Why Waiting for the “Perfect” Property is Costing You Wealth

Your first house doesn't need to be perfect. It just needs to be the right property for you right now. And this is true whether you're buying a house to live in yourself or a pure investment property. And it's an important mindset shift that you can make today if you're struggling to buy. And it'll empower you to take one step towards achieving your goal. And that's really all that you need to do. Just take one step at a time.

Hey, everyone. Hi. I'm Dave Meyer, head of real estate investing at BiggerPockets. I've been buying rental properties and pursuing financial freedom for 15 years. And on this show, we teach you how to achieve financial freedom through real estate. Our guest on the show today is Mitra Kalita. She's a journalist and the CEO of URL Media. Mitra bought her first home back in 2002 and has been thinking deeply about real estate ever since. She's covered the 2008 crash as a reporter at the Wall Street Journal and more recently launched a newsletter called esc. In my conversation with Mitra, we're going to talk about how making the right real estate investing decisions could be a secret key to unlocking success in pretty much any career you want to pursue, whether that's in real estate or something else. Whether Mitra sees any echoes of 2008 in today's real estate market, and the advice she gives people all the time about how the first house you buy, or even the third house or the fourth house is probably not going to be the last one. And so you don't need to plan everything out perfectly.

You.

You can't plan everything in life, so you just need to make the best decisions that you can today. This is all super powerful advice for people at any stage of their investing career, so I'm very excited to share it with you. Here's my conversation with Mitra Kalita. Mitra, welcome to the BiggerPockets podcast. Thanks so much for being here.

Thanks, Dave. It's great to be with you.

Yeah, I'm excited. This is going to be a lot of fun. Could you maybe just start by telling our audience a little bit about yourself and your career to date?

So my career is, you know, like, my family moved around a lot. My father worked for Citibank his entire career. This will not surprise anyone who's familiar with corporate America, but, like, the more he moved, the more he would get promoted. And so having an opportunistic Indian immigrant father, he agreed to move us around a lot. And so I was raised in Brooklyn, Long Island, Puerto Rico. And then we settled in New Jersey for my high school years. And because I moved around so much, I joined the school newspaper as a way of making friends. And I was really lucky that like even my elementary school and then my private school in Puerto Rico all had school newspapers. And then when we moved to New Jersey, I joined the Panther Press at the age of 12 and interviewed the principal and kind of that's how the journalism thing took hold. And then I spent most of my career as a business reporter. I was at the Associated Press, the Newsday, as a business reporter. I covered post 911 in the new York City economy. And then I was at the Washington Post. And then I moved to India and I sort of like repeated what my father had done to us. So we've moved around a lot as well.

It's a really pretty amazing story. So I'm sure you've, you've sort of seen it all from a real estate perspective. But I'm curious because, you know, I got into real estate right after the Great Recession in 2010, but you know, what was it like, sort of covering real estate during what is probably the defining moment of the real estate industry in the last maybe century?

I mean, it really was tragic, right? So despite my interest in like what made you want this home and kind of that framework, the humanity is what I remember in trying to bring that to the work, because people really lost everything. And you have to kind of remember that being over leveraged, predatory lending, like access to credit, the factors that marched us straight into the 2008 recession were propelled by a desire to make homeownership more accessible to more people. And I think we also lose sight of that. There was something about 2008 for me as a journalist that was really eye opening in terms of the fragility of the whole country. Also this era that I don't think we've abandoned since 2008 of an era of uncertainty, right? Because you have a lot of factors of the financial crisis, but also information technology and that boom. And today I feel like there's a direct line from that into again, uncertainty. Also a lot of opportunity as a result. But define a tech company for me today, define a bank for me today. It's a very different economy today.

You've said something that I've interviewed a lot of people on this show and I've never really thought about that in 2008. We talk about it so negatively, but sort of fail to see how that came about. We talk a Lot about the logistics, you know, the availability of credit, the lack of regulation. But a lot of times these negative economic outcomes come from good or modest intentions. Right? Like, no one was trying to do this at first. Or some banks probably got a little greedy and got ahead of themselves. But you did see sort of the pendulum swing back in the other direction after 2008, where homes got less affordable, you know, and so there is that sort of negative element of it. I think, like, living through that sort of has been one of the defining, like, elements of my life. Not in that I was invested at that point, but it sort of created this. Like, I. I've joked about it being, like, housing market trauma for a lot of recent generations. And I'm curious how you see that playing out, like, oh, in your personal life for the people you cover. Like, do you think people are still, like, hung up on what happened back then?

The majority of millennials I know who are buying homes and sort of fit the description of, you know, this fallout from 2008 are getting money from parents in order to make that down payment. And, like, that's something we don't talk about, right? There's an inheritance generation that has been created and in the massive wealth gap that we are seeing right now, which also is contributing to household formation, rates, and it's kind of the ability to, like, move, you know, and mob and all. I mean, it's so connected to our psychology around the economy and just some other examples of, like, how that plays out right now. Again, my generation is notorious for the we did it this way. Like, the belief in meritocracy or kind of like, it's going to be okay, like, you'll work your way out of this. That's what we were told. And I think for millennials, there's a disbelief, rightfully. I think some of that, again, roots back to that 2008 housing crisis, the financial crisis. And I also think, you know, they're looking at their wages and housing costs and looking at, for example, my wages and housing costs when I bought my first apartment. It's a very different financial picture right now. And so that's the. Probably the biggest difference between 2008 and now is just that the gap in wages, you know, and the increase in housing costs, you know, that I don't think I've been able to reconcile.

We have more with Mitra coming up, but first we have to take a quick break.

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Welcome back to the Biggerpockets Podcast. Let's jump back into my conversation with Mitra Kalita 2009, 2010, whatever. Five years after the crash, everyone was afraid of real estate. And I remember people always say, oh, it's amazing you got in in 2010. How lucky. People thought it was crazy. You know, like people, it was still. The market was still going down. But that fear sort of had people miss out on the opportunity to affordably buy real estate. And now you Fast forward another 10 years beyond that, and there's a lot of fear that you'll never be able to buy real estate. You know, like, people feel like they've missed out. I wonder how that plays out because it's so unaffordable at this point. I wonder if we're going to start to see declining homeownership rates or people sort of embracing more of a rental model. I'm curious if you've thought at all about that.

Oh, gosh, all the time. So, you know, I run a series of newsletters and two of them are at opposite ends of the economic spectrum. One is epicenter. It was formed out of the pandemic. And we really kind of target immigrant Queensland, you know, young exploring, New York City, artists, small businesses. But the housing piece for me is always with a lens towards you too, can be a part of this. And I think that's such an important message that gets lost. And some of it, Dave, I think, is who you're hanging out with. So if you're living in your parents basement and all your friends are living in their parents basements, like, you're not necessarily dealing with people where one person has experienced the possibility, as I did, of buying your first apartment at the age of 24 for $82,000.

Amazing.

In New York, in New York City.

That's amazing. Throw a couple zeros on that now.

Yeah, that changed my life, right. And like, I don't. I worry that we're not making this accessible. So what happens is you kind of, again, from a media perspective, we share, like the down payment programs, we share the housing lotteries, you know, the statistics on this. Good luck. It's like a handful of people, right? And then there's the people whose parents can help them, which nobody talks about in between. I think there has to be kind of to. To your point, about the societal and cultural access, right? Like this is about access. Like there has to be a. This is how I did it. And sometimes that involves a level of risk that I think for millennials who've kind of grown up also on the Internet, where information is just coming at you. So every decision I've seen, seen People make is very well thought out. It's researched. Your house that you finally buy is going to be the place where you picture your kids playing in the yard. And guess what? Like, that was not my first purchase. My first purchase was a one bedroom co op. They didn't even allow dogs. Like, look, I get it, it's not perfect, but it got me in there. And I think we need to undo some of the desire for perfection. I worry about that because your first place probably shouldn't be where you're going to end. Right. And like, I see so many people putting this pressure on themselves. It's not quite right. And I'm like, oh, gosh, is that, Is that what real estate is like? It's supposed to be, you know?

Yeah, totally. I think this is such an important conversation, so I want to just dig in here for a minute because it's something we talk about a lot on this show too. I think it's the same mentality where people, if they're trying to buy their first real estate deal, they want it to be a home run, they want it to be a grand slam. A lot of times people look back and think, oh my God, if I had just bought in 2020, it would have been amazing. It probably would have. But the reality of real estate is that it's sort of a slow thing and it's kind of like this long, protracted benefit that is not a get rich quick scheme. This is an old adage in our industry, but it's more about time in the market than timing the market. And it really doesn't need to be perfect. And of course that feels super intimidating because this is probably going to be the largest check you've ever written. No matter if you're putting 3.5% down or 20% down. That's scary. I admit, all the time on the show. I've been doing this for 15 years. I'm scared every time I buy a house. Absolutely. But like you said, like making that clear that it is scary, but it doesn't have to be perfect. I know for everyone who went through 2008, you think of it as this huge risk asset. Like it's the stock market or it's cryptocurrency. But in reality, real estate is actually quite forgiving. Like if you look at the history, the last hundred years of real estate prices, it's actually one of the least volatile assets that you can buy. And just finding something that works for you at that point in your life is probably more important than finding something that's perfect.

The other thing is, like, people also kind of are like, well, we're going to have children after we do this. I'm like, there's just so much sequencing of life that people are putting dependent on real estate versus, like, what do you need right now? And I'm like, you don't even know if you can have kids. Take it from someone who's like, you know, like, struggled a little bit with that. Like, it doesn't always work the way that you think it's going to work. What are we doing here?

Given your history and covering this for so long, is this advice that you're giving out frequently? Are people coming to you for this kind of thing?

So I have a group of, like, six really close friends in Queens. I've found homes, I think, for four of them. And, like, some of it is selfish because they help watch my children. They're really good cook. But also some of it was like, no, listen, I'm telling you, you really just need to get in there, like. Or I already talked to the Realtor. I negotiated this deal. Like, if you don't take this, like, I can't help you more than this, you're never going to get in there. Right. And so there is, I think, when I say, like, people need to talk about this more, like, I think we have faith in our friends. I think, thankfully, this group of people had faith in me. Even the ones where I didn't negotiate the deals, they would say, like, could you come over and take a look? And I'll never forget the Realtor looking at me looking at my friend's apartment in Forest Hills, and he was like, are you a structural engineer? And I was like, I'm just a.

Really nosy friend, you know, I completely agree. I just think people tend to overthink it a little bit. And I understand that not everyone can afford it, that that's a different thing. But I think for people who can afford it, it is just such a good financial decision. Is buying the dream house that's perfectly manicured and someone else just flipped and making money off you the best financial decision? Probably not. But finding something that you can add value to, that you're going to live in for a while, is just such a powerful thing, given your history and career. You're in a situation I think a lot of our audience will resonate with, which is you've built an amazing career outside of real estate investing and outside of real estate, but you're sort of in the real estate world. How do you find the time to, like, take on a renovation. Like, how do you get the. I don't know, the courage to sort of take these things on when you have other things going on?

I mean, what's interesting, like, saving money will do that to you. Like, saving money helps you find time. Right. And so my husband and I, like, you know, there's some tile shops in Flushing that we are really at one with the owners and managers of. And, you know this, Dave. Like, you look at the price there versus, like, getting an architect to do the thing, and you're just like, well, I could just do that. And plus, I'm going to end up with something that I know I love. And first of all, I think it has to be something you sincerely enjoy. I have met some people who find the idea of what I just described to be like an afternoon of misery going to tile shops and Flushing, Queens. Right. And if that's you, then, like, you should not do this. If you have the disposable income where somebody could manage this for you, great. But then I'm like, but then why.

Do, like, then you're not getting the financial benefit.

Yeah, but I think if you're like, the type where, like, for us, like, we obviously see possibility. We also love our neighborhood. We like pulling our children into this. They actually, it'll be really interesting to see if this. This goes to a third generation. So my parents were this way. We're like. We would hang wallpaper together, we would go shopping together. We would do all of this stuff together. I feel like we pull our children into it. They seem really miserable about it. For now, I don't know if it'll sink in, but I think looking at where you spend your time and also is that enjoyable, right? Which, like, again, people don't. People often look at real estate as, you know, it's obviously transactional. It is very transactional. It's intentionally a side hustle that hopefully you'll, like, maximize your returns. But if there isn't something about it that's appealing, like, really, you don't. You don't have to do this. And then I think, like, the third piece is honestly, for sometimes just breaking even. And learning is like a gift in and of itself. And so I think the idea that things can be undone, it's okay.

Learning is a type of return in this industry. If you're an investor, learning is especially early in your career, as valuable thing as you can get later in your career. You probably want to be making money and not. Not just learning all the time. But 100%. I mean, I've shared the story a lot on the show, but, like, my first deal, I partnered with three people. I had no equity, so I had a double loan on it. I wasn't really making money off of it. In the first couple of years, it turned out to be fine. But, like, just get into it and start to figure it out, and that's just more important. And I agree, like, if you make a mistake that happens to cut your losses and move on, like, you know, just trying to dwell on it, and there's just some things that are bad luck. Like, sometimes you make a good decision and it doesn't work out for you. And that's okay. Just learn what you can and move on to the next deal, the next opportunity. There's no point, like you said, you can't change it. It already happened. So figure out how to proceed going forward and to figure out something that is going to work the next time around.

I really like what you said about learning, too, because there's something about reading about real estate versus doing it that's so different. So when people are like, I don't know how you know these things, because partly I was, of course, covering it as a journalist, but then you see how they come together and you're like, oh, or even some tools that are out there. I'm just thinking of, like, FHA loans or bridge loans or products that exist. Again, when you read about these, you're like, when would I ever really need this? And then you're like, oh, I could see how that would be useful. And so I think there's also something which I've. Which I've tried to tell young people, is by getting in the game, you're also going to be much smarter because you'll understand how the next and the next and the next might work.

This is true of almost everything. But in real estate, it's such a tangible thing, you know, it's not learning something online or some skill where you're just reading. And reading is important. It is a good part of it, but you gotta do it. You gotta go talk to the tenant, you gotta go meet with a contractor. You got to go through a loan process. Because everything else about it is just. It can't just be this academic exercise where you just learn, learn, learn, and then all of a sudden you're an expert in doing it because you can learn for 10 years. And when you buy your first property, something's still going to go wrong, so you might as well just do it right Like, I think there is a sweet spot. You don't want to just jump into it blindly, but if you've learned for a couple months, you're probably ready. You know, you probably know enough to not make a really bad mistake and the rest of it just has to be hands on. I totally agree with you. We have to take a quick break, but stick with us. We have more with Mitra right after this quick break.

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Welcome back to the show. I'm here with Mitra. Let's jump back into our conversation. You said something earlier. You know, it's funny that so many people on this show and a lot of bigger pockets is about financial freedom. We, you know, a lot of people want to quit their jobs. They want to go full time into real estate. It sounds like you've benefited a lot from real estate, but at the same time you have this other career. Like, have you ever thought about going into real estate full time?

I would rather take the lessons I've learned and impart them to more people. I mean, I think it's like, it's a very New York thing for me to liken this. But like, you know, you go to a restaurant and you love it, right? You have two options. You can either not tell anyone and that's like your go to spot, or you write about it in one of your newsletters and then the New York Times writes about it six months later and you're like, oh, no. But like, for me, I think life and just money and kind of some of this real estate accidental investing has been the latter. That is because I come from a background where like, my parents didn't always have a lot but like, speaking of homes and how important they are, like, there was always enough room for other people, right? Like, someone would show up at the door and my mom would somehow like make it work. Whatever we were eating for dinner, there'd be enough. Or my cousin came to live with us. For a while. And of course he like, lived in the basement, which is kind of uncomfortable, but, like, there's something to coming, I think, from an immigrant background where this idea of sharing information is actually revolutionary. I think we're at that point about housing just because so much of the calls that we get, you know, epicenter, was formed in the pandemic. It was to help these communities I described. The calls we're getting now are not over access to health as much as they are. I cannot find affordable housing. It's all connected to me. Like, if I can help you find affordable housing now, that's a rental, but there's a pathway to eventually owning. I feel like that just from like the purposeful part of what we do versus the individualistic aspects of wealth creation, that to me just feels like a more meaningful way to live my life.

So this has been a lot of fun. Thank you. I'm curious, what's next for you? Real estate or career wise? Like, are you leaning more into real estate or. I know you're an entrepreneur, a business owner, Are you going to be focusing more there?

I mean, so the escape home is really going through a bit of a metamorphosis. We were born out of the 2020 boom in second home ownership. We are now contending with, you know, Airbnb being banned in many places, including New York City, where I'm at right now. You know, I think this past month saw like the lowest number of second home mortgages. Like, historically.

Yeah, there's, I think demand is. I did the story about this, like half of what it was pre pandemic and a third of what it was in 2021.

And then you have remote work, which is like no longer a thing. Right. And so you kind of have, like the best conditions allowed us to create this newsletter. And now we are contending with the subscribers of this newsletter and people like us that are like, well, what now? Right. And so I feel like what's next is answering that question of what now? I'm super interested in some other trends we're seeing of, like, home exchanges, for example. And it's like what goes around comes around, which is, you know, couch surfing and kind of the peer to peer thing that led to Airbnb's rise. Also, you know, the corporatization of Airbnb policy changes and so forth have, like, led to its, I don't want to say unraveling. That feels really strong, but definitely a shift in people's fondness for the brand. And then the other piece, you know, 2008, one of my lessons was, like, the whole country was hurting. Right now. Things feel a little bit uneven to me. So New York, I think, is going to weather this housing crisis. You know, I'm looking at other cities. Like, I just wonder about, like, let's say, a place like Austin or, you know, some of the other kind of sun belts. Again, like, this is all coming full circle, you know, and so we're looking at some of those markets to see what happens and whether we need to be more cognizant of. It's not one housing market right now, it's many, many housing markets. There's also many, many labor markets. And also, again, like, within the labor market, we're seeing such shifts in government. Layoffs have been one piece of it. But what AI is doing to both of our industries is also seismic. And so I just feel like, given my desire to make this an easier life for people to live right, which is like the fundamentals of the products that we run, how do you make AI feel less scary and more, you know, going hand in hand and being more educational in the type of journalism that we're committing? Like, how do you optimize this in your life and your career?

Yeah. When you figure that out, please let me know because I'm very eager to have the answer to that.

When you're small, it's actually easier. Like, it's. So if I. If I were still at cnn, I think implementing a lot of the AI in our workflows would have been much harder. But at places like Epicenter or the Escape Home, like, you know, we're using it pretty much every day because it's just such a small team that they're eager to experiment and kind of to take a lesson that we've been talking about here. It can be undone, right? This is not permanent. We can fix it tomorrow. And the system's learned from you.

Well, I'm fascinated to hear what comes next. We'll have to have you back sometime. Mitra, thank you so much for joining us. We really appreciate it.

Take care.

Thank you again to Mitra for joining us today. And thank you all so much for listening to this episode of the BiggerPockets podcast. We'll see you in a few days.

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