Over the past decade of teaching real estate investing, I’ve noticed something fascinating:
… almost everyone falls into one of three distinct patterns.
Today, I want to share these patterns with you.
As you read, you’ll likely see yourself in one of them. More importantly, you’ll understand why these patterns exist — and what to do about them.
Let’s dive in …
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Pattern #1: The One-House Wonder
You’ve done well with your primary residence.
Through a combination of good timing, smart decisions, and consistent payments, you’re sitting on significant equity.
Maybe it’s $100,000, maybe it’s closer to $250,000.
But that equity? It’s just … sitting there.
You understand, intellectually, that you could tap into it. You’ve heard of HELOCs and cash-out refinances. You know that leverage, used wisely, can multiply wealth.
But then the “what-ifs” creep in:
- “What if I take on too much debt?”
- “What if interest rates keep rising?”
- “Why would I borrow against my house when rates are this high?”
- “Maybe I should just stick with index funds…”
The irony? Your caution around debt likely helped you build this equity in the first place.
But now, that same caution might be holding you back from your next level of wealth building.
As the saying goes: “What got you here, won’t get you there.”
Pattern #2: The Priced-Out Professional
You’re doing everything “right.” Making a decent income. Saving diligently — at least 20 percent of your income.
You understand money, you’re disciplined, and you’re ready to invest.
But every time you look at home prices in your area, you feel that sinking feeling.
Whoomp – whoomp.
You’ve watched as properties that were once attainable have crept further out of reach.
First it was rising home prices. Now it’s rising interest rates, too.
The classic “American dream” feels like a cruel joke. In your market, even a modest starter home would strain your finances.
So you keep renting, keep saving, and keep wondering if you’ll ever find your entry point into real estate.
You think you’ll be a renter forever.
(And plot twist: you might be. But you could ALSO simultaneously be an out-of-state owner. I’ll elaborate on this below …)
Pattern #3: The Sideline Sitter
You’ve been thinking about real estate investing for years.
You’ve read the books. You’ve watched the videos. You’ve even run the numbers on potential properties.
But something always comes up:
- A job change
- A new baby
- Training for a marathon
- The market feeling “too high”
- Your spouse’s concerns about risk
You tell yourself, “I’ll start investing when…”
- The market cools off
- Interest rates come down
- Work settles down
- The kids are older
- Your spouse feels more comfortable
The challenge? There’s always another “when.”
Here’s what these patterns have in common —
… they’re letting today’s temporary conditions prevent them from building tomorrow’s wealth.
- The One-House Wonder sees their equity as something to protect rather than leverage.
- The Priced-Out Professional sees high prices as a barrier rather than an opportunity for creativity.
- The Sideline Sitter sees the perfect moment as something to wait for rather than create. (Eep! Sound familiar?)
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But here’s what I’ve learned from teaching nearly 3,000 student investors: while timing matters, strategy matters more.
Yes, home prices are high. Yes, interest rates have jumped. Yes, there’s economic uncertainty.
But consider this:
- Every successful real estate investor started in an “imperfect” market
- Every market condition creates its own unique opportunities
- Every obstacle has its corresponding strategy
Let’s break down what this means for each type of pattern:
For the One-House Wonder:
Let’s talk about Return on Equity (ROE) — a metric that might transform how you view your home equity.
Right now, your equity is earning only market appreciation. That’s like having a high-powered engine but never shifting out of second gear.
Sure, market appreciation in your area might be doing well at the moment. But historically, real estate nationwide has appreciated at a long-term annualized average of around 4-5 percent.
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This means that if you leave your equity tied up in your primary residence, you’re committing tens of thousands — or even hundreds of thousands — to subpar returns.
Professional real estate investors obsess over ROE because they understand that equity isn’t just about ownership — it’s about performance.
Think about it this way: If you have $200,000 in home equity, and your property appreciates 5 percent annually, that equity is generating a 5 percent unrealized return.
But what if you could use a portion of that equity to acquire a cash-flowing property?
Now you’d be earning appreciation on multiple properties PLUS monthly cash flow.
Your money would work harder, so you don’t have to.
This isn’t about gambling with your equity — it’s about putting it to work strategically. Just as major companies measure their ROE to ensure efficient use of capital, you can apply the same principle to your real estate portfolio.
The key is starting with a portion of your equity and proving the concept before scaling.
And as I constantly tell the students in my rental property investing course, DON’T over-leverage, which comes from being strategic, thoughtful, and writing a clear Investment Master Plan around your ideal equity-to-debt ratio across your portfolio of properties.
Your equity isn’t just a safety net — it’s seed capital for building real wealth. There are ways to leverage it strategically while maintaining security.
For the Priced-Out Professional:
You have two clear paths forward, and both can work beautifully in today’s market:
The Geo-Arbitrage Strategy:
Keep renting in your high-cost area. Invest in cities or towns where the price-to-rent ratio is landlord-friendly.
“The what?”
The price-to-rent ratio. It’s calculated as home price divided by annual rent.
- If the P/R ratio is 15 or less, it’s better to buy.
- If the P/R ratio is 16-22, you’re in a grey zone.
- If the P/R ratio is 23 or above, it’s better to rent.
If you live in an HCOL, it’s mathematically better to rent your primary residence, and invest in locations where the P/R ratio is in the teens.
You’re essentially getting the best of both worlds:
You keep the opportunities, relationships, culture, and lifestyle that come from living in an HCOL. You also capture strong real estate returns, remotely.
I’ll use myself as an example: I rent by choice in Manhattan, NYC. I own in Indianapolis, Las Vegas and Atlanta.
Why did I choose to rent in NYC?
- The median price-to-rent ratio in Manhattan is 50.
- The median price-to-rent ratio in Indianapolis is 15 to 18, depending on neighborhood.
Smart money says: rent where it makes sense to rent. Buy where it makes sense to buy.
Anyway, that’s one of two strategies. The other one is …
The House Hack Approach:
Use owner-occupied financing to purchase a 2-4 unit property, or a home with a guesthouse / in-law suite / accessory dwelling unit.
While everyone else complains about high mortgage rates, you’ll have other units helping pay your mortgage.
Even better? You can repeat this strategy every few years, building a portfolio of multi-units with favorable owner-occupied financing.
This is one of the BEST ways to buy real estate, because your tenants are subsidizing your own out-of-pocket costs.
Being priced out of single-family primary residences in your HCOL doesn’t mean you’re priced out of all strategies, everywhere. You’re just priced out of one extraordinarily narrow subset of the market.
Some of the most successful investors I know — myself included — started by househacking or by investing in more affordable, LCOL markets while renting where they live.
For the Sideline Sitter:
Let’s talk about the elephant in the real estate room:
The Procrastination Doom Loop.
You know the one — where you’re constantly researching, learning, planning, thinking, dreaming — but never quite ready to move forward.
Your biggest challenge isn’t lack of information. We’re drowning in real estate content. Podcasts, YouTube channels, Reddit threads — there’s an endless ocean of “expert advice.”
But here’s what actually moves the needle: Strategic action in small, focused doses.
Enter the “Investor Power Hour” concept:
Instead of falling down another 3-hour YouTube rabbit hole, carve out just 30 focused minutes daily.
Think of it as your wealth-building power block — where every minute moves you closer to your first deal.
Working full-time? Perfect. That’s how we all started.
Your investment education needs to be laser-focused. No more scattered learning, fractured attention, or endless research spirals.
Here’s the real game-changer: Adding an engaged community to your focused learning. You get feedback from TA’s and active investors. Live Study Halls to help you learn how to use analysis tools and spreadsheets. Clear next steps.
And accountability partners who’ve turned their own “someday” into “today.”
Because let’s be honest — you’ll make more progress in 30 focused minutes with clear guidance and supportive investors by your side, than in countless hours of doomscrolling down internet rabbit holes.
This is why we built Your First Rental Property (YFRP): so that you can use a step-by-step roadmap. You’re getting a structured path, not a content firehose.
Each lesson builds intentionally on the foundation before it, with clear action steps:
- Watch the day’s focused lesson
- Join our weekly Study Hall sessions for deeper understanding
- Test your knowledge with targeted quizzes
- As you advance, analyze properties using our proven framework and detailed spreadsheets
- Connect with experienced investors in our biweekly Active Investor calls
- Ask me anything at our monthly Office Hours
Instead of generic networking events, you’ll connect with investors who are actively making offers, ordering inspections, and closing deals.
If you post your analysis in our forums, our Teacher’s Assistants will help pressure-test your assumptions. You’ll have a team of mentors looking over your shoulder, pointing out blind spots before they become expensive mistakes.
This isn’t about information overload — it’s about targeted action steps matched to your experience level.
Here’s the truth: Every successful investor started somewhere.
The difference between those who build wealth through real estate and those who stay stuck in “someday” isn’t lucky timing, market conditions, or even starting capital.
It’s having a proven, step-by-step system to follow, and a supportive community to guide you.
Think about it:
A year from now, you’ll regret not starting today.
Five years from now, today’s “high” prices might look like bargains.
And ten years from now?
The only regret most investors have is not starting sooner.
Your next step isn’t to buy a property — it’s to take one small action that moves you from thinking to doing.
