Stop Buying Properties Until You Answer These Questions

In real estate investing, your strategy matters more than your first deal.

That's what Dave Meyer emphasized when he joined us to talk about building a real estate portfolio that aligns with your life goals.

Most new investors rush to buy their first property. But Meyer suggests stepping back to consider your personal values, risk tolerance and long-term vision first. This shapes not just what you buy, but how you structure deals and operate your portfolio.

Throughout our conversation, Meyer unpacks key frameworks for thinking about real estate investments. He explains the risk-reward spectrum, where house flipping and development offer potential returns above 50 percent but carry significant risks — while government bonds provide stable but modest 4 percent yields.
Meyer breaks down real estate income into four categories, using examples from his own experience:
1: Active transactional: Doing the demolition and renovation work yourself on a house flip — you're directly trading your labor for potential profit
2: Passive transactional: Being a silent equity partner in a flip, where you provide capital but don't do any physical work (Meyer notes this is the rarest type)
3: Active residual: Self-managing your own rental property or short-term rental, where you handle tenant calls and maintenance issues
4: Passive residual: Investing in a real estate syndication that buys apartment buildings, where you contribute capital but have no operational responsibilities
Meyer points out that many new investors get confused about rental properties, assuming they'll automatically provide passive income. In reality, your level of involvement determines whether it's active or passive — managing the property yourself means active residual income, while hiring a property manager shifts it toward passive.
Real estate investing requires three key resources: time, money and skills. While real estate needs capital, Meyer notes you can start with less money if you contribute time or expertise. A contractor might become an equity partner on a flip by offering their renovation skills, for instance.

For the common dilemma of investing locally versus out-of-state, Meyer advises staying local if returns are comparable, especially for beginners. But market selection should match your strategy — West Coast markets may not provide strong cash flow but could work well for appreciation. Meanwhile, Midwest markets currently offer better cash flow with slower appreciation potential.

Looking at 2025, Meyer sees opportunities in markets like Tampa, Savannah, Columbus, Indianapolis and several Wisconsin cities. While West Coast cash flow remains challenging, he points to Northeast markets like New Haven and Manchester as options worth exploring.

Meyer hosts the "On The Market" podcast where he discusses real estate investing and market data, and can be found on Instagram as @thedatadeli.

Timestamps:

0:00 Strategy Before Your First Deal

1:23 Personal Values & Risk Tolerance

5:43 Types of Real Estate Risk

13:11 [AD BREAK] - This episode is sponsored by Facet.

14:29 Transactional vs Residual Income

18:12 The Four Income Quadrants

20:42 Learning Deal Structures

22:52 The Resource Triangle

28:15 Different Forms of Returns

29:57 Cash Flow vs Appreciation

31:39 Local vs Out-of-State

32:46 Market Types Explained

35:14 Portfolio Strategy

35:34 Top Markets for 2024

36:46 Connect With Dave

#realestate #rentalproperty #sponsored #retirementwisdom #moneymanagement

_______________

Follow us!