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Transcript Of This Podcast:

Hi everyone, welcome to the Investing in Real Estate Show. This is your host, Lex Levinrad. On today’s episode, I want to talk to you about the opportunities in today’s market with rental properties. We have a very unique set of circumstances that have led us to where we are now.

The first thing we saw was the absolutely crazy increase in prices that happened after COVID, from 2020 to 2022. There was a huge jump—most areas increased at least 50%. In some areas, prices went up as much as 70%, 80%, even 100%.

With this huge price increase, it became nearly impossible to find cash flow. It just didn’t exist. But there was another thing that happened after COVID—a direct result of COVID—and that was the inflation effect.

The government pumped a lot of money into the economy with EIDL loans and PPP loans, and people were flush with cash. This is one of the reasons prices went up so much. And it wasn’t just real estate—everything went up. Even the prices of Rolex watches increased. There was simply too much money floating around in the system.

The net result of that was inflation, which we were all aware of. Suddenly, rents were going up, along with the price of food, gas, and everything else. The concept of rents going up is very important. Regular market rents increased quite a bit.

Looking at my own rentals, for example, a property that rented for $1,300 went to $1,475, then the following year to $1,550, and the next year to $1,675. That’s a significant increase.

I have a HUD Fair Market Rent tool that shows how much Section 8 pays for rental properties on my website at www.lexlevinrad.com/hud. You can use it to see fair market rents for your area. You simply select your state and city, and then you can view all the ZIP codes in that city. For example, if you’re in Florida, you could choose Broward County, then Fort Lauderdale, and then view the rents HUD pays for a three-bedroom in each ZIP code.

This tool works nationwide. One thing to note is that the number you see is the maximum amount, including utilities. If HUD lists the maximum at $2,100, my experience is that actual Section 8 rents end up around $1,900. I generally deduct $200–$250 from the HUD number to get a realistic rent amount.

Before buying a property, I recommend calling the housing authority in the area. If you’re thinking about renting a property with Section 8 in Deerfield Beach, Florida, for example, call the Deerfield Beach Housing Authority and say, “I’m a landlord with a three-bedroom, two-bathroom rental. What rent could I get for Section 8?” Even better, visit them in person. Many times, they have flyers or TV monitors showing current rental listings.

You must first understand what you can get for rent because cash flow is your top priority when buying rental properties.

Many people in real estate have heard the phrase “location, location, location.” I think this is often misleading. You can buy in the best location in the world—even Beverly Hills—but if you overpay or it doesn’t have cash flow, you’ll lose money.

Yes, location is important, but if you had to choose between a great location with a bad return or a less desirable location with a strong return, I would choose the strong return. For example, I lived in Boca Raton, Florida, for 20 years. It’s an upscale, highly desirable area. If you’re buying for appreciation potential, that makes sense. If you are buying to live in it that makes sense. But if you are buying it as a rental property it won’t cash flow. If you are buying rentals, you’re not living in the property—your tenant is. So focus on cash flow.

When you buy rentals, what matters most is how much rent you can get relative to the purchase price and whether it will cash flow.

Cash flow is rule number one. If you’re starting out, Section 8 is a good place to begin. I’m not saying you’ll stay there forever—eventually, you may want to own rentals in higher-quality neighborhoods with higher-quality tenants—but when starting out, cash flow is key.

Areas with low prices and high rents give the best returns. A great place to start is by checking Section 8 rent amounts with the HUD tool located at www.lexlevinrad.com/hud. You can enter your State, City, and ZIP code to see what HUD will pay for a three- or four-bedroom house. That’s variable number one, understanding how much rent you can get. The second variable is purchase price. How much should you pay for the property? That depends on the condition of the property, which is why it is so important to understand repair costs.

We currently have an unusual set of circumstances making Section 8 Rentals an especially good opportunity. First, real estate prices peaked in 2022. In Florida—especially the condo market—prices have since dropped significantly. In some areas of Florida, I’ve seen 30% declines from the peak. I have seen houses that can be purchased for $210,000 that were selling for around $300,000 in 2022. Those sellers are the most motivated sellers, they are the ones that have to sell. But these are houses that are not in bad shape. Just a seller that is motivated. So if houses in these markets are selling for that kind of a discount then how much are the boarded up vacant houses that need work selling for? The answer – around 50 cents on the dollar. And that is today in August 2025.

Some markets, like Boca Raton, are still holding strong. But others like Miami, Cape Coral, Palm Bay, Kissimmee, Winter Haven, North Port, Naples, Orlando and similar—have dropped significantly. It’s not just Florida. Markets like Houston, Las Vegas, and Phoenix have cooled considerably.

Purchase price is important. How much rent you are getting is important too. Section 8 rents are set by the government, and because of inflation, HUD’s rent amounts have increased dramatically. Properties renting for $1,500 two years ago may now rent for $2,000.

This means that while prices have come down, rents have gone up, creating cash flow opportunities for Section 8 rental properties.

For example, in Florida, a $200,000 ARV (after-repair value) house might rent for $2,000 on Section 8. That meets the “1% rule”—rent is 1% of purchase price. Traditionally, the rule of thumb was not to pay more than 100 times monthly rent.

If you buy at full retail price, put 25% down, and get a conventional mortgage, you might have cash flow, but with current interest rates, you probably will not (especially after factoring in insurance and property taxes). I teach my students how to buy wholesale real estate at a discount NOT to buy retail. I think that is what most new investors miss. They think buying a rental means calling up a real estate agent and going to look at some properties and getting approved for a mortgage. Or searching on Zillow or Redfin, or even the MLS. Well if that is you my friend you have a lot to learn and you need to be in my real estate training program ASAP. You will not make money with that strategy.

We don’t buy houses from real estate agents. Real estate agents wouldn’t know how to  find a good deal if it bit them on the a$$. We buy houses directly from very motivated sellers at 50 cents on the dollar at a huge discount. The house that I am talking about on this podcast, that was purchased for $110,000 and closed yesterday (I waited until after closing to release this podcast) is from a motivated seller who has not paid their property taxes and was going to lose their house. The ARV on the house is $220,000, so I bought that house at 50 cents on the dollar.

If you want to be a real estate investor you need to learn how to find motivated sellers. This deal that I purchased for $110,000 has $50,000 in profit potential. That’s one deal. One house. You think real estate training is expensive? You think the cost of attending my real estate boot camp is expensive? Try lack of training – how expensive is that? Imagine if my real estate students who will be at my Buying Rentals and Building Wealth Boot Camp next weekend did not sign up for my training program. Would they be millionaires now? Stew on that a bit and tell me the excuse you have going on in your head about why you won’t be attending my boot camp next weekend! Maybe you don’t believe that it’s possible to buy houses at 50 cents on the dollar? Or that it’s possible to buy houses with no money down.

The best advice I can give you is this. Show up. Meet my students. Talk to them. Ask them for the addresses of their properties, hear their stories. They will be standing in the front of the room at the boot camp sharing their story. Be there. It is very inspiring to hear how they have increased their net worth so much by owning rental properties and Airbnb’s. It will inspire you to start building wealth and buying rental properties too. It makes me proud as a real estate mentor, that I have helped them build wealth with rentals like that. That is why I teach. I change people’s lives. That is my calling. And if you let me, I will change yours!

If you want to build wealth with rental properties learn how to buy unlimited real estate with no money down with the Buy, Repair, Rent, Refinance (BRRR) strategy. With this method you buy a house at a discount from a motivated seller, fix it up, rent it out to a tenant, and then refinance the mortgage.

If you want to learn how to employ the BRRR Method and how to be able to buy rental properties with no money down, then make sure you do not miss the Buying Rentals and Building Wealth Boot Camp that is coming up next weekend . The boot camp dates are Friday August 22 to Sunday August 24 and if you want a ticket call (561) 948-2127 Monday Morning at 9 a.m.

There are now only 2 seats left, so if you want to learn how to buy houses with no money down with me teaching you live at a 3 day training event then do not miss this boot camp! I only teach it once a year. Also, we have a huge price change coming up after this boot camp (next week). Let’s just say that the next boot camp will cost a lot more than this one. So be smart and grab one of those two seats. Or don’t. The choice is up to you. Either way I will be there as will many of my coaching students. You definitely want to hear their story. I have no less than 8 of my students who will be there next weekend sharing their stories on how they purchased their first rental property with no money down. Some of these students are already millionaires. All of them have increased their net worth by hundreds of thousands of dollars. Like I said if you think education and training is expensive, then hear their stories and then tell me what you think. Trust me, you don’t want to miss this!

So to recap, in order to employ the Buy, Repair, Rent, Refinance strategy, you want to buy at 50–60 cents on the dollar. For a $200,000 ARV house, that means paying around $100,000–$110,000. This is possible if you find motivated sellers—people in foreclosure, probate, tax delinquency, bad tenants, fire or flood damage, etc.

Once repaired and rented, you refinance at 75% of appraised value. If it appraises at $200,000, the bank will lend $150,000. If you bought and renovated for $150,000 total, you get your money back. If it appraises higher, you may even pull cash out.

The challenge for new investors is finding these discounted deals. That’s why I focus on teaching motivated seller marketing.

If you don’t have the cash to buy and repair, there are creative ways to raise it—private lenders, partners, 401(k) loans, home equity lines, even credit cards for materials. I often lend my coaching students money for their first deal if it’s a good one.

Your mindset is key. Many people think they can’t do it because they don’t have the cash. But with the right deal, money is not the problem—finding the deal is.

Now is a rare opportunity: prices are down, rents are up, and foreclosures, short sales, and bank-owned properties are increasing. With the BRRR method, you can buy with little or no money down, create equity, and generate monthly cash flow.

We have the Buying Rentals and Building Wealth Boot Camp coming up next weekend. To learn more visit https://www.lexlevinrad.com/buying-rentals-building-wealth-boot-camp/

We have 2 preview tickets left for the Buying Rentals and Building Wealth Boot Camp.

To grab one of those 2 tickets call my office on Monday morning at 9 a.m. (561) 948-2127