while renting out the others, which would have allowed me to leverage the power of compounding and real estate appreciation. While there were reasons for my decisions, the important lesson is that time is the key factor in building wealth, and starting sooner leads to faster results along with growing opportunities.

  • Michael Diossa
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    Rick Albert#3 House Hacking Contributor
    • Real Estate Agent
    • Los Angeles, CA
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    Rick Albert#3 House Hacking Contributor
    • Real Estate Agent
    • Los Angeles, CA
    Replied

    If I were starting over in your market, I would 100% focus on house hacking in San Diego. You match money four different ways:

    1. Cash flow

    2. Appreciation

    3. Loan Buy Down

    4. Tax Benefits

    San Diego is an expensive market. Therefore you are going to have bigger gains in appreciation(3% rent/value appreciation on a $1M asset is dollar wise bigger than a $100K property) and you are going to have bigger loan buy down. This generates wealth FASTER. Then from there I would leverage and use that money to buy out of state. That's what I did and I wouldn't change the strategy.

    As far as properties, look at opportunities to add more units/bedrooms. Years ago I saw homes in areas like Lemon Grove with large floorplans and limited rooms. You would easily add another 2-3 bedrooms.

    Look just outside San Diego. As San Diego gets priced out, tenants and home buyers have to go somewhere. 

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    Wale Lawal
    Agent
    • Real Estate Broker
    • Houston | Dallas | Austin, TX
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    Wale Lawal
    Agent
    • Real Estate Broker
    • Houston | Dallas | Austin, TX
    Replied

    @Hector Espinosa

    From my perspective, a smart real estate strategy involves targeting cash flow in long-term growth markets like Texas, the Carolinas, Tennessee, or the Midwest, focusing on Class B/C+ neighborhoods for stability and manageable maintenance. House hacking and the BRRRR method are great for stretching capital efficiently. My goal would be to secure my first property by 2025, reinvest in 3-4 properties by 2028, and refine systems for scalability by 2029, using tech tools to stay organized and effective.

    Good luck!

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    Melanie P.
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    Melanie P.
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    Replied

    If my husband and I were to start over again we would buy higher quality assets and not be focused on immediate cash flow and unit count like we were when we started this after exiting a fairly decent sized small business. At the time, we thought, what will we do with our time if we only have 15 or 20 rentals? In truth we could have started with 10 great ones and wound up so much better off over time 

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    Jared Smith
    • Rental Property Investor
    • Lakeland, TN
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    Jared Smith
    • Rental Property Investor
    • Lakeland, TN
    Replied
    Quote from @Melanie P.

    If my husband and I were to start over again we would buy higher quality assets and not be focused on immediate cash flow and unit count like we were when we started this after exiting a fairly decent sized small business. At the time, we thought, what will we do with our time if we only have 15 or 20 rentals? In truth we could have started with 10 great ones and wound up so much better off over time 

    Powerful advice! I think it is human nature to feel like we need to get the best deal with the best/highest "immediate return". Oftentimes the "immediate and highest return" evaporates once you get into it and start dealing with various issues that weren't addressed upfront or due to location (harder to fix). 100% agree with you!