Young and Profiting with Hala Taha (Entrepreneurship, Sales, Marketing)
Dave Meyer: Build Your Real Estate Empire with Smart Investing | Entrepreneurship | E326
Mon, 30 Dec
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When Dave Meyer graduated in 2009, the job market was bleak. Inspired by a friend who found success buying a single-family home, he decided to give real estate a shot. Although Dave was unable to qualify for a loan on his waiter’s salary, he managed to secure his first property using creative financing. He continued to spend his spare time managing his properties until his tech startup failed in 2016. At that point, he decided to focus on real estate, combining his experience with his data science skills to build a thriving career at real estate platform, BiggerPockets. In this episode, Dave explains how anyone can start and scale a real estate portfolio. He also shares tips and strategies to navigate today’s housing market. In this episode, Hala and Dave will discuss: (00:00) Introduction to Real Estate Investing (01:52) Why Real Estate is a Smart Investment (05:50 Understanding Cash on Cash Return (06:29) Real Estate as Entrepreneurship (07:40) Dave's Real Estate Journey (18:29) Managing Real Estate Investments (25:59) Economic Considerations in Real Estate (29:32) Understanding Depreciation and Tax Benefits (32:31) Exploring Hot Real Estate Markets (34:14) Overcoming Real Estate Investment Fears (37:35) Quick Fire: Pros and Cons of Different Deal Types (41:39) The Appeal of Commercial Real Estate (44:03) Development and Lending in Real Estate (48:43) Final Thoughts and Advice for Aspiring Investors Dave Meyer is a seasoned real estate investor and the Vice President of Data and Analytics at BiggerPockets. With more than 14 years of experience, he has grown a thriving real estate portfolio, starting with a fourplex he bought at age 23. Dave has authored notable books like Real Estate by the Numbers and Start with Strategy, where he combines his analytical expertise with actionable advice for investors. As the host of two popular podcasts, On the Market and the BiggerPockets Real Estate Podcast, Dave educates listeners on smart investing strategies. Known for developing tools like the Market Finder, he has made data-driven decision-making more accessible for investors. Resources Mentioned: Dave’s Books: Start with Strategy: Craft Your Personal Real Estate Portfolio for Lasting Financial Freedom: amzn.to/3ZLMG6e Real Estate by the Numbers: A Complete Reference Guide to Deal Analysis, written with J Scott: amzn.to/4fo4BFY BiggerPockets: biggerpockets.com On the Market Podcast: youngandprofiting.co/3OZKWS5 BiggerPockets Real Estate Podcast: apple.co/4fpTZGo Sponsored By: Airbnb - Your home might be worth more than you think. Find out how much at airbnb.com/host Found - Try Found for FREE at found.com/profiting Shopify - Sign up for a one-dollar-per-month trial period at youngandprofiting.co/shopify Active Deals - youngandprofiting.com/deals Key YAP Links Reviews - ratethispodcast.com/yap Youtube - youtube.com/c/YoungandProfiting LinkedIn - linkedin.com/in/htaha/ Instagram - instagram.com/yapwithhala/ Social + Podcast Services: yapmedia.com Transcripts - youngandprofiting.com/episodes-new All Show Keywords: Entrepreneurship, entrepreneurship podcast, Business, Business podcast, Self Improvement, Self-Improvement, Personal development, Starting a business, Strategy, Investing, Sales, Selling, Psychology, Productivity, Entrepreneurs, AI, Artificial Intelligence, Technology, Marketing, Negotiation, Money, Finance, Side hustle, Startup, mental health, Career, Leadership, Mindset, Health, Growth mindset. Finance Finance, Financial, Personal Finance, Wealth, Stock Market, Scalability, Investment, Financial Freedom, Risk Management, Financial Planning, Business Coaching, Finance podcast, Investing, Saving,
Chapter 1: What inspired Dave Meyer to start investing in real estate?
Chapter 2: Why is real estate considered a smart investment?
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Why would you say that real estate investing is actually entrepreneurship?
Because even if you buy a relatively simple type of real estate investment, you got to do something. You have to find tenants, you have to run the books, you need to be a good property manager, provide a quality place to live. To me, that's running a small business.
What are some of the tax benefits that people can get from real estate?
The most common one is just known as...
Get a $75 sponsored job credit at indeed.com profiting. Terms and conditions apply. As always, you can find all of our incredible deals in the show notes or at youngandprofiting.com slash deals. Yap gang, 2025 is a year of change for me. I'm single and there's nothing tying me down to Jersey anymore. And so I'm looking to set up residence in Texas or Florida.
Yap gang, I was today years old when I learned that real estate investing was really just entrepreneurship. I learned this from Dave Mayer, the guest of today's episode. Dave is the VP of Data and Analytics at BiggerPockets, the host of the popular On the Market podcast, and the author of the new book, Start With Strategy.
And I've got to stay there at least six months and one day so that I can save on taxes and switch up my dating pool. Now it's a toss up between Miami and Austin. I'm super familiar with Miami, but I haven't really explored Austin much. And with so many entrepreneurs raving about it, I've at least got to test it out.
Whether you're a seasoned investor or want to start real estate as a side hustle, Dave is going to give us a masterclass in real estate investment, economic considerations, and an overview of deal types so that you can figure out the investment strategy that's right for you. Let's jump right into this amazing conversation with Dave Mayer on real estate.
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Chapter 3: What is cash on cash return and how is it calculated?
Real estate is such a unique asset class, and I do believe that acquiring assets, particularly hard assets like real estate when you're young, is super beneficial. I'll just name a couple of the reasons I like. First and foremost, I am very entrepreneurial, as I know you are, and a lot of your audience is. And I just love the ability to control the performance of your investments.
And the amazing thing about real estate investing is that for the most part, your biggest expense, which is your mortgage, will get fixed in place because you lock in that price. And then your rent, the income that you're generating goes up over time. And so if you buy something that has a 6% or 8% cash on cash return today,
It's not something that you're able to do in the stock market or with cryptocurrency or with bonds. And to me, that makes it both fun and more profitable. And then there's other more sort of technical reasons where real estate and hard assets tend to keep pace with inflation. They appreciate over time.
By the time you want to retire, say that's 15 or 20 years from now, that could be a 30 or 40 or 50% cash on cash return, depending on a lot of decisions you make with your business over that time. But that's why it's so valuable is those rents tend to keep pace with inflation or at least exceed inflation or sometimes exceed inflation.
And if you know a little bit about the market, you know that supply is really constrained in the housing market. And so there are a lot of tailwinds that I think will help increase the value of real estate for the foreseeable future.
And if you were to pay attention to the headlines, you might think that real estate is really like volatile and very risky. Why is it actually a pretty low risk asset to invest in?
But your expenses are relatively fixed and that creates a growing margin over time.
So for all the newbies out there, what is cash on cash return?
I think a lot of millennials, I am one, have this sort of housing market trauma from the great financial crisis because that was a very significant crash. But if you look backwards in time, it's really the only crash of that magnitude as far back as we have reliable data. And so that's nearly 100 years. We've never really seen a market crash like that. And if you look at other times where housing
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Chapter 4: How can beginners manage real estate investments?
Chapter 5: What are the economic factors to consider before buying property?
But if you often people when people ask me that question, I say just Google the median home price over time in the United States, and you'll see that it's largely just gone up into the right for the last century.
The term real estate investing is somewhat of a misnomer because although you are typically taking some of your own capital and putting it into this business, you really are operating a business. Even if you buy a relatively simple type of real estate investment, like a long-term, you know, you just say you buy a single family home and rent it out to people.
That reminds me of stocks. It's kind of like stocks just always go up, right? So you're saying housing prices just always go up. So it's a good long-term investment. So talk to us about why real estate is a good way to achieve financial independence.
Real estate is, in my opinion, the best way to earn cash flow from an investment. And for that reason, it's a great way, and a lot of people use it to replace their income. It's not the only reason to invest in real estate. It's not the only benefit. But I think Rather, stock market, if you even get great dividend stocks, you're talking about 2%, 3% bond yields or 3% or 4% in terms of cash flow.
It's not a ton of work, but you got to do something. You have to find tenants. You have to run the books. You need to be a good property manager. provide a quality place to live.
And so to me, that's running a small business in a way that buying an index fund or buying cryptocurrency, which are both worthwhile investments or worthy of consideration, just aren't, you know, that's kind of set it and forget it. Where real estate, you need to be paying attention to your portfolio and decisions and performance, not every day, but on a weekly or monthly basis.
Whereas real estate, even when you buy something on the market, you can get something at 6%, 8% cash on cash return in addition to many of the other benefits like tax. tax advantages and appreciation and loan pay down. So you get better cash flow.
And you actually started real estate sort of as a side hustle. You did it on the side of your career. So talk to us about how you first got interested in real estate and how you got started.
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Chapter 6: What are the tax benefits of investing in real estate?
And the amazing thing about real estate investing is that for the most part, your biggest expense, which is your mortgage, will get fixed in place because you lock in that price. And then your rent, the income that you're generating goes up over time. And so if you buy something that has a 6% or 8% cash on cash return today,
I graduated college in 2009. And if you remember that, it was a very bad job market. And I moved from New York to Denver and was waiting tables. And I had a lot of free time on my hands. And so I would ski a lot. And that's partially why I moved to Colorado. And I had a friend who wound up buying a single family home with his girlfriend at the time. And they were just killing it. And
By the time you want to retire, say that's 15 or 20 years from now, that could be a 30 or 40 or 50% cash on cash return, depending on, you know, a lot of decisions you make with your business over that time. But that's why it's so valuable is those rents tend to keep pace with inflation or at least exceed inflation or sometimes exceed inflation.
Honestly, my friend was not super sophisticated. He wasn't some great investor. And I thought if he could do it, I could do it. And I used the resource that I had at the time, which was time, to find a good deal. I would drive around Denver and bike around Denver and just look for properties. I went and looked at a ton of them.
But your expenses are relatively fixed and that creates a growing margin over time.
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Chapter 7: How do you choose the right real estate market?
So for all the newbies out there, what is cash on cash return?
So cash on cash return is a simple metric that we real estate investors love. And you basically just calculate it by how much cash flow you generate in a year. And you divide that by the total amount that you have invested in a property. So if, for example, you had a rental property that made 10 grand in a year after all of your expenses,
I sort of taught myself a little bit of financial modeling, which I had a little bit of a background in. And The numbers just made so much sense to me that it felt, I was probably just so naive, I didn't really understand the risk or what I was getting myself into. But luckily, back then in 2010, which their deals were relatively abundant,
Chapter 8: What strategies can help overcome fears in real estate investing?
and you invested 100 grand into that property, you would have a 10% cash on cash return. And we just basically use this metric to measure one part of the benefits of real estate, which is just getting that monthly income each and every month.
And so I was able to find something in my spare time while I was still working 30 or 40 hours a week. And that's a really common way for people to get into real estate. And honestly, despite what a lot of social media talks about, that is the most common way for people to continue in real estate. You don't need to be a full-time investor.
So I know before you mentioned that real estate is entrepreneurial. And that's something that I never really thought about. When I think of real estate, I think about investing. But why would you say that real estate investing is actually entrepreneurship?
It is very commonly used to augment your income, either from a W-2 job, from another small business, or just other investment classes.
The term real estate investing is somewhat of a misnomer because although you are typically taking some of your own capital and putting it into this business, you really are operating a business. Even if you buy a relatively simple type of real estate investment, like a long-term, you know, you just say you buy a single family home and rent it out to people.
And so talk to us about this first deal. You were 23 and then you ended up buying like, I think it was like a multifamily home and you raised money to do this. You didn't use your own money. So talk to us about this deal.
I was, you know, I made decent money as a waiter, but literally they paid me in cash and all the money I had at the time was in my bedside dresser. So I could not qualify for a loan. And people look back on 2010 sort of nostalgically right now in real estate saying, oh my God, there was amazing deals. And there was, but getting loans was really difficult in the aftermath of the financial crisis.
It's not a ton of work, but you got to do something. You have to find tenants. You have to run the books. You need to be a good property manager, provide a quality place to live. And so to me, that's running a small business in a way that buying an index fund or buying cryptocurrency, which are both worthwhile investments or worthy of consideration,
Just all right, you know, that's kind of set it and forget it. Where real estate, you need to be paying attention to your portfolio and decisions and performance, not every day, but on a weekly or monthly basis.
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