The Return of “Easy” Real Estate Deals? 2026 Could Get Even Better

Dave:
The tip of 2025 is right here, which suggests it’s time to look again and replicate somewhat bit on what labored this yr and what techniques that we get pleasure from that we’re going to hold into our methods for 2026, and immediately we’re going to do one thing somewhat totally different. We’re sharing our favourite issues of 2025. It is perhaps a pattern that you simply’re obsessive about, a headline that modified the way you make investments, a portfolio pivot that actually paid off or only a massive lesson that we expect each listener ought to carry with them into subsequent yr. To do that, after all, I’m joined by Henry Washington, James Dainard and Kathy Fettke for our concepts, methods, and moments from 2025 that we’re going to deliver with us into subsequent yr. You’re listening to On the Market. Let’s bounce in. James, Henry, Kathy, welcome to the present. Thanks all a lot for being right here. Yearly, my spouse’s household does this massive Christmas Eve occasion and so they do that factor known as favourite issues, and quite than simply doing a white elephant or like a secret Santa, you deliver three of the identical factor. It’s one thing that you simply actually like after which everybody trades them and yearly for the dudes, it’s simply both you get a 3 pack of golf balls or a six pack of beer. Everybody. Males are simply, all we have now is 2 issues that we like.

Kathy:
It’s so easy.

Dave:
Sure, however it’s a enjoyable sport, so we thought that we might do one thing like that. We gained’t clearly do any buying and selling, however I’m interested in your favourite issues of 2025 in order that we will share them with the viewers and hopefully they’ll be taught one thing about what they may deliver into subsequent yr. Does that sound good?

Henry:
Yeah.

Dave:
Yeah. Alright. Properly, Henry, I’m going to choose on you. What’s your favourite factor about 2025 that you simply’re bringing with you?

Henry:
Properly, look, Dave, as somebody who enjoys discovering actual property offers and somebody who wrote a e book on serving to different individuals discover ways to discover actual property offers, my favourite factor of 2025 by far has been the return of with the ability to discover a whole lot with out having to be this skilled investor. There have been nice offers available on the market.

Dave:
Sure,

Henry:
There have been nice offers for those who’re simply keen to do some bit of labor and attain out to some sellers. I’ve purchased extra offers from wholesalers this yr. Sometimes that’s been a more durable factor to do. It’s simply the provision of a top quality deal appears to be again and it was gone for a number of years. You needed to work actually onerous

Dave:
After 4 years of this present. The identify of our podcast lastly is smart available on the market. Now you can really purchase offers available on the market in 2025 going into 2026.

Henry:
Completely. Do it’s important to nonetheless negotiate? Sure. Do it’s important to put in some degree of labor? Sure. If you wish to discover a deal available on the market, you continue to need to be keen to make a proposal at considerably lower than what any person might have it listed for, however what we’re discovering is there are extra individuals keen to say sure to these than there was earlier than. It was once this needle within the haystack drill and now it’s not as difficult. Like final week I most likely made 10 to 12 on market provides and these have been simply verbals. We weren’t even submitting the precise written provide. We simply had my agent verbally and we are saying verbal, however they mainly despatched a textual content message to the itemizing agent saying, Hey, my investor shopper is on this property. We’re keen to make a proposal of x. I do know it’s not what you’re in search of, however we will guarantee you that we’ll shut quick, it’ll be all money. We gained’t ask for any repairs, and simply sending 10 to 12 of these textual content messages. I bought two responses the place I used to be capable of go take a look at the properties after which regulate my provide and a kind of have been about to place beneath contract. That’s an incredible quantity to make 10 verbal provides and to have two responses and get one beneath contract, that’s simple.

Dave:
Be a part of me on the lazy facet of investing, Henry,

Henry:
So

Dave:
The water is heat. It’s so good over right here

Henry:
And the deal we’re going to place beneath contract, no work. It’s fully renovated. It’ll simply be a turnkey rental. I’ll get it. With 60 grand of fairness,

Dave:
I imply that is the very best favourite factor. Now I change my head. It’s so true. That is the very best one. That is the very best factor that’s happening out there proper now’s that you will discover good offers. It simply feels a lot simpler than it has. It’s humorous, I do the state of actual property investing factor yearly on BiggerPockets and I’ve been writing it over the past couple of weeks and I used to be like, I feel investing is simply getting simpler. I feel that’s what’s taking place proper now. It’s not simple, however it’s trending in that path and that feels good after years of it simply feeling more durable and more durable and more durable. I simply assume on market’s at all times been obtainable, they’re simply much less furry proper now. It’s just a bit bit easier on market distressed properties individuals, not everybody sells these to an investor or goes by way of a wholesaler. These nonetheless hit the MLS, however there are first rate situation properties, properties that you might purchase with a traditional mortgage on the MLS that really is smart as of late. That’s totally different. That’s an excellent favourite factor

Henry:
And it’s actually pleasure about what comes after the deal. Sure, it’s superb that now it’s air quotes, simpler to have the ability to discover offers, however what that actually means is we’re beginning to see the return of yr one cashflow. Once more, that’s sort of gone away over the previous two to 3 years the place you have been having to attend till yr two, three yr 5 earlier than you’re actually seeing the cashflow numbers and also you have been actually simply breaking even for those who needed to a purchase and maintain investor over the past couple of years, however due to this chance of with the ability to discover offers simpler, for those who’re keen to do just a bit bit of labor yr one cashflow is returning in a number of markets now, perhaps not in California the place Kathy is. That’s nonetheless a problem, however in much more markets, you’re capable of now purchase properties with out having to do a ton of labor and get cashflow in yr one. We’re again, child, we’re coming

Dave:
Again. It’s gradual, however it’s good. Yeah. All proper. Properly, Henry, I feel you stole the present already going first with this one, however let’s transfer on to another person’s favourite factor. James, what’s your favourite factor?

James:
A few issues I do like about this upcoming yr that was an important expertise for me this yr was one, as a result of there’s extra offers, such as you’re saying on market. You should purchase somewhat bit simpler flips proper now. You don’t need to go as deep to make the return, however my favourite factor for the yr, I really feel like that is what everybody’s speaking about, is the bills have been growing all the best way throughout the board, and I really like being a personal cash lender proper now as a result of it doesn’t matter what, even for those who’re not taking, you are able to do it in so many various methods and so they’ve been nice as a result of they’ve freed up time for me the place I’ve finished some passive fairness offers, but in addition simply the regular rate of interest, the consistency of it. It’s the one factor that hit one hundred percent of what I assumed it was going to do for the yr.

Dave:
I imply, I like it too as an idea. Are you apprehensive although, with flip sitting available on the market? Are you apprehensive in any respect in regards to the operators with the ability to execute offers proper now?

James:
No. You must vet your individuals, proper? I do seconds. I do one hundred percent first, however it must be for the best operator in any sort of deal. For those who’re investing with the best operator, you may really cost them somewhat bit much less for that sort of leverage, however they’re bankable and so they have belongings and they’re going to pay the invoice, and to this present day, I’ve by no means misplaced cash on a tough cash mortgage and we’ve been lending since 2009. You must do it appropriately. I noticed individuals get smoked in 2008 doing the unhealthy sort of loans, second thirds, gre, gre, greed, chase the speed, however it’s regular. You don’t have to fret about rising taxes, rising insurance coverage, consuming up your cashflow. You don’t have to fret about sitting available on the market too lengthy, paying an excessive amount of in an curiosity expense. You’re the curiosity, and on the finish of the day, being the financial institution final yr was essentially the most worthwhile factor.

Dave:
Wow. Some individuals like James operates his personal onerous cash lending fund. I do onerous cash investing simply in different individuals’s funds and even that’s nice, you don’t earn as a lot, however I’m in a few funds and so they simply pay each month. That’s actual mailbox cash if you’d like it. The minimums are usually costly, however I do know a number of good operators who’ve debt funds proper now and so they do rather well. It’s a good way to make cashflow and it’s manner for me personally, I take into consideration making an attempt to stability my long-term investing strategy, which is what I do with most issues. Purchase properties I need to personal for five, 10, 20 years, however I’ll take some money proper now and the onerous cash renting works fairly effectively for that, so I feel it’s nice as effectively, and I’m glad you could have such an optimistic outlook for it going ahead as effectively, James.

James:
Properly, the cool factor about it’s you may stability, it’s onerous to make cashflow on a single household proper now, however you may park some cash there, and even for those who’re shedding somewhat bit on that, you may offset it by placing it in a tough cash fund, kicking out the cashflow to cowl, so you are able to do a mix to get a very good rental property, however it’s important to vet your funds, vet your operators, who’re you placing within the fund? What belongings have they got? What are they lending on? What’s their common period? Don’t simply take somebody’s phrase for it. Dig into their portfolio and what they’re lending on and who they’re lending to.

Dave:
That’s an important level, and thanks, James. I feel that is one thing we don’t discuss rather a lot, however I feel lending and being on the lending facet has been an important factor and doubtless will proceed to be for the foreseeable future. An incredible favourite factor. Alright, let’s take a fast break, however once we come again, we have now mine and Kathy’s favourite issues. Persist with us. Welcome again to On the Market. I’m Dave Meyer right here with Kathy Fettke, Henry Washington, James Dainard, speaking about our favourite issues in 2025 issues we’re going to hold over into 2026. Kathy, what was your favourite factor of 2025?

Kathy:
Oh my gosh, I’ve like three, however okay,

Dave:
Me too. There’s so many good issues that occurred this yr, however so many begin with

Kathy:
One. I’ll throw the primary one out that I’m not going to go elaborate on, however AI has been extraordinarily useful in underwriting in so many issues, however I’m simply going to say, I’m simply going to place that on the market. We’ll do a complete nother present on that, however that was one in all my favourite issues and I actually look ahead to studying it extra in 2026, however I’d say for 2025 particularly bringing again that one hundred percent bonus depreciation, child, that’s a giant one.

Dave:
Not shocked to listen to that. That being your favourite factor, that may be a massive one for actual property traders. Perhaps clarify to anybody who’s not acquainted with what modified this yr and the way helpful that would

Kathy:
Be. Bonus depreciation is the primary yr depreciation that you could take, and it was form of winding down beneath the Tax Cuts and Jobs Act is once we first bought it and it was one hundred percent after which it went all the way down to 80 after which the following yr it went to 60 after which this yr it might’ve been 40% bonus depreciation that you might soak up your first yr of proudly owning a property. Once more, I’m not a CPA, don’t maintain me to this. Discuss to your CPA, be sure you get the best info. Don’t belief me. I’ve to at all times say that once you discuss taxes, however it was actually dwindling and so that you couldn’t take huge write-offs in a single yr. You used to have the ability to, till the O-B-B-B-A, that one massive stunning Invoice act introduced it again as much as 100% and it’s everlasting.
Nonetheless, I’ve personally talked to a number of CPAs, interviewed them, tried to essentially get the nuts and bolts of this, and so they disagree, and I’ve hounded them on this one factor, and I simply need to say that is one thing that’s actually vital to search for is that the best way I perceive it’s that the one hundred percent bonus depreciation is barely good on properties which are bought after January nineteenth, 2025. So lots of people assume, oh, I’m simply going to get this one hundred percent bonus depreciation on an older property, and I’ve had CPAs go, yeah, yeah, that’s what it’s, however the best way I perceive it’s it must be a property purchased this yr after January nineteenth, so look that up as a result of it appears like you may nonetheless get the bonus depreciation on older properties, however it’s on the 40% degree that it was. So the one hundred percent is on newer properties. Once more, don’t take my phrase for it, however exit and purchase an excellent property that you could bonus depreciate.

Dave:
And from what I perceive too in regards to the one massive stunning invoice act is it isn’t set to run out, proper? It’s indefinite,

Kathy:
Proper? It’s everlasting.

Dave:
So even when anytime you purchase a property now you may think about doing this. So bonus depreciation is an incredible factor for actual property traders, however all of you might be thought-about actual property professionals, proper? Tax standing.

Kathy:
Yeah, completely.

Dave:
Yeah. As somebody who’s not that, it doesn’t actually assist me sadly, which stinks, which I simply need to name out for individuals as a result of it could actually assist somewhat bit, however depreciation often, at the very least for me as an actual property investor, if I purchase a rental property, the conventional depreciation with out bonus depreciation often offsets my rental revenue, and I don’t wind up paying tax on the revenue from a rental property, however I nonetheless need to pay all of my revenue tax for my job at BiggerPockets. I can’t take the depreciation from my passive investments and apply it to my lively revenue. That’s solely reserved for individuals who have this actual property skilled standing. And so bonus depreciation is superb. For those who’re an agent, you’re knowledgeable investor, for those who’re a property supervisor, in case you have that standing, you may offset nearly all, generally greater than your lively revenue. However if you’re not doing that, and you need to search for what it means to be an actual property skilled standing, I simply need to name out to individuals that you simply won’t get the total advantages of bonus depreciation as a result of I painfully am conscious that you simply don’t get them until you’re an actual property skilled.

Kathy:
Until you could have a short-term rental.

Dave:
Quick-term rental loophole.

Kathy:
That’s the one manner

Dave:
Round that.

Kathy:
Sure. That’s why there’s all this discuss in regards to the short-term rental loophole as a result of yeah, James Henry and I can get this bonus depreciation on something as a result of we’re actual property professionals, however in case you have a full-time job and also you do this greater than you do actual property, then you definitely’re not, and until you could have a short-term rental, it’s a loophole for now, and that’s why individuals sort of go about these

Henry:
Until you could have a short-term rental that you simply handle,

Kathy:
That you just handle, handle that it’s important to

Henry:
Handle.

James:
Sure. However isn’t it additionally too, if somebody’s important different is a licensed actual property dealer that then you may run it by way of that manner?

Kathy:
Sure. In case your spouses,

Dave:
Sure.

Kathy:
It’s not simply in the event that they’re a dealer, they need to additionally handle your portfolio. There’s extra to it than simply being a licensed actual property agent.

Dave:
You must be actively concerned. There’s one thing known as lively participation in every deal that you simply bonus depreciate.

James:
Oh, it’s not simply sitting in open homes. Yeah,

Dave:
No, it’s important to really, I’ve appeared into it. Imagine me, you may’t do it that manner. However that is nice for anybody who does have it. I do assume it breeds somewhat little bit of life into the market too as a result of it simply provides a little bit of incentive for individuals to transact on actual property, which we want proper now as a result of there’s simply not a number of transaction quantity. So I feel that is undoubtedly an excellent favourite factor. Did you could have one other one, by the best way? Ai? You mentioned this one.

Kathy:
Yeah, I do. And we might discuss it on a future present, however vendor financing I feel is a very unimaginable alternative as a result of there’s lots of people on the market who can’t qualify, and for those who can assist them qualify by being the financial institution, being the financial institution and doing vendor financing, then there’s an enormous alternative there. I feel

Dave:
One other good one. Yeah, we should discuss that on one other present. We do need to take a fast break, however I’ll inform you my favourite factor once we come again, stick to us. Welcome again to On the Market. I’m Dave Meyer right here with James Dainard, Henry Washington, Kathy Fettke, speaking about our favourite issues of 2025. Henry began with on-market deal availability. Then we talked about James’s love of being the financial institution proper now and onerous cash lending. Kathy shared with us her love of bonus depreciation. I’m going to deliver, I struggled with this. There’s a number of issues I like. I bought to be sincere, James, I considered saying flipping as a result of James has introduced me over to the darkish facet. We’ve finished two offers, however they haven’t closed but. They’re pending, and I’m not going to name them my favourite factor till they really shut, however it was shut.
However my favourite technique is definitely one thing I’ve been doing for a very long time, however I named it this yr and it appears to have sparked some curiosity from individuals. I really like the gradual. That is simply one thing the place I feel it’s fundamental boring actual property investing, however it has been working for me and I’m going to maintain doing it in 2026, I feel through the pandemic and the years main as much as it, individuals bought the concept that the burr, it needed to be excellent. You had to have the ability to take one hundred percent of your cash out of your deal that you simply needed to do it in six months and extract all this worth out of it instantly. I actually by no means purchased that. I don’t assume that manner. I feel the best way that I’ve been shopping for offers for the final two or three years makes a number of sense.
I’m shopping for small multifamily properties with tenants in them usually, and I simply wait. I left the tenants keep there so long as they need, and these offers usually cashflow proper off the bat, however not loopy, like two 3% cashflow. So I’m at the very least getting cash, holding prices are lined. Then when the tenants transfer out, I renovate it, I deliver the rents up, after which the following time tenant strikes out, I renovate it. I deliver the rents up, and as soon as I’ve finished that, I’ll refinance, take some cash out and nonetheless have an important money flowing property, often within the eight to 10, perhaps even larger % money on money return. I’m not pulling one hundred percent of my fairness out on these offers, however I’m at the very least pulling out all of my renovation prices. After which you could have an important property that’s now in nice situation.
You possibly can go on and do it once more. And I simply like it as a result of it takes on a regular basis stress off of it. I really feel like so many individuals have these expectations {that a} burr is sort of a flip, however once I’m shopping for these properties, I don’t have a 12% onerous cash mortgage. I’ve a traditional mortgage on these properties. I’m making cashflow on it. There’s no rush. I’m getting cash each month holding onto this. So it actually, as somebody who works full time, I feel is a very good technique as a result of it means that you can get the advantages of worth at it offers you cashflow, however it’s not this tremendous time consuming disturbing factor. So the gradual burr is what I really like and it’s one thing that I’m planning on doing extra of heading into 2026,

Kathy:
I really like me a gradual burr,

Dave:
Which

Kathy:
Is mainly actual property investing.

Henry:
I used to be going to say it’s known as actual property.

Kathy:
Purchase a property, it goes up in worth, you refi it, you get your cash out. I imply, yeah, that that’s conventional.

Dave:
I do know. I assume I felt the necessity to identify it as a result of everybody says the bur is useless. You’ve heard this, proper?

James:
It’s such bs. Bur

Dave:
Is useless, proper? It’s such bs. I assume I’ve mentioned this in a number of context not too long ago, however I simply don’t assume the market sucks. I feel individuals’s expectations suck. What’s holding again actual property proper now’s individuals are anticipating these loopy returns. It’s magic. The truth that you might ever do an ideal bur is somewhat little bit of magic. You possibly can, and that’s nice for those who have been capable of pull that off, good for you. However don’t rely on that taking place. Lightning can’t strike each single time. This can be a nice approach to earn cash. It’s a boring approach to earn cash, however it’s predictable. It is vitally secure in an unsure atmosphere and there’s very low threat to this. And so I simply assume that is the tried and true manner of being an actual property investor.

James:
Have you ever ever observed that the people who say the burrs are useless are often making an attempt to promote one thing after which they’re making an attempt to promote one thing else after which they’re making an attempt to promote one thing else? It’s simply because it’s not the trending subject anymore.

Kathy:
Sure,

James:
However there’s a lot alternative. I’m with you, Dave. Really, I’d go gradual. I feel it really works rather well. There is no such thing as a excuse to do a burr generally. I don’t need to do this heavy of a rental, and that’s the one manner I can get that deal finished. However what you’re saying is the technique works, proper? You simply bought to park your cash, look ahead to ’em to maneuver out, and your repairs will not be that heavy. They’re extra beauty.

Dave:
Yeah, precisely.

James:
Which is nice. You may management these prices after which simply these minor little cosmetics enhance it sufficient to get your money again out or a piece of it. However it’s a good way. I’m making an attempt to purchase 10 of ’em this yr. That’s my purpose is to purchase 10 burrs and I’m going to go somewhat bit heavier. I need a 10 31 ’em later into somewhat bit larger property in California. That’s the one manner I can afford this rental property in California is that if I purchase 10 burrs some place else after which create the fairness and commerce it out. And so it’s simply cash within the financial institution burr is by far essentially the most impactful technique you are able to do.

Dave:
I completely agree. And I’ll say a few of them are beauty, a few of them are somewhat bit extra, I’ll change a format, you’ll do some structural stuff if it is smart, as a result of among the offers I’m seeing, and I feel, once more, this goes again to what Henry mentioned about extra offers available on the market. A few of these offers proper now, the rents are like 50% of market charge. It’s loopy how low a few of these rents are. Nobody’s renovated them, and perhaps it’s worthwhile to change the lavatory, change the format to be somewhat bit extra trendy, however you might double your lease a few of these instances for those who’re keen to do that, and it’s not. You’re going to have three months, 4 months of emptiness in these items. However the different a part of this that I really like, James taught me this, however it’s like you might allow these items whereas individuals are residing there.
So that you’re not shedding all this time or having all these holding prices, simply get it permitted. You’re able to go. They’re shifting out often 60 days forward of time. You possibly can actually cut back your holding prices and your bills by doing it this manner. So relying in your talent degree and your urge for food for threat, you are able to do a heavier reno too and nonetheless use this technique to manage your prices. Alright, effectively these are our favourite issues. I’ve so as to add my one bonus one, I learn a stat the opposite day that mentioned that affordability within the housing market is the very best it’s been in three years, and that simply warms my coronary heart. I simply need to inform you, I feel it’s terrible how unaffordable housing is in america, each our traders and owners. That’s why it’s felt so onerous. That is so onerous, and don’t get me fallacious, we’ve gone from 40 yr lows of unaffordability to love 38. It’s not nice, however it’s shifting in the best path. You bought to backside out. Issues want to begin shifting within the path. And so that’s my primary pattern that I hope goes into subsequent yr as a result of all of those methods, whether or not it’s on market, deal combating, gradual burrs, doing onerous cash loans, bonus depreciation, all the pieces will get higher if affordability improves. And so I’m hopeful that this pattern that we’re beginning to see develop within the second half of 2025 extends into 2026.

Kathy:
Yeah. It’s simply that each one that appreciation occurred all in a few years as an alternative of over 5 – 6 years. So we’re getting nearer to that 5 – 6 yr level the place we might be, had charges not been so low. And in that point interval, there have been some jobs the place there’s wage development, there’s some areas the place there’s wage development and we’re seeing housing costs flatten and even in some areas go down and now mortgage charges getting again to nearer to six%, which may be very regular. Superb charge. So yeah, I feel that this lack of affordability has been a short lived factor, a results of the pandemic and identical to the pandemic by way of a number of issues out of whack, a number of costs went loopy. It’s all sort of coming again to the place it might’ve been had there been no pandemic. So hopefully issues are going to come back again to regular normalize, after which Henry and James are going to be like, why is it taking a traditional period of time to promote a property? I don’t like this. I

Henry:
Don’t. We simply need the very best of each worlds. I would like to have the ability to discover a deal with out working for it, and I would like to have the ability to promote it in three days.

Dave:
Yeah, actual reverse. Investing market situations. You need each of them on the similar time. Yeah, that’s an affordable request. Completely. Properly, guys, I’ve to say my actual favourite factor is doing this podcast with all of you. So I’m going to finish on a corny notice on the finish of the yr, however I actually do love doing this present. It’s very enjoyable having you all right here. And thanks all a lot for listening to this present. It has been an important yr for available on the market, and we have now some extra enjoyable, thrilling stuff deliberate for subsequent yr. So thanks all for being part of On the Market Neighborhood.

Kathy:
Oh, thanks. And I feel we’re developing on one other anniversary.

Dave:
It’s going to be our 4 yr anniversary.

James:
No manner.

Dave:
Yeah. Isn’t that loopy?

James:
Find it irresistible. Yeah,

Dave:
It has been a delight and the present continues to develop and do nice, and it’s actually due to three of you. So thanks. Thank

Kathy:
You. Properly, thanks.

Dave:
Alright, that’s it. That’s what we bought for you for On the Market Right this moment. Thanks all a lot for listening. We’ll see you subsequent time.