On The Market

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56: Are New Short-Term Rental Hosts in For a Rude Awakening in 2023? Nov 28, 2022

Show notes

Short-term rentals have had a serious run over the past two years. As soon as interest rates dropped, everyone decided that buying a vacation rental or second home was the best move to make. This led to a surge in short-term rental investments across the US, as hosts began to almost outnumber guests. Now, vacation rentals are seeing a dramatic slowdown while a recession starts to shape, as Americans are less concerned about taking vacations and more about keeping their jobs.

So where is the vacation rental market headed? Were short-term rentals just a short-lived fad that could fade out faster than it took to be born? Or, is this a mere blip on the radar of vacation rentals, as guests still prefer hosts over hotels? We brought on Avery Carl, Jenny Yi, and Tony J. Robinson, three experienced short-term rental investors, to walk us through exactly what is happening in the market, what moves they’re making, and advice for getting through a recession.

We also talk about short-term rental regulations, which, surprisingly, many of the expert investors are in favor of. They speak on the saturation of “blue chip” vacation markets, and how some sleepier towns offer much better prospects for profit than the vacation markets most Americans know and love. If you own a vacation rental, plan on buying one, or just like staying at them, this episode gives you in-the-field opinions that most hosts won’t admit.

In This Episode We Cover

Who’s hurting and who’s thriving as the short-term rental market starts to lag

How to identify new markets that have low competition and high tourism potential

Short-term rental regulations and why it isn’t all bad news for hosts

How a 2023 recession could affect vacation rentals and vacation spending

Advice for new hosts as bookings and revenue starts to decline during a downturn

Vacation home price drops and whether or not this type of real estate is more vulnerable than the rest

And So Much More!

Links from the Show

Join the Future of Real Estate Investing with Fundrise

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Real Estate Rookie Podcast

Tony’s Video on Short-Term Rental Recession Data

Book Mentioned in the Show

Short-Term Rental, Long-Term Wealth by Avery Carl

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55: Has Inflation Peaked? There’s Hope Behind the High CPI Nov 25, 2022

Show notes

Inflation may have just peaked. And with it, mortgage rates could come crashing down sooner than economists expect. But what would cause a scenario like this, especially as the Federal Reserve continues to bombard Americans with higher and higher interest rates? And, with supply chain shortages abound, how do we know that inflation won’t boomerang back in 2023, creating an even worse problem than before? Stick around. Dave has the answers.

For the past year, Americans have dealt with high inflation rates and the crushing weight of purchasing power declining. Food, energy, electronics, and most importantly, housing, have skyrocketed in price. To tame this economic beast, the Fed unleashed a series of almost unimaginable rate hikes, slowing down homebuying, borrowing, and business building in the process. This was part of the plan, and we’re just now seeing the effects of these high rates on inflation.

But what will happen once inflation numbers start to cool? Will the Fed suddenly lower interest rates and turn the housing market tap back on again? Will droves of homebuyers get back into the market, causing the same amount of competition that high rates were supposed to solve? Assemble your post-thanksgiving sandwich, plug in, and get ready for some up-to-date data drops from Dave Meyer.

In This Episode We Cover

November's latest inflation rate updates and some good news for the American economy

The three reasons why inflation could start to dramatically drop in 2023

How a global recession could foil the Fed’s plan and shoot rates back down

Whether or not mortgage rates will reverse once the Fed hits their target inflation rate

How the ten-year treasury yield almost identically maps mortgage rates

China’s lockdowns, Russia’s invasion of Ukraine, and other global events that shocked the supply chain

And So Much More!

Links from the Show

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

2023 Mortgage Rate Outlook—You Won’t Believe What Could Happen

The Fed’s Plan for Future Interest Rates

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54: The Deals We're Doing in 2022 (and How Much They'll Make) Nov 21, 2022

Show notes

BRRRR investing, house flips, five-figure rental properties, and silicon prairie dogs are all part of this On the Market episode. We asked our panel of expert guests to bring in some of the juiciest deals they’ve been doing so we can compare and contrast which real estate investing strategies are working best in today’s housing market. Surprisingly, even with this panel of investing all-stars, we’ve got deals and steals costing only $70K, but also home-run rentals in the seven and eight-figure price points.

But this isn’t just a bragathon—our expert guests walk through exactly how they picked up these insane deals for cheap, the strategies they’re using to cash flow from day one, and how they’ll use their tax benefits to pay for the next round of real estate deals! If you want to know how to make six-figures worth of equity for free, build a “bulletproof” BRRRR strategy, or ensure you turn a profit on your next real estate deal, this is the episode to listen to!

We also take a question from the On the Market Forums concerning rent raises and how to price your rental property. It can be tempting to set your rental price at an all-time high rate, as renter demand skyrockets. But, this could lead to unintended consequences that could not only hurt your property but bombard you with headaches from a future tenant. We’ll give tips and tricks on the best way to get around this!

In This Episode We Cover

Four killer real estate deals from our expert guests and how you can copy their strategies for the same results
Where to find cheap rental properties that will cash flow even in today’s market
Real estate exit strategies and three different ways to ensure a profit on your next deal
Large multifamily investments and why the tide may have already turned for sellers
Short-term rental investing and walking into six-figures worth of real estate equity immediately after purchase
How to price your rental property so you don’t suffer vacancy OR get the wrong tenant
And So Much More!

Links from the Show

Book Mentioned in the Show

Real Estate by Numbers by J Scot & Dave Meyer

Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-54

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53: 5 Ways to Win During a Down Housing Market Nov 18, 2022

Show notes

Knowing how to invest during a recession is what separates the good from the great investors. Most veteran real estate investors know that during downtimes, the lucky landlords get swept away while the intelligent investors start to pad their pockets with deals others are too scared to take. This is both an opportunity and learning experience for all the listeners who are waiting to get their first, or next, real estate deal. Now may be one of the best times to strike!

But we don’t have Dave leading the charge this week. Jamil Damji, an investor who made millions during the last housing crash, is here to share five of the best ways to build wealth during an economic downfall. Jamil uses this show to test all of his theories with our expert guests as he double-checks if his tips are truly being used by the masters of multifamily, house flipping, buy-and-hold, and more.

Whether you have zero rentals, ten, or three hundred, this episode will give you everything you need to start hitting future home runs with the deals you do today. None of these strategies are too complicated for any investor, and all of them work in today's market. These are the buying opportunities we’ve been waiting for!

In This Episode We Cover

Why “buying deep” and padding your pro forma can create huge profit potential in deals bought today

Getting creative with your financing and funding of real estate deals to buy more for less

How to hold on to properties even with high interest rates and declining home values

Who to negotiate with to get foreclosures and short sales for pennies on the dollar

Partnering with other investors to raise money for deals too good to pass up

Building your buyers list and why now may be one of the best times yet to wholesale real estate

And So Much More!

Links from the Show

Join the Future of Real Estate Investing with Fundrise

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On The Market Podcast 31 with John Burns

On The Market Podcast 17 with Rick Sharga

3 Reasons to Invest in Real Estate During a Recession

Henry's BiggerPockets Profile

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52: The Wrath of 1031 Investors and a “Chaotic” Multifamily Market w/Ashley Wilson Nov 14, 2022

Show notes

Cap rates affect multifamily investing more than most investors come to realize. If you’re in the commercial real estate space, you know that as cap rates decrease, price points for apartment complexes increase. And, as cap rates start to expand, multifamily prices begin to dwindle. With rising interest rates and high labor/material costs, the multifamily market should see a decline in property valuations. But that isn’t what’s happening.

Behind the scenes, a group of investors is unknowingly keeping this multifamily boat afloat, artificially inflating cap rates and keeping prices at record highs. The problem? This makes average asset prices skyrocket to almost unaffordable levels, ruining the playing field for any investors who can’t outright buy a multi-million dollar property in cash. Ashley Wilson, experienced multifamily investor, calls this the “cap rate con” and blames much of today’s high multifamily pricing on it.

Ashley is a veteran real estate investor with a decade and a half of experience. She’s been investing in large multifamily housing since 2018 and is shocked at what’s happening today. This “multifamily madness” is affecting investors across the board, and she’s convinced that it must come to an end. But what’s causing these inflated prices? How are multifamily investors reacting? And is there still space for the new investor to make money? You’ll have to tune in to find out!

In This Episode We Cover

How a pandemic-fueled buying spree massively inflated multifamily housing cost

1031 exchange investing and how “all cash” buyers are damaging the system

The “cap rate con” leading to surging property price hikes without reasoning

How to evaluate a multifamily investment property in three different ways

Advice for passive real estate investors and those investing in syndications

Whether or not a wave of multifamily defaults is on the horizon

And So Much More!

Links from the Show

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Ashley's BiggerPockets Profile

Book Mentioned in the Show

The Only Woman in the Room by Ashley Wilson

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Bar Down Investments

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51: Huge Concessions, Cheap Labor, and Where Sellers are Hurting Most w/Niyi Adewole and Ryan Blackstone Nov 11, 2022

Show notes

The housing market has shown homebuyers both fierce love and abuse throughout 2022. At the start of the year, offering anything other than twenty thousand above asking was seen as an insult to a seller. Now, the seller is offering you a foot massage on your way into their open house. But we’ve known about this for months. Rising rates paired with home prices that are still (arguably) too high have made homebuyers think twice about buying in the first place. But is this true in every real estate market?

We brought on two agents, both in very different markets, to get their take on whether or not the housing market has finally flipped. Niyi Adewole, Atlanta-based investor and real estate agent, spent the last couple of years helping himself and his clients build bigger portfolios. Ryan Blackstone, northwest Arkansas-based investor and realtor of our very own Henry Washington, has seen buyers start to bounce from his market, but not close to as fast as most would expect.

Both these expert agents share exactly what’s happening in their real estate market and how buyers, sellers, and investors should prepare if they want to make moves in the next year or two. While Niyi and Ryan have different clientele, they’re coming to the same conclusions about where the housing market is headed, with extremely useful advice no matter where you stand right now.

In This Episode We Cover

In-the-field advice from top agents in two hot housing markets

How buyers have taken control, and the concessions sellers are willing to make

Price drops, cheap labor, seller credits, and more good news for buyers

Whether or not buyers are dropping off as unaffordability spikes

Days on market, active inventory, and other important metrics to pay attention to

Buying in down markets and why now may be the best opportunity to strike

And So Much More!

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50: Self Storage: The Misunderstood Money Maker Most Investors Overlook w/AJ Osborne Nov 07, 2022

Show notes

Self storage investments aren't sexy. Most investors wrote them off for decades, with many of them not even considering self storage as true real estate. As more facilities were being built in the 1970s and 1980s, average investors looked down on self storage operators, seeing them as nothing more than owners of some concrete and metal. And who could blame them? Apartments, hotels, and other popular real estate ventures had proven track records, industry-specific technology, and a true “need” in the market. It wasn’t until after 2008 that this perception completely changed.

AJ Osborne, one of the largest self storage operators in the world, built his business at a time when no one wanted to touch self storage. But, as his portfolio grew and the industry turned around, more and more investors saw self storage for what it was: a low-risk, high-cash flow real estate investment. But now, with self storage hitting its all-time high in popularity, could the market slowly be getting saturated?

AJ has theories about who will and won’t get burnt over the next few years. His strong opinion on this industry is backed by a massive amount of expertise that few can rival. AJ, unlike many of his competitors, does NOT think that self storage is “recession-proof,” but he does still think that investing in this asset correctly, especially now, could be a game changer for any investor interested in a life of financial freedom.

In This Episode We Cover

AJ’s journey from insurance salesman to full-body paralysis and later self storage king

Why self storage is a misunderstood asset that most investors dismiss too easily

The explosion in self storage since 2008 and why Americans are storing more than ever before

Commercial financing and what banks want to see when buying a self storage facility

Whether or not institutional investors could own the entirety of the self storage industry in the near future

Location, lighting, design, and other aspects that make a facility high demand

AJ’s advice for brand-new investors trying to get started in self storage investing

And So Much More!

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BiggerPockets Podcast 286

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49: Rents Start to Reverse: Could Cash Flow Get Cut Off? Nov 04, 2022

Show notes

Landlords got used to rent prices growing every month. As home prices rose and affordability shrank, more landlords took steps to secure their cash flow by increasing rents by sometimes ten, fifteen, or even twenty percent. And, with inflation stronger than ever, most renters would be willing to pay for it. But, a reversal is happening in the housing market—one that many landlords aren’t prepared for.

Our data-first duo of Dave and Kathy are back on the show today to have a one-on-one debate over what’s causing rent prices to drop. Kathy, who has invested in numerous market cycles, knows a thing or two about what causes rents to dry up, and when we can expect growth to come back. Surprisingly, even large investors like Kathy welcome this change in rent direction. Her team has been expecting this for quite some time now!

Dave also brings in some high-value data this week to show which housing markets are seeing the most dramatic drops in rent and which are seeing double-digit growth even as the economy starts to stall. Finally, Dave and Kathy touch on multifamily’s vacancy dilemma and why there are contradictory opinions on where apartment investments could head next. If you collect rent, pay rent, or want to make cash flow, this data is crucial to you!

In This Episode We Cover

What caused rent growth to increase so much over the past two years

How the federal reserve manipulated the housing market to cause high home prices coupled with higher rents

Why rents are starting to slow down and a hint at why many landlords aren’t so worried

The real estate markets that are seeing the worst and best rent growth in America

Our continuous supply and demand problem and why millennials have been forced to pay high prices

Multifamily rental data that could spell out a dream or disaster scenario for apartment investors

And So Much More!

Links from the Show

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Kathy's BiggerPockets Profile

Kathy's Instagram

Hear Our Interview with Multifamily Expert, Caitlin Sugrue Walter

Grab This Week’s Data Drop

Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-49

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48: Why Volatile Housing Markets Are Looking Attractive to Investors Oct 31, 2022

Show notes

Today’shousing market has a lot of people scared, and investors are worried as well. Home prices are starting to slump, inflation is hitting decade-long peaks,and interest rates have turned everyone’s cash flow cushions into break-even deals at best. Is there any respite in the wild real estate market? And why do top investors seem so excited about it?

We’re back on another correspondents episode of On the Market, where Professor Dave has asked students Henry, James, and Kathy to bring in their favorite real estate market news for show-and-tell. These stories hit different aspects of the housing market, showcasing the cracks forming in the overall economy and what investors need to be prepared for to react. We talk about how home flips are being discounted across expensive coastal cities, why rent price growth is starting to stall, and how buyers got their negotiation power back.

We’ll also be touching on the recent inflation data, showing that we have a long way to go until we return to the good ol’ days of two-percent price growth. Then, we take a request from the On the Market Forums where we answer an age-old question: When should you sell a BRRRR property? All this, and more, coming up on this week’s data-first housing market deep dive!

In This Episode We Cover

Another nasty inflation report and what this could mean for the housing market

Why flips are becoming riskier in today’s volatile market and how to prep for a profitable flip

Rent growth data and which markets as seeing the strongest (and weakest) rent growth numbers in the nation

Why buyers are asking for more repairs, bigger seller concessions, and lower prices

When to sell a BRRRR property and using cash-on-cash return vs. ROE (return on equity)

Fool-proof deal analysis and why investors need to be careful buying in 2022 and 2023

And So Much More!

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Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

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Henry's Instagram