30 Rentals in 5 Years with Small, Affordable Multifamily Properties

Henry:
In 2021, Jesse Walters bought his first rental property, a 20% down turnkey single family home. But shortly after that, when interest rates went up, Jesse did what nobody expected. He bought even more. In 2022, he bought another rental. This time, it was a value add property. And then in 23, when rates were 8%, Jesse bought a fourplex that still brought in $3,000 a month in rent. If it worked at 8% rates, why stop there? In 24, he went bigger, flipping four houses and buying two rentals. And now, his biggest deal to date, 11 rental units that he bought in 2025, forget this, $0 down. All small multifamily, all affordable housing for his community, and he’s going to make a great profit. Jesse has slowly scaled his portfolio now to around 30 rental units. When just five years ago, he had zero. Everyone is telling you real estate is impossible to buy in 2026.
Prices are too high. Rates are too unpredictable. Today, Jesse’s laying out exactly how he scaled, even with high rates and even when the market was going sideways. What’s going on everybody? I am Henry Washington, host of the BiggerPockets Podcast, and I’ve got my co-host, Dave Meyer here today. What’s going on, Dave?

Dave:
Not much, man. Excited for this episode though. We got a repeat guest who’s doing some cool things in real estate and eager to catch up with him because he’s really showing a lot of people what is possible to still do in real estate here in 2026, even though everything’s confusing and annoying and sometimes frustrating.

Henry:
Yes, we do. It’s always fun to have repeat guests back. It’s cool to hear people’s stories, but it’s oftentimes even cooler to see how they continue to grow and evolve because that is also a part of real estate investments. And so let’s get to it. Let’s bring Jesse Walters onto the show. Jesse, how are you?

Jesse:
Hey, thanks for having me. I’m doing great. Yeah, it’s been a pretty crazy last year and a half, and yeah, excited to talk about it.

Henry:
Yeah, so it’s been about a year since you are on the show. And for those who may have missed your episode back then, why don’t you give us just a little bit about your background and how you first got into real estate?

Jesse:
Yeah, so it really started in 2017. My wife got licensed as an agent and she started growing that career. And I was in the background watching that vicariously. We had a coffee business going at that time too. In 2021, we bought our first rental. It was a single family home in Columbia. We bought for 165, I believe. I put 20% down, 30-year fixed loan, nothing fancy. Didn’t know what we were doing. I hung up a mirror in the bathroom and that’s all I did in that thing and we rented it out. And I did that one myself. I didn’t even hire it out.

Henry:
Oh, look at you.

Jesse:
Yeah. We got that thing rented out for 1,500 a month. In 22, that’s when I really dove into BiggerPockets and started learning a lot more. I’m like, “All right, I need to do something else here.” So we bought another single family. It was on the MLS. Need a little bit of work, wasn’t too bad. We put about 15,000 into it. It was a construction loan, and we bought that for, I think, 130. And we bought 145 in it, rented that out for 1,500 a month. And in 23, that’s when things really started taking off. We bought a fourplex that was on the market. It was actually my hometown, about 30 minutes away, and we bought it for 190,000. One of the units was a vacant when we bought it. I put it up for rent. It was like a two bed, one bath, small town.
We put it up for 700 bucks a month, and I got close to a hundred phone calls or emails, whatever, on this thing. Geez. I was like, “Ooh, I definitely undershot this. What are we doing here?”

Dave:
That’s good market feedback, learning something. For sure. You underpriced it.

Jesse:
So I guess two things learned that. One, I was under market, and then two, there’s a very big need in this town for rentals. I just did realize that there was that much demand and so little supply there. So I rented out at the price I had it marketed because I didn’t want to go back on my word at that point. The other tenants there, we raised up the rents a little bit. One decided to move out. I kicked that one up to 800 a month. I just kept going up 100 bucks every time until we figured it out. About 18 months into that one, we had all four units turned at that point, and we were bringing in about three grand a month on it, and we bought it for 190. That’s awesome. Yeah. After we got that one done, I really started focusing in that town and buying rentals there and really pushed it.

Henry:
It sounds like you learned a lot about demand in your area at the time, because it seems like you were able to buy things, add value, and then your rents seemed to be, sometimes it sounded like even more than you were expecting, which shows you that there was demand in the area. But I think one of the things that you do well, because I’ve known you for a little bit of time, is you have a lot of relationships in the area. One, I think because your wife is an agent, but two, because you’re from there. Did you leverage relationships to find these off-market opportunities, or how are you bringing in these opportunities?

Jesse:
I guess starting, what really helped us was we knew a lender, and he was very blunt with us, just telling him yes, no, or this is a good one or not. And he was really vital with that first rental we bought. How we find most of our deals now, one is mailers. So last year we bought five properties on postcards, and then the rest is agent referrals or online like Investor Lyft or Facebook, things like that. But I have one agent specifically, he sent me four or five deals the last couple years. Another one sent me two or three. Typically, what’s happening is these agents, they get a listing, these houses need a bunch of work. They don’t want to put them on the market because they’re going to be a hassle. They’re going to sit there a while, things like that. And they know I do what I do and they’re very transparent with me.
This is what it is. This is the amount of money they need to get out of this thing. And I usually know the price going in and we just try to meet in the middle and create a win-win for everybody. And they don’t have to go to the market. The agent wins. I pay the agent’s commission when we buy it as well, so they still get paid on it. And I think that’s what really helps snowball it too is like, well, the agents know they’re still going to get paid if they call me.

Dave:
Yeah. Yeah.

Henry:
I was literally going to ask, well, how do you get these agents to call you over everybody else? But it sounds like you’re making sure that they get the thing that’s most important to them. If they know they’re going to get paid and they get the deal done faster, call Jesse. Okay. Yeah,

Jesse:
Exactly. Yep. I don’t negotiate their commission or anything. I’m like, “I’m going to work in the 3% commission for you right off the top and we’ll get it done that way.”

Dave:
I think this is just a philosophy people should be embracing everywhere in their investing career. It’s just like figure out a way to create mutual benefit. This is exactly what we talk about on the show, but agents deserve to make money. They are working hard. They’re bringing you a deal. They should make money for bringing you that deal. So going to them and acting like you’re going to get their best deals, but you’re going to pay them the least just does not make sense. It’s just not going to work and maybe it’ll work once, but they’re not going to call you again next time. I think this is … We talk about real estate being a relationship business all the time, and this is the opportunity for you to stand out. Figure out a way to build good relationships by creating mutual benefit for your tenants, your vendors, your lenders, everyone.
Jesse’s figured out a great way to do it. It’s why he’s getting great deals. And it’s a model that pretty much everyone can replicate as well.

Henry:
I call it speaking to the people in the what’s in it for them. When you talk to people, if you can speak to them in the words or the phrases or highlight the things that you can do that help them get to the thing that they want to get to, they’re going to want to talk to you more. They’re going to remember what you have to say. They’re going to remember that they want to work with you because you’re speaking to them in the language that makes the most sense to them. Agents want to be able to get paid for the hard work that they put in. They want to be able to close quickly and they want their sellers to end up essentially being happy so they can create repeat business. And I think oftentimes when we ask people like, “How do you find deals?” And they say, “Networking.” And that doesn’t really sound like a strategy, but Jesse’s telling you exactly how he networks for deals.
This is what networking looks like for Jesse. You have to figure out what networking for deals looks like for you. So if we round that out, you’re networking, you’re using direct mail, so you’re sourcing leads. You’ve got a lender, so you know you’ve got the funds. So really it’s just a matter of analyzing the leads and making the offers so that you can close on the deals.

Jesse:
Yeah, correct. And we don’t get most of them. We make-

Henry:
Say that again.

Jesse:
Most offers I put out there, they say no. It is not like a, I’m just, “Oh, this house showed up. I buy that when this house showed up. I buy that one.” No, I’m going to look at houses, any kind of property multiple times a week sometimes and it’s just no, no, no, no. I’m like, okay, where’s the yeses?

Henry:
About how many offers would you say that you make before somebody says yes, typically? I

Jesse:
Would say it’s like one in 10 probably. Yeah.

Henry:
That’s pretty

Jesse:
Good.

Henry:
That’s pretty darn good. It’s very interesting and cool to hear how you’ve grown your business. It sounds like you really picked up steam in 2023 and 2024. 2025 was a pretty challenging year for almost every real estate investor I’ve ever talked to. So talk to us about how your business evolved from 2024 into 2025.

Jesse:
So in 2025, just to go down quickly here, single family, it was a 32 slab built in 2015. We bought it on a postcard. I bought it for 200 grand. It was a 10-year-old property. It didn’t need much. It was all cosmetic, but 15 in it, just paint light fixtures, things like that. And then it appraised at 287 and we have it currently rented out for 2,300 a month.

Dave:
Wow.

Jesse:
No,

Dave:
That’s great.

Jesse:
And that’s a very low maintenance property after that. It’s being a 3-2 slab as well. There’s no basement. I don’t have to worry about basements leaking, nothing like that. So I’ll take that one for sure. Another one we did, this was one of my favorite ones I bought. It was a duplex built in the 90s. So pretty straightforward as far as construction-wise, things like that. So we bought that for 210. I didn’t even negotiate that one. He came in, he’s like, “I want 210 for it. ” I’m like, “Yep, here you go. ” And we put 30 grand into it on both sides. It was just cosmetic and it appraised for 330. Wow.

Henry:
So I

Jesse:
Walked in almost 90 grand of equity on that one and it’s currently run out for 2,800 a month on both sides, gross rents. And I’ve got 240 in it and I DSCRed that one. So I pulled all my money back out and then some, and it’s on a 5.8 interest rate with a 30-year-old.

Dave:
Wow,

Jesse:
That’s awesome. So that one was perfect.That was the best of way it could have gone. I got no money in that one.

Henry:
You did a full Burr in 2025?

Jesse:
Yeah.

Dave:
Wow. I could not believe show it off now. You should show it off.

Jesse:
I know. I got very lucky with that one. That’s the only one I found for sure or some. Yeah, the rest of them kept telling me no.

Dave:
So Jesse, when you’re doing these deals, you’re finding them in cool ways. Is your preference to do buy and hold or flipping or how are you thinking through applying a strategy to the leads that you’re getting?

Jesse:
I actually learned this formula from Henry. So gross rents minus 30%, and then that pays the taxes, mortgage insurance. If that’s like breakeven or a little bit above, I typically hold it because at that point it’s fully renovated and then I don’t have much to do for the next few years anyway. And then after a few years, I’ll reevaluate if I want to keep it or not, if it’s making me money or something like that.

Henry:
Because

Jesse:
I have equity in all these in some capacity, so I can always sell them later. And if they don’t work out, I just sell them. If they don’t cash flow, they don’t do that, which is most of them, really, I’m flipping them.

Henry:
Okay.

Jesse:
Generally speaking, I’m flipping singles and keeping the multis, but it doesn’t always number out that way.

Henry:
Just to be clear, I know I taught you the number, but I want to make sure everybody understands. So it sounds like you’re looking at your property and you’re taking rents and you’re subtracting debt service, taxes and insurance, and then you’re subtracting 30% for expenses. And if you’re positively cash flowing after that, then it’s a solid deal because that’s fairly conservative underwriting. Then you do the thing that Dave and I have been talking about for multiple episodes, which is evaluate your deal after you have got it to where it is actually performing to see if it is actually performing like you underwrite to. And then you can make a decision whether you sell that or keep that down the road. Is that what I’m hearing?

Jesse:
That’s exactly it. Yeah, because at the end of the day, there’s equity in it, all VS have equity. So it’s easy to sell later and pocket some money at the end of the day, worst case scenario.

Henry:
Yeah. I mean, I think that’s just real estate strategy 101. A, you’re walking into equity day one, which is what’s most important for me in my portfolio as well. Yes, I want it to cashflow. I do, but there are some properties I am willing to break even on depending on location and there’s all these other factors that you consider, but I never buy at retail value. I always walk into equity because the goal is if you have more than one exit, you have a way out. And that’s what people who are in trouble in tougher financial times find themselves in a difficult position because they don’t have a second way out. Their first monetization strategy maybe isn’t planning out like they thought. So maybe that long-term rental isn’t long-term renting like they want it to, and they bought it at the top of the market.
Now you find yourself in a place where if you want to sell it, you’ve got to throw money on the table to sell your property. That’s where you get in trouble. So walking into equity and being able to have cashflow as an option is a way to stay air quotes safe. Is it foolproof? No, but it is much safer if you can walk into some equity.

Dave:
Better to have some options.

Henry:
All right. This is cool. I think there’s a lot of great information in here for people who are either beginning investing or starting to grow and scale their portfolio, getting an inside look at how Jesse was growing and scaling his portfolio. But I do want to dive into this flip turned flop, and we’ll do that right after the break.

Dave:
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Henry:
All right, we’re back with investor Jesse Walters. Now, Jesse was growing and scaling his real estate business in 2025, which is pretty cool because a lot of people were not growing and scaling in 2025, but it does sound like you ran into a bit of a hiccup. Welcome to the club of people who did a deal in 2025 that didn’t work out like they thought. So I’m interested to hear how was your flip and did it turn out to be a flop or did you get out by the hairy or chiny chin chin? The

Jesse:
Hair of the chini-chin-chin is pretty accurate statement, I think. So yeah, this was a ranch walkout. It was a three bed, two bath with a full unfinished basement on it. We bought it for 265.

Henry:
That seems like a higher price point than you normally buy at.

Jesse:
It was, yeah.

Dave:
Uh-oh. Henry’s red flags are going off. Yeah,

Jesse:
For sure. We bought this thing for 265 and I budgeted about 40 grand going into it. Really it was mostly to finish out that basement and add some square footage. Upstairs was just paint, countertops, flooring, light fixtures, nothing major. I undershot that. It ended up being like 65 grand renovation. And also we went over intentionally in some ways because the market was turning and there was another house on the street that wasn’t selling. It was literally right next door, same exact house, and it was just sitting there. And I was watching this thing. I’m like, “Well, my house needs to be nicer than that one to sell it. ”

Henry:
So I’m

Jesse:
Like, “I’m going to put some nicer finishes in this one.” So we went 25 over in that. It sat on the market for four months,

Henry:
So

Jesse:
All through winter. We sold it in late January, early February, I think, of this year. So I budgeted to sell it for 375. We got it under contract for 373. So I was like, “Okay, we’re okay. We’re going to get out of this. I’m still going to make a little bit of money. We’re okay.” We get two inspections and I did not catch it. The deck, it was a double decker deck. There’s a platform in the basement and platform on the main level and that thing was leaning and that was a $10,000 fix to get that thing. The other thing too, I was going to do it, but because we already went over budget, I just didn’t and it needed a roof. I knew that going into it, but I was like, “I’m going to try and negotiate this into the deal after we’ll get it done that way.” And it came back and by the time we negotiated the roof and then that deck, I was like, I came out, I think I made 600 bucks.

Dave:
Woo. There you go, dude. That’s two tanks of gas these days. That’s not that bad. Honestly, I feel like you learn a lesson and you come out even, which is basically what you did. That’s a win in my book, but let’s break it down. So where’d this thing go wrong for you, Jesse? You’ve probably had some time to think about this. What was the issue here?

Jesse:
They gave me a number that they needed, and this was on the brink of foreclosure.

Dave:
When you were buying, right? Yeah.

Jesse:
I’m sorry. When we were purchasing it. Yeah. So the sellers were, they’re like, “We are going to lose this in two weeks if we don’t sell it. ” And I was like, “One, I need to close in two weeks. And then two, they have to have this number or is the bank just taking it? ” So I gave them their number and I fibbed on my own underwriting just to get to their number so I get

Dave:
Them out. How bad? What did you want to pay for it?

Jesse:
It was maybe 10 grand above what I wanted to. It wasn’t horrible, but it was like-

Henry:
That’s a deck.

Jesse:
Yep. And so it was close enough where I took the deal. It was like 10 grand. I’m like, “10 grand. I can flex it. I can be okay here and still do it. ” And it got the amount of foreclosure too, because they were in a tight pinch and I was like, “I can actually help them here and not foreclose.” Yeah.

Dave:
That’s hard to not do.

Jesse:
Yeah. So let’s do it. And then the underwriting on the renovation, I wasn’t paying attention to the market. It was right when it was turning and I didn’t pay attention to like, okay, I can’t just make this a standard thing. It’s a little higher price point. I need to be putting a really nice bathroom in this thing and this isn’t just a basic reno. It’s like I got to have glass, shower doors, tile, floor to ceiling, things like that to make this thing pop.

Henry:
Every investor who flips a house is going to find themselves in this position at some point where you have to either bite the bullet and put more money into it. And sometimes putting more money into it doesn’t mean that you get to take it out. It might just mean that you get yourself back to break even. And so it’s actually, it is a math problem. And that’s where either you having your real estate license or you having a good investor-friendly agent is so important. People think it’s only important when it comes to just negotiating your sale or when it comes to somebody buying. But these situations are where your agent really makes their money- Totally. … because they’re the ones that are selling the properties and seeing what people are buying or what people aren’t buying, especially when the market starts to turn. There are still transactions happening when a market’s turning, but the transactions are happening on certain properties offered at certain price points with certain amenities.
And you really have to know what those are so you can try to put your property in that best position to sell when the market is not working in your favor. And sometimes it does mean you have to bite the bullet. It may mean that you have to bite the bullet to spend 20 grand to make the ARV you were expecting to make, not even to make a new higher ARV. And that is a hard pill to swallow as an investor, to throw good money at what seems like a bad problem. I’ve got a house like that right now. I’ve got to spend $15,000 on a fence and fixing a driveway that I didn’t think I was going to have to do in order to sell this house for the exact same price point that I planned on selling it beforehand. That sucks, but it’s better than holding onto something that’s bleeding you dry.

Dave:
Right. Because you’re basically making the analysis here, Henry, that you’re going to spend 15 grand, but if you don’t, it could sit on the market for another three months or four months. I don’t know if that would cost you 15 grand, but it will sit and you still might need to put 15 grand into it four months from now once you learn the lesson the hard way, right? Yes. This is true with Burr investing too. Yes. It’s true with every kind of value add investing where eventually you need to be able to make a call if your plan is working or not. And it’s not a fun place to be.

Henry:
And you got to take your pride out of it.

Dave:
Exactly. And that’s why I was asking about the calculation because I really think it’s hard, but you got to just do it by the numbers. You have to say, “Here’s what the ARV is going to be. ” Or if you’re a rental property investor, most of the time when I’m doing this for rental property, I’m trying to get my rents to X. And sometimes the market changes and you see the property next door not renting and you thought you were going to be able to get that for rent, right? And you need to start making these decisions for yourself. How much more am I going to have to put in and how much is that going to change my outcome? And is that better or worse than my initial plan? It’s super easy to go on gut where if you’re flipping a house and you go walk a comp that has an open house and you’re like, “Oh man, they have nicer landscaping.
I got to go landscape.” Yeah, maybe. But how much is that going to cost? How much is that going to change the ARV? It has to come down to the numbers and it can’t just be a panic or a gut reaction.

Henry:
Well, thank you so much, Jesse, for A, just being extremely transparent with everybody. It’s hard to share about deals that didn’t go well, but those lessons are some of the most valuable lessons for people to learn. Look, if you’re listening to this, nobody’s batting a thousand out here. Everybody’s done a bad deal or is doing a bad deal currently or will do a bad deal at some point in the future. What’s important is what do you learn from those deals that don’t go well? How do you not repeat the mistakes from those deals that don’t go well? And make sure that bad deals don’t take you out of the game. That’s really the only way to truly fail is letting a bad deal completely wipe you out. So it sounds like you were able to get out by the hair of your Chiny Chin 10, so we appreciate you sharing that lesson.
All right. We’ve got a lot more to learn from investor Jesse Walters, and we’ll get to that right after the break. We are back on the BiggerPockets podcast with investor Jesse Walters out of Columbia, Missouri. Let’s jump back into it. We get it. 2025 had some deals that weren’t fun for a lot of investors, but is there any deals in 2025 or early 2026 that maybe you’re super proud of?

Jesse:
Yeah, I’ve got one in the works right now, a big learning experience, but I think it’s going to be really cool when it’s done. We bought an old motel in my hometown, and this is the town I was talking about where we underestimated the rents and there’s a big demand for rentals there. And so it is a 18-room motel and it has a two-bedroom apartment attached to it for the owner’s suite or manager suite on it too. I think the whole thing’s like 6,000 square feet and it’s kind of like a half circle building. So it has a big parking lot in front and things like that. So we gutted the whole thing now and I underwrote it as a 10-unit apartment building and I think we can squeeze an 11th unit out of it.

Dave:
Wow.

Jesse:
That thing, we bought it for 325,000.

Dave:
The whole motel?

Jesse:
Wow. Yeah. Yeah. What? So it was built in the 50s. It’s like four sided brick. It’s a tank. I’m estimating a $300,000 renovation on this, so it’s a big one. So we’re building a lot of bathrooms, kitchens in them, but they’re going to be small like kitchenettes. I’m projecting this thing to bring in a little over nine grand a month in rent, and we should be in it maybe in the 600,000, maybe 700,000 when it’s all done.

Henry:
That’s a pretty good deal first and foremost. Second of all, you just whipped up and bought a motel. Was it on the MLS? Did the agent send it to you? How do you get a motel lead?

Jesse:
So actually that flip, that was a flop, it was actually right down the road from that house. And I was driving home from that project one day and there was a sign in the yard said for sale. And I got the number and it was actually listed by an agent in the MLS of all things. But the way he categorized it in the MLS, it was weird and it didn’t show up on the hot sheet. It didn’t show up on Zillow. It was weird how he did it that way. And so anyway, I called the agent, I knew him and I was like, “Hey, I’m interested in this thing.” And it turns out there were two motels for sale when I talked to him.

Dave:
He was like, “You’re the first person to call.” Yeah,

Jesse:
Exactly.

Dave:
No one else has seen this listing.

Jesse:
Yeah. So he said, “Well, there’s actually two of them. One’s down the road from the other one.” I’m like, “Well, send me both of them. Let me look at them and just see what we’re working with here.” And the one we ended up buying wasn’t even the one I saw in the first place, when I drove by. I put a 60-day close on it because I didn’t know what I was doing. I was

Henry:
Like,

Jesse:
“I need to figure this out. ” I was like, “And I need those two months to get contractors in there and talk to … ” I didn’t even have to finance and figure it out at that point either when we put it on the

Henry:
Contract. Yeah, that was going to be my very next question is, how the heck did you find the money for this thing? Because it’s not a traditional deal. So what we’re talking about folks is taking a motel, which is a commercial building essentially, and turning it into residential living space, which is technically still commercial because it’s more than four units, but that’s a different business model than the way it’s currently operating. So did you run into any hurdles like that trying to get it financed?

Jesse:
Absolutely. It was a big eyeopener with banks and me, especially local banks. But the bank I used a lot for the last couple years, they told me, they were like, “We want 25% down all cash and you can’t use collateral.” I’m like, “Well, that was 150 grand cash down.” I’m like, “I can’t do that. I’m going to have to cut it.

Henry:
”

Jesse:
I ended up going to a couple other banks that were local to that area. I talked to them and one of them was able, he still wanted 20% down. However, I was able to use cross collateralization and I had a property, it’s fully paid off. It’s a little condo we bought in 2024. It’s fully paid off and we use that as the collateral. So I’m in this with no money down right now.

Henry:
Wait, so you went from having to put 20 some odd percent down all cash- To zero. … to zero by making a couple of phone calls?

Jesse:
I had to get spiffy and go to banks and sit in their office and tell them I knew what I was doing, but yeah.

Henry:
Yeah, that was going to be my next question is, did you have to show them that you had a track record? How did you give them the confidence that you could pull this off?

Jesse:
Yeah, so that was a big one. They were like, “I’d see you’ve done some flips and you have some construction background and stuff, but you’ve never done anything this big.” And I was like, “Yeah, you’re right. However, everything we’re doing in this building I’ve done before is just more units. It’s

Henry:
The

Jesse:
Same thing. I’m just multiplying it. ” So it’s not like it’s a new territory, it’s just more of it. And once I got that message across to them, that helped them tremendously. And then also the big one too, it isn’t just me GC and this thing. I brought in an actual home builder and a reputable one that most people know and he is backing me behind all this and that was, I think, what sealed the deal with the bank. They’re like, “Okay, this isn’t just some random guy trying to live his dream and flip this thing. He actually brought in the right people to do it and resources and things like that. ”

Henry:
What are you renting these out for per unit? What’s the goal here?

Jesse:
Yeah, so we want to keep it affordable. The way we have righ now is eight one bedroom apartments and then three two bedroom apartments. And the one bedrooms, I’m guessing I can get 850 to 900 for including utilities because it’s all on one meter this

Henry:
Whole hotel

Jesse:
Is. And then the two bedrooms, I think I can get like 1050, 1100.

Henry:
And what’s a typical two bedroom in that market go for?

Jesse:
The other ones we have there now were in between 850 and 900 without utilities.

Henry:
Well, I think this is a really cool deal. A, sounds like it’s going to be a profitable deal, but B, it’s the true real estate win-win. You’re taking inventory that was sounds like maybe not the best inventory for the community. If the city was so super happy and on board, that typically means, hey, this is a problem property and now someone’s coming in, they’re improving it, but they’re not pricing the community out of the property. You’re being able to take something and offer it back to the community at a price point that they can affor Ford. And that’s a pretty special thing to be able to do because there’s gentrification and then there’s revitalization. You’re not offering a product back to a community where that community won’t be able to take advantage of it. You’re going to have to bring in some new higher priced community, but you’re offering it back to the same community in better condition and in affordable housing units, which is not temporary housing because I bet you a lot of those air quotes tenants who were in there before were probably staying there long term and just renting by the week for a lesser quality of unit.

Jesse:
Yeah, that’s exactly what was happening. And a lot of them weren’t even paying rent.

Henry:
Thank you so much, Jesse. Before we get out of here, I just wanted to ask you real quick, I know from talking to you before, you’ve got this pretty unique new construction strategy and a lot of listeners are interested in new construction. I’m doing my first new construction, but you have a unique spin on how you’re able to do new development. So can you just talk to us a little bit? How many new development projects have you done and how the heck are you pulling this off?

Jesse:
It’s been pretty cool to try this. So the same builder that we’re using for this motel project, we partner with him on new construction deals now. So the way we structured this, so last year we did two. We were able to purchase the lots. They’re all on the MLS. We’re not finding these off market things or anything. We represent ourselves as agents. We’re buying them with no commission on it. So we’re getting the price down a lot a little bit. And then the builder, he is building the house at cost. So there’s no builder fee. And then after that, we will list the property on the MLS and we get it sold. We don’t take commissions on the sale either. And then whatever profit is left, we split with the builder fifty fifty at the end.

Henry:
Okay. So you’re essentially a business partner with the builder. You find the deal, fund the build, sell it, and then you split the profit. So do you have a numbers example you can share?

Jesse:
Yeah. So one, we purchased … These were just like three, two slabs. One lot was $52,000. We built the house at cost for 220 and we sold it for 330. So after holding cost, paying the commission to the buyer agents, all those things, the construction loan, all those things like that. So we came out with about a $30,000 profit that we split fifty fifty. So made 15 grand each. That’s

Dave:
Awesome.

Henry:
And there’s a lot of elements that come into play here because A, the builder gets to build because a lot of builders, they’re not great business people. They just want to do it. They want to build houses. Two, you keep your guys busy. That’s the hard part about having new construction crews is if you don’t have work for them, your crews go off and find work somewhere else and then it’s hard for you to start to ramp up. So you allow them to keep their guys busy. They don’t have to take on the loan risk. They get to build the house. And then what’s cool for you is you basically sign docks to buy a lot. You sign docks to close on a loan, and then you sign docs to get paid. It doesn’t sound like you’re doing anything else other than signing pieces of paper.

Jesse:
It is much easier than a flip. Yeah, I don’t. Yeah. I

Dave:
Love … This is my kind of investment. You just sign a piece of paper. I love it. It’s

Jesse:
Great. Yeah. Yeah. We did an open house. I stood in the house for a little bit and it was kind of funny. It’s like the house was done and I walked in and I was like, I guess I technically owned this thing. I didn’t even realize what it was. Yeah. I never stepped foot on the job site. Nothing. He did it all.

Henry:
And your cash outlay, is it just the cost of the lot or are you financing that too?

Jesse:
It’s rolled into the loan. Yeah, it’s all under one.

Henry:
That’s

Dave:
Pretty cool.

Henry:
A lot of people want to build new construction, but haven’t thought about partnering with builders. So thank you for sharing how that model is working for you. Before we get out of here, just kind of give us a quick rundown on where your portfolio is today and what you’re planning on for the future, other than having a super awesome motel conversion.

Jesse:
Today we are sitting at right under 30 doors. This includes when the motel will be done. The current value of everything is right under four million. We did one in 21, one in 22, then 23, 24, 25. We built the 30 doors.

Henry:
And are you focused more on continuing to buy and hold, continuing to flip, or some other option, doing more signing of documents and not doing any work to get paid?

Jesse:
Yeah. We should close next week, I believe. We’re buying three more lots to build on. So I’m going

Henry:
More

Jesse:
Into that.

Henry:
I will also be doing that. Yeah.

Jesse:
So I’m definitely leaning more into that, but it’s kind of weird. We didn’t touch this too much, but I’ve actually flipped a couple duplexes here recently. It’s because they don’t cash flow if I hold them, but I can still buy them at a discount.

Henry:
People pay an arm and a leg for duplexes, don’t they? Yeah. It’s

Dave:
Insane. They do. It’s all BiggerPockets fault.

Jesse:
Yeah. That’s exactly what I’m doing. I’m buying these older decrepit ones that need a little work. I get them fixed up. I rent out one side. I leave one side vacant and I sell it.

Dave:
Exactly. That’s what the agents are. Now you have to sell one side vacant. That’s how you always got to do it now.

Jesse:
And so I did a couple of those so far and it’s a little easier than a single family because I know I can sell them quickly. And I don’t know. That’s great. That’s kind of eye-opening to me now. I’m kind of focusing on that and now these new construction things. So I don’t know. My game is changing in 2026 a little bit.

Henry:
Thank you so much, Jesse. I mean, I think this is just a great real life investor story. You get started, you do some deals, you learn some lessons, you make some pivots, you take some bumps, and then you make more informed decisions as you continue to grow and scale. You leverage your superpowers, which is being a broker, your wife being a broker, and being able to invest in your backyard, leverage your relationships to the max and build a business that suits your life. This is real estate investing. This is what you do. This what you want to do. So I love diving deeper into some of these stories and seeing what’s really behind the curtain of a real middle America real estate investor. So thank you so much for sharing those stories. Thank you so much for being vulnerable with us and talking about some of the things that didn’t work as you planned them.
And we just appreciate you being here.

Jesse:
No, thank you. Yeah, I always have fun talking with you guys. And same with BiggerPockets. I’ve learned so much, especially getting started and it’s been huge for … I appreciate all you guys do too.

Dave:
Well, thank you. We appreciate that.

Henry:
Thank you to Jesse for joining us on the show today. If you think the BiggerPockets audience could learn from your own investing journey, you can apply to be on the show as well. Just head over to www.biggerpockets.com/guest and fill out the form. I am Henry Washington. We’re here with Dave Meyer and we’ll be back with another episode of the BiggerPockets Podcast in just a few days.