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By Lex Levinrad
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Do you want to learn how to wholesale real estate, buy rentals and fix and flip houses? On the Investing in Real Estate Podcast, I share practical strategies to help investors like you get started investing in real estate. The goal is to help you move one step closer to achieving financial freedom through real estate.
I have been investing in real estate buying and selling houses for over 23 years. I have personally purchased and flipped over 1,500 single family homes. Together with students in our Partnership Program, more than 4,500 deals have been completed. I want to share with you the experience that I have from buying and selling over $500 million dollars of real estate over the past 23 years.
I will show you a real-world perspective shaped by multiple market cycles including the boom years of 2003 to 2008 (when real estate prices doubled). This was followed by the Financial and Housing Crisis of 2008 which led to the collapse of Bear Stearns, Lehman Brothers,Indymac Bank and Washington Mutual. I started my real estate training program in October 2008, as the foreclosure crisis began and started buying bank owned properties in 2009. That same year we were taking students on bus trips to visit bank owned homes and teaching them how to buy and bid on bank owned homes. There were so many deals that out of necessity we were forced to flip many of them because we could not keep them all. Banks were literally giving them away.
After that, we had the recovery and the boom and rapid rise that followed in real estate prices from 2009 to 2020 where prices doubled. And then we had the covid effect, where free money, and low interest rates created a frenzy for investors and prices doubled again. Now, I focus on teaching my students what has happened from 2022 to 2026, and where we are right now in the real estate cycle. As a real estate investor you need to understand this in order to position yourself accordingly to be ready to buy in the next foreclosure crisis (which is rapidly evolving).
Today’s podcast focuses on what is working in the current market environment in 2026 and what strategies real estate investors like you should be wary of and should approach with caution. This applies to you regardless of whether you are brand new to real estate or are an experienced investor managing multiple properties.
My journey into investing in real estate began with uncertainty and zero knowledge. From 1989 to the early 2000s, I was employed as a stock broker and financial advisor (money manager). I made almost a million dollars a year as a top producer for a company that ironically cleared through Bear Stearns (which collapsed in 2008). After the Nasdaq Stock Market crash of 2000, I began questioning whether I wanted my financial future tied entirely to external market forces like the stock market going down and crashing (like it did in 2000). At the time my wife did not work and we had a one year old child. It was very unsettling and destabilizing to watch how quickly the stock market could collapse and ruin your life the way it did.
Around that time in mid 2000, I saw an infomercial on late night TV by a guy named Carlton Sheets. He had a program called “No Money Down” and the infomercial introduced the idea of buying property with little money down. The concept resonated with me, especially after losing my stock brokerage business and searching for a new direction. Carlton Sheets was based in Florida and in his program he spoke about how you could buy 3 bedroom houses in Stuart Florida for $45,000.
At the time, I was living in Los Angeles, where homes cost $450,000 to $500,000. The idea of purchasing rental properties in Florida for 1/10th of that price made buying rental properties in Florida seem far more attainable. I also liked the fact that there were no State Income Taxes in Florida while in California I was paying over 11%.
After discussing it with my wife, we decided to go on a trip to Florida on Memorial Day weekend in May 2003. We loved what we saw and that weekend we made the decision to leave California and move to Boca Raton, Florida. We immediately listed our home in Los Angeles for sale and received multiple offers within 24 hours of listing our home. We sold our house and relocated to Florida. The goal was to pursue a new beginning for my family and to focus on a new career in real estate.
The initial plan was simple: buy ten rental properties, own them free and clear and then retire. Looking back, that goal was naive, but it was a starting point. As we purchased more rentals, the goal expanded from ten properties to twenty, then to fifty, and then to 100.
My first year in real estate was essentially an apprenticeship. I worked under my mentor Ben and his partner Alan. I learned how and why motivated sellers sell properties below market value. At first, many aspects of the business didn’t make sense. Why would someone sell a $200,000 house for $100,000? Why would someone borrow money at high interest rates like 12% instead of going to a bank to get a mortgage?
Over time, I realized that life circumstances create opportunity in real estate. People lose their jobs and unfortunately go into foreclosure. Homeowners have their properties damaged by hurricanes, or they face financial hardship from illness or disability. Many of these sellers simply want to sell quickly without dealing with repairs or listing their home on the MLS. And that is where the opportunity for us as real estate investors is created.
My first deal came from a simple classified ad that read, “We buy houses for cash.” A seller whose rental properties were damaged by Hurricane Frances responded. My mentor Ben purchased the properties, and I earned a finder’s fee of $17,000. That moment transformed real estate from an idea into a reality. It was the proof of concept that I needed. I had just made $17,000 as a deal finder from a $185 classified ad. And Ben had added $100,000 in equity to his portfolio.
I realized that it was possible to create a lot of wealth by buying houses from motivated sellers. And being that one hour from where I lived a level 4 Hurricane had just made landfall in St Lucie County there were literally thousands of motivated sellers. They were not difficult to spot. They all had blue tarps on their roofs that were given to them by FEMA who declared the area a disaster zone. This is what created the opportunity for me to buy homes from motivated sellers.
Many new investors struggle at this stage. They hear about opportunities but question whether it’s real or achievable. That skepticism is normal — until the first deal proves otherwise. The key is not to quit before you do that first deal.
One of the biggest differences between successful investors and those who never get started is the ability to take action. Many people become stuck in analysis paralysis, waiting until they fully understand every detail before moving forward. Done is always better than perfect. The key is to get started instead of staying stuck in analysis paralysis. Many new students stay stuck paralyzed with fear forever. They are waiting for everything to make sense. Don’t be that person. Learn and then take action with the knowledge and information that you have learned.
In my experience training over 7,500 students, the individuals who succeed are those that are willing to take calculated action. They understand that learning continues through experience, not just education. But they are willing to take action. This is very important.
Persistence is equally important. Early in my career, I spent 6 months driving foreclosure leads, knocking on doors, and facing rejection. I purchased zero houses during my first 6 months but I did not quit. Most people would have quit long before results appeared. Real estate rewards consistency and resilience. Imagine if I had quit before making that $17,000 fee as a deal finder. Unfortunately this is what most new real estate investors do (they quit).
After the stock market crash, in the year 2000, a major turning point in my thinking came after reading the book Rich Dad Poor Dad. Despite having a finance degree and having years of experience as a stockbroker, ,and reading thousands of books on investing, that book Rich Dad Poor Dad fundamentally changed how I viewed money, income and wealth creation. It changed how I thought about money and how to make money. More importantly it showed me how to invest in real estate.
The concept is simple: acquire assets that produce income. In real estate, this often means purchasing a property, renting it out, allowing tenants to pay down the mortgage, and benefiting from appreciation and rent increases over time.
Over the long term, rents tend to rise while loan balances decrease. Eventually, the property becomes debt-free, producing cash flow for life. Multiply that across multiple properties, and the results can be substantial. For example ten properties that each pay you $4,000 a month in rent is $40,000 a month in income. This is not that difficult to attain.
This approach of buying rental properties is more accessible to most people than traditional investing because lenders are willing to finance real estate purchases, something they would never do with stocks or bonds or mutual funds.
One of the most effective strategies in real estate investing for creating wealth is known as the BRRRR method which stands for Buy, Repair, Rent and Refinance.
The key is purchasing the property at a significant discount to market value – ideally 50 cents on the dollar or less. The only way you will be able to buy a property that cheap is if you are buying from a motivated seller who is delinquent on their property taxes, has a damaged property, or is in foreclosure. Usually properties that sell for 50 cents on the dollar have financial distress and also have damage.
A distressed property will require significant repairs that prevent a traditional buyer from purchasing it with a conventional mortgage. As an example, if a house has a damaged roof, then the house cannot be insured. Without insurance it is not possible to get a conventional
Mortgage. The only lender that will lend on a damaged property is a hard money lender or a private lender. Private lenders will not lend more than 65 percent of ARV less repairs.
Example:
House is worth 200k (ARV)
65% of ARV is $130k
Repair Estimate is 30k
In this scenario, the lender will lend 65% of ARV (130k) less the 30k repair estimate which would be a loan amount of 100k. So ideally an investor should be paying no more than 100k for this 200k ARV house. This works out to be exactly 50 cents on the dollar.
Deeply discounted deals from motivated sellers require a cash only purchase. Because investors borrow this cash from private lenders at high interest rates like 12%, they will need to pay a much lower purchase price in order to make a profit. Then they can renovate the property and rent it to a tenant. Once that has been completed they can refinance the loan into a conventional mortgage based on its improved value on the appraisal.
The strategy depends on three critical skills:
Real estate markets evolve, and your investing strategies must evolve with them. You cannot act the same way in a declining market as you can in an appreciating market. While there are more opportunities to buy at discounted prices you also need to be more cautious.
Fix-and-flip projects carry increased risk when prices are softening like they are now. If property values decline during your renovation, your profits can disappear quickly. Fix and flips only make sense when properties are purchased at very significant discounts. You will need to buy much deeper than you would in a regular market where prices are appreciating. You should build in a margin of safety of at least 10% based on the sold comps. You should also pay attention to listings on the MLS which may reflect pricing better than sold comps from 3 or 6 months ago. In a declining market, it is better to look at what is active on the MLS than what sold 6 months ago.
Another advantage of lower priced properties is that the lower the price of the property, the less risk that you will be in a situation where you cannot sell it. Your interest payments will be lower and your taxes and insurance will be lower. Affordably priced properties can be rented to a tenant and will usually cash flow if they are purchased at the right price. This can be a great plan B if your fix and flip will not sell at the price that you want.
Long-term rental properties purchased using the BRRR method remain one of the strongest strategies, particularly affordable housing in stable markets. Buying lower-priced properties, renovating them cheaply and efficiently, and then renting them out to Section 8 tenants is a strategy that works well in today’s market. Prices are down and rents are up for Section 8.
As foreclosures, short sales and bank-owned properties increase and are listed on the MLS, there will be more opportunities for you to buy properties at significant discounts. Investors who prepare for this as the market transitions will benefit the most. That is why you should be attending the Foreclosures, Short Sales and Bank Owned Properties Boot Camp which is coming up in a few days (Feb 20 to Feb 22 in Deerfield Beach FL).
One of the greatest lessons from decades in investing is the importance of stepping back and viewing the bigger picture. Many investors make decisions based on recent market trends rather than long-term fundamentals.
When prices rise rapidly, fear of missing out (fomo) drives buying. When prices fall, fear and panic set in. Successful investors do the opposite — they buy when opportunities increase and competition decreases and they sell when the market is overheated like it was in 2022. That is what I did. Learn from someone who picked the bottom in 2009 and the top in 2022. When I say “now is the time to buy” you better be paying attention because millions of dollars will be made buying the next dip.
Patience, discipline, and a long-term outlook consistently outperform emotional decision-making. The biggest mistake you can make as a new investor (especially if you are a coaching student) is to be in a rush to buy. I see this all the time. I paid money for coaching, six months have gone by and I have to buy something. No you don’t. You can wait patiently for opportunities that make sense to arise. Because they will. Just last month the banks took back 40,000 properties. These are all going to be coming on the market. Do not be in a rush to buy, instead patiently wait for the opportunities to come to you.
True success in real estate comes from understanding multiple strategies rather than relying on just one. A complete investor knows how to:
The goal is not to rely on one tactic, but to develop a skill set that allows flexibility in any market environment. The way you do this is by investing in your real estate training and education and becoming a complete real estate investor.
Real estate investing continues to offer one of the most accessible and easiest paths to building long-term wealth and financial freedom for you and your family. The BRRR strategy is not overly complex, but to understand it you will be required to spend time and money investing in your education and training. In addition to education, you will also need persistence, be willing to never quit or give up,be consistent and be willing to take action.
In today’s market, focus on buying affordable single family homes at huge discounts. Focus on long-term rentals that can be purchased using the BRRR Method. Be patient and wait for opportunities to emerge. Investors who develop strong fundamentals now position themselves to benefit as market cycles shift.
The fundamentals you need to focus on learning now are:
The above list is where all of the action and opportunities will be over the next two years. Invest in your education now so that you can prepare yourself to position and prosper for the foreclosure surge and the bank owned properties that are coming. Financial freedom in real estate is not achieved overnight. But if you buy good properties at 50 cents on the dollar and you hold them for the long term, within 10 years you can be a multi millionaire. Even better, learning how to do this correctly becomes a repeatable and sustainable process.
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