How to Accurately Forecast Your Real Estate Market in 2025
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every home. Today, we're going to look at good and bad rental markets for twenty twenty five. And most importantly, we're going to teach you to identify the is for yourself .

the most important thing guys doing. Obviously, if you're going to be investing, if you want to go where people are actually going because that even if you make a bad investment, that population growth can save your butt. But I also think .

it's important that people know how to do this for themselves because one of the main questions we can ask is, is that for a good market is like this small town in arizona, good market. Is this a good market? Is that a good market? And the sure is if your strategy is just ask people and believe what they say. So bad strategy yeah.

I get this asked a lot of every day, I think in some capacity. So IT comes through an email text or or I just have no more conversation to people. And as you guys know, one side of the street is very different than the other one.

Some market you very different than the other, you know. And and there's lots of things to look at. And when you're looking at these statistics, I think it's really, really important that you understand that these are national, their statewide, their city know.

And that doesn't necessarily mean that even the ones we're going to talk about today are the ones you should hang your hat ot you got to to go deeper like like for example, right now we're in phoenix. Well, there's a huge difference between east, west, north phoenix, huge, right? And then of course, so some markets are very different. So so when when we're talking about these cities were talking about city wide, right?

Yeah, absolutely right. So don't just think if we say phoenix is a good spot to buy that you should just buy anywhere and phoenix.

you're going to be fine.

That is not how was, but we are going to show you how to identify, you know, based on some cities we've pulled and then you can do that even in a more local space.

And we do this is exactly what I do, guys. If I want to put my money, you know and invest somewhere just like you guys are, where there's raise your money or put your heart and money somewhere, you know, the things we're going to talk about today are things that you can use to make sure that you know you you you're doing IT Better than than the people that are just not doing you just guessing.

So the first pull up the population because can touch done that already. So the markets we're gona look at today or columbus, two son, seattle finance, biggest portland in new york city. okay.

So to start, you're always onna want to look at the population in area. And this is just basic econ. Like if a place is losing people, there is going to be more demand less and on rentals.

right? And so before you go off here, I just love a point a couple of things out. Obviously, the numbers at the top of the chart, those are averages, right? Um and how do we know where these numbers come from? There's so much data guys like, and I think this is important, how if if somebody moves to another location, then of course, the address changes.

Okay, that's a data point. As example, there's all kinds of ways to the the us. Postal service through outstate drivers' licenses and things like that.

So there's and these are rounded numbers, but they're very, very good numbers. Um that's one thing. The other thing to look at that is can be most impactful would be the percentage.

So when you drop eighteen thousand people into a city like columbus, that significantly more then eighteen thousand people in a big city. So you know, you have to look at the percentage of population growth as well. So take up.

So so as you're looking at both of those, you gotta look at like what's the current capacity? If you if you got to a city that has two hundred or three hundred thousand people at IT and you've got you know thirty thousand and twenty thousand people that go there, that's a significant change in the tower. But um if those that same a mount, most of thee x IT doesn't even make a det. It's IT just absorbs a if if that makes sense.

Yeah absolutely, absolutely. And I and I do think on the seattle, the percentage is wrong there. I believe that this was to be point to six percent and nine two point.

yes. So that's kind of the point there. So if you take a look at the population growth in those two areas, seats are huge.

I is where i'm from, all right? IT is big and there's a lot going on there. Columns small, that's basically where deals from. So she's from ohio, but she's not specifically from colum. But the point is for for column almost a one point eight percent population growth based on their current um size where seattle it's IT was less than three per less than point or three percent right?

right?

And that is A A little Better mistake. But I will tell you that's what you want to look at, not just the number of people you want to look at the percentage impact. And then, of course, like anything, where in columns are they moving? Are they moving to the north side, to the south side, the central downtown? All different? And that that data is that data important and that data is out there so you can actually drill down even further. And this is how you look at some market. So clearly, the reason we have calm on here, you know, because we were joking around .

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We fair every style, every home.

Columbus is one of the fastest growing cities right now.

Yeah, so so .

it's and you can get stop there affordably. okay. So if you can buy stop there affordably and you have people moving there could be good, might not be, but I could be.

So again, just that would be something for them. When you get there, of course, you need to see where where in costumes. You know, what is the right side of the street? Where do people want to go? So that's how you look at this data.

This is, this is very topical. And then you dig down further about, but jerk, to pull up a quick. One of the most noble things are the ones at the end, portly new york city, negative.

okay. Now obviously, that impacts at the other direction. So you don't also don't want to catch a falling knife like you. How much longer that gonna be, who knows?

One plus, when you started to have population declines, you're going to have too much. Your supply demand is going to start to level out no matter why.

right? And what will happen is just think about you guys if if that many people moved out of port land, which is another area that I ve spent a lot of time in, that means that vacancies are long. You have vacancies longer.

That means that is harder, dly stuff up. That means the retailer ers are having a problem. That means that restaurants are going to be out going out of business because of how quite amount of people. Now of course, again pans out whether moving from but um all these migration patterns are super important.

Yeah absolutely. And I know you like to look at the u hall data too and I actually pull that um website. It's called the uh growth index report and it's a legit thing. And IT shows, you know, if people are taking one way you all because really reason, you would take a one way you because you're moving. So know if you look that data that is helpful too on kind of White states in areas people are moving to and from.

There is an other one, two north american violin in. There's a couple of these out there because you thought, I think kind of started that I could be wrong here. But they but they're amazing, right? Like who doesn't want to know where people are moving in way? These are one way moves.

right? Like, both are thinking, is all data right? Words like, oh yeah, like, I looked up this repot, you know, no, we look at stuff like this report because this is real time, real like solid information that's actually happening.

Jerry, go down a quake. Let's go to right there. Click on the arizona as the state to the right there down.

Oh, there you go. Yeah, there you go. arrival. Percent, fifty point three percent.

So that obviously it's ranked eight of the country right now. So this is how you use this as an interactive website. I highly does. Now it's important that you don't just rely on this because there's a lot of stuff.

There's the is at the B L S I think is one the um polestar services, another the out the multon m bd or mother vehicle that that's another. So there's a lot of different things that you can look at in and you'll find that they're very different. But what happens if you start to see. That a lot of this information is all kind of the same. So because you know a consumer has lots of choices, are who they want to, whether is atlas van lines, north american band lines, whether it's you hall, they have choices.

So river just made a good point on youtube. He said, pilot rents are going down. I've seen about one hundred to two hundred drops per month over the past six months.

Also, there's red control here. An organ approved a ten percent increase for twenty twenty five. So even with the ten percent inquiries, laylaz aren't able to increase the rent. They're having to decrease the rent. And that's what you .

have when you see population. Clint, that's right. So organ is now rebounding.

If they they actually um they did statewide return l some time ago, i'm a little cloudy on wind, but now they're trying to realize that people can afford to live there. And so that's what happens. And there's all kinds of other reasons, obviously.

But when you start to see population leaving, just like anything, guys, you know I use the analogy with concert tickets, right? If you got a concert with half of the tickets are going to, you're going have a fire sale, they can be given away. I try to fill the buts in the seat.

When is full. Then, of course, that's when you start to see ticket Prices go up. Think of the world series, which we just got done.

What I think of any big, boring ament like that is really hard to get a ticket. Same thing with the state, with people being there or not being there with the amount housing. So it's the same way. So these population and migration figures are really important for you to pay attention to as you guys are going out and investing your harder money.

So the second thing we want to look at is job growth. So job growth is directly correlated with popular and growth or decline. Um because I mean that make sense rate. If there's no jobs, people need to move out if their jobs, people move places for for jobs um so while weather in community and everything matter, jobs matter the most .

yeah yeah even there will be people that compromise, even safety, believe that are not yeah which is a big one though um and also the work from home thing that's that's IT flocks right now but that's that's starting to stable out as as as stabilized um as people are starting to go back to work um but these are jobs added and and I think it's important that you take a look at that too.

Yeah so so right. So we're looking at now because the little confusing here is that these are the top number is the population growth and then what's in the in the blue boxes is the job growth or decline. So when you can see is that, you know, two time created more jobs than people moving there, which means that's very good for the people living .

there would be a good place to invest. Yeah right? That means that there's bored jobs, less people. So that's what you want to look for is that inverse relationship. That's exactly what you to look for.

And I was looking at seattle, right? So seattle has created less jobs than the amount people moving there.

So but negative wage growth.

that's going to see negative wage growth and potentially flattening .

of rents and things up begin x you start to take a look at phoenix has done a much Better job than vegas um on actually attracting job because they will forget guys as a the vision in the government that's actually to trying to find employee's loyal to to relocate. They're doing all kinds of things to to do that because there's nothing because people move for jobs. They relocate from wherever they are, obviously for work. And so this is a big, big one. And that's why we're obviously super bullish on on photo x and vx on a long term.

So I wanted to look at so poland, I can't fight any job information for, interestingly enough, I was very hard and I look for a long time.

There probably isn't any right. It's negative.

It's definitely I would almost guarantee its negative. But I thought new york city is interesting. So they've lost six hundred thousand people, but they've also lost nine hundred and seventy one thousand jobs. So they've lost the significantly more jobs than they've lost people, which tells me that they're gonna lose more people because people don't have jobs.

right? And there now you can start to see there are some changes being done there in new york. Um the one thing that i'm just gna speak the in real quick with the day before election is that new york one of the reasons that you started to see red growth .

in new york OK all right, all right, all right. Say Jerry, can you play our you to video please that just talking about job growth in the phoenix market.

vox has some magic exists ty news for job seekers as IT continues to track new businesses, many already know about thailand. Summer conductor north fenix L G energy is opening a six billion dollar battery manufacturing campus in Green creep. The bench market electronics c meta, google all open up in mesa, especially southeast mesa.

Core power is a renewable energy company, which will be opening in bug guide in fiscal year twenty twenty three. Thirty companies announced or expected in the area, adding seventy seven hundred new jobs with an overall ever salary of seventy two thousand dollars. Of this new jobs, more than five thousand were considered high wage.

The average highway ge salary for the new jobs was eighty five thousand dollars. Vinik was actually rinks number one out of the fifteen top growth markets for the largest projected job gains by global real estate firm new mark group. In fact, nearly fifteen thousand five hundred jobs have been promise as part of the major manufacturing development.

Is important to know in that video is not just the fact that we are adding jobs, but we're adding jobs that are well paying .

to have really good point and their service, you know, worker job, let's say that you know, a lot of people do that are not as high paying, right? And and then of course, you want to look at the quality jobs.

right? And and so that and independent on on your rental unit. Two, if you have a sea level rn, all IT might not be important what level those jobs are at, right? Because you're going to Victory to to the servers and two people like that. But if you have a more A B level apartment building, b plus, you know a minus, you are going to want to make sure the jobs that are being created are in that demographic where they can afford your apartment.

Yeah, don't forget, like I grew up in seattle, as you guys know, i'm there all time. And one of the big employers that we all know that actually gone the opposite direction is amazon. So know amazon has been cutting over the years. And so why is that important? It's important because we're talking about investment.

So if you own real estate and you're trying to find renters and some of the bigger employers, um of course they know this is not to tell that way the dog here but there there is notable to understand that um that this can happen. And so when when you start to look at what's going on, what jobs, why would an employer move to an area? Well, because their employees have a fair rent, their employees have a fair house Price, their employees have a fair cost of living.

So so if the employers going to move somewhere, they're considering all of these things. And that's where these economic development departments kick in with these cities is they are trying to attract. So it's really hard right now to attract businesses to new york city because of all the stuff that's going on there, and it's clearly very expensive.

And so that eighty five thousand hours that you just saw on that video, if that those that employer was moving to new york, they would have to be well over hundred thousand just to live there. And so that's a direct cost to the employer. So that's why all this is really important.

And I think too, you know, you also have to look at where people want to live because employers are starting to look at that as well. So I know like cleveland inc. And cleveland, the employee over seventy percent of and clean clinic, yeah.

I hope they stay well.

And they had talked a few years ago about leaving and moving downtown. Th, I forget what what state but download somewhere. And I think what really saved him as covered happened because they were talking about this and like twenty, twenty and then cover ahead.

And I think you know everything kind of White crazy and they they standing up not doing that at least so far. But you know that's a major blow. But the reason they were doing IT as they were having a hard time finding surgeons and doctors and high level medical professionals, they wanted to move to cleveland to work there well.

now they can. Then they have yeah and for some reason they stayed, which is good. Ah you imagine clever cleveland through the rider man into.

but that's a good point rate. We're talking about how great of a market columbia, right? And cleveland is a disease right now too, but cleveland is much of less diverse in their jobs, right? They don't have as many large companies and clever and as you do doing lumb. So that makes clear in a riser investment just by default because if the cleveland clinic would pull out of cleveland, that would devastate landlord, that would devastate the population because all those jobs would move with IT.

I just think of detroit guys, the think of detroit, no, detroit, IT at one time was the fifth largest city in the country. About that now, probably not all in your lifetime. But just go back and look, the fifth larger acy in the country was destroyed. That was where a lot of car manufacturing happen. So as these big guys move around and as the economy goes up and down and as we outsource jobs and as we as the new comes in and the hole goes out, these are really important things to look at as you guys are investing.

Yeah and I you know MC, we used to invest in like oklahoma, the oklahoma market, right? And we stopped doing that, not because that was a bad market for us, but IT was just dependent on one or two industries.

And that made us nervous for oil at one time. Real, real. I was in total, sa was an alcohol a city, and and by the way, credible places, but very flat, right? So I invested in tulsa and oklahoma city, and I also invested in phoenix and two, son, let's say, all right, the vehicles are two sides like this.

And towser in oklahoman city, just state flat. And the why was that? It's because where where are people going that's IT.

So there's not a lot of new construction in okhotsk, an example, but there's all kinds of stuff gone in two thousand. And this has a lot to do with job, uh, growth. IT has a lot to do with the what the states doing to try to attract employers IT.

IT has a lot to do with where people want to be for all kinds of reasons, and all of that drives real state. All of that makes housing Prices go up and down up and IT also makes rent scp down. yeah.

And that's why we make a big deal on the diversity of businesses. That's why we show that video to show all the different companies that are coming to phoenix. There's a bunch coming to two sun and there's a bunch coming to and that's important because that is going to drive job growth. And it's so diverse that if just one of them pulls out.

it's not a big deal, right? So that's why this stuff is so important. And the other thing is that you understand it's evolving.

It's continually moving. So what we talk about today could be very different in a year depending on what happens. We have election tomorrow, so you will have to see who knows what's going to happen, obviously, from there. So those kinds of things can change things.

Yeah absolutely. And jury, we're going to skip ahead. I wanted you to pull up the vacancy rates. So it's just we're skipping one a moment. Next one yeah, that's.

No, let's go back to the other one. Let let's talk about this.

Oh, okay, perfect. That's okay. So we're looking at these vacancy rates here. And then in the buu, I believe IT.

the homes rented. okay. And I think this is important thing.

What's really important to see is now what do I see when I look at this chart, I think that support fifty six percent of the homes rented in the seattle area. Okay, what does that mean? That means that things they are really unaffordable.

That means that people can't afford a home. That's what that means. That means that the high person of people and seattle have to red, okay?

That seattle is by definition, very much a rentals market. okay? And you can see that obviously in new york and in in portland and lost vegas is surprisingly high.

I used to own in vegas. I used to live in vegas. I used to manage property in vegas. And of course, we own property in vegas. One of the reasons that we like vagues because again, if you're look at at this from a landlords perspective, you want that number high. Now it's harder to buy because um but um because the Prices.

But as you start to see this percentage go up in vegas as an example, um the only thing that's going to drive that down is affordability of single family hopes. That's what that's what that does. And so photo x as a really nice baLance of affordable single family homes because the the what's supposed to happen is my kids, I have two kids twice.

They're supposed they're supposed to build their credit when they're Young and grow their savings and then buy a home. And in the phenix area, they could still do that now maybe not in Scott deal, but they can certainly buy a home in some of the other surrounding market. That is not the case in many, many, many areas.

So in some of these areas like seale, poland or or new york, clearly, when you go to new york right now, you don't think I wonder if I can buy a place like that's not even on the table. The only thing you're think you about this, how cheap can I get my rent that's that's been on that way for a long, long time. And so there's consequences with that as well.

And when you're looking at these vacancy numbers like you have like two signs seems to be the highest with ten percent. Columbus, the lowest will talk about new york com, is legitimately the lowest with five point eight percent. What are you like? Like does that matter much?

Oh yeah course course yeah you have this a vacation in red homes. Um I I think that it's obviously going to a spill over and um you know vacation is problematic for anyone who's owns anything there is trying to rent IT, right? Doesn't really matter. Now of course, there's all kinds of nuances and things that you can mitigate there because you like for example, if I was going to buy important, for example, I would go look for anything.

I would look for you know three, four, five hundred square flow departments actually that are affordable because you know you're probably going to you want to keep them another thousand hours a month as an example, because that would be screamed like a deal and people would be willing to give up two, three, four hundred square feet, wherein fedex no one's gna run a three or four hundred square for apartment. You don't to mean and there's no reason to because you can you can get things pretty affordable in, in a lot of the surrounding areas. Now of course, there's areas that are expected and of course, these areas that are not.

But that's what I started to look at this. You know what you look at behind the numbers here and and but it's it's important when one of the reasons why columbia eps jump on off the page and the reason we have IT on because traditionally it's it's bit a small market. It's a small market and we have friends i'm actually invested with some friends and or mastermind um in in the clubs market.

And you know it's it's a great market right now. I personally invested there. And so you know you're looking at a five point eight percent with with with the high percent of homes being rented and and all of us student, you started to see with some affordability problems there. And you you're still have a cash flow there where a lot of these other Marks you're not yeah .

and I would let's address new york city. So we had nine hundred thousand jobs arrived, six hundred thousand people left. Yeah, we have a vacancy rate .

of four percent in which he looks just, I wonder why yeah, I wonder why. Yeah, it's crazy guys. Just take a look at the immigration numbers in those markets well and .

to be fair because you know we did say there's a negative six hundred thousand people that laugh um even with the immigration. However, I do think is important to note that the government is renting apartments to how is people, and I believe that's what's keeping the vacancy rate so low.

Well, we should talk about the government and their impact. And we find the whole show on this actually the number one employer who's adding the most jobs s by a long shot as the government. That's jobs. okay? The government is busting at the seems, are now of government workers being added.

Now, of course, they're funding, you know, the sanctuary cities and these, you know, these camera with the call of the immigration registrations and stuff like that, you know, where people are going and there they're actually taking down hotels and and master releasing them um and you know um is off the church guys. And by the way, it's not just new york. That's other places.

And we're seeing this in california as well and other places and we will talk about spraining field, ohio, but tell but you know the reality is there's a lot of people that came across the border, whether is legally or or illegally, and they're putting pressure on housing period. That's IT. And so what does that do? IT takes that housing stock out from other people.

And so what should have happened with new york is all those jobs left, all that population left, and all of a sudden home Prices should have dropped, rent Prices should have dropped. That's what should have happened. But that's not what happened because they replaced IT with immigration. That's exactly what happened. So so and this is be an obviously part of the big part of the debate.

So the next thing is interesting. So i'm going to have just say with these numbers that know it's hard to find the exact data on these numbers. So these are estimated, kay. So the first thing where to look at here is how much supply was added to each market in the last four years.

Yeah so you .

know you have and then over the top is the the number of people that moves.

Why the White are the you were added. And the reason I know that obviously, you guys know we're active in two thousand. We're active phoenix s we're active and lost figures.

I know for a fact that you know one of the reasons on the chart before you saw there was ten percent vacancy y rate I in two side because there were seven thousand units out with eight thousand people. Okay, that's why you have ten percent they can now that will get absorbed. Um and as you also saw a really, really, really robust jobs.

So the same thing with pen ix, you got fifty five thousand. And where is the last vegas? You got eighty six hundred. So what you're gonna a see there if you to flog at those two things is you're going to see pretty robust rank growth and lost vegas.

Yeah, I want to point that out because we just did a deal in lost vegas. So we raise money for called ulsa and that's already closed. But you know, look at the phenix fifty five thousand verses eight thousand, and they have the same number of people move there.

So look at you, two hundred people moving in, both much bigger, and you got fifty five thousand units being melt in phoenix and eighty six hundred and bags. Which one do you think we will have higher rent growth? And of course, we're talking about rank growth here.

We're talking about being a landor's. We're talking about where we're going to invest. So now we're actually shown you under the hood as to why we decide as a company as emc companies to invest in lost vegas. This is why.

Yeah and also a two sign right like corn know because while they did, while right now there's high vacancy, we know that some of those two hundred thousand people that move to phoenix are going to migrate to just how IT work.

right? So so now let's look at timing of all this. So okay, what I mean by that is so phoenix right now is starting to experience concessions.

They're starting to experience flat rank growth there, starting to experience a fight for every renter because you have fifty five thousand is being added. That's clear, all right. And so that's a great time to buy. That's a great time. You want flat as as somebody who's trying to buy property.

So that's why we're super active on trying to buy photo x right now is when you start to look at a large amount of supply, even IT might be a short period of time, it's going to disrupt the um you know the Operations because when you add that many units and you have you know a limited rt of people coming in, you know it's going to be Better. Further renter. So said another way, lost vegas is not necessarily great for the renter, but in phoenix, it's great further renter. But all things being equal.

and I want to look at port and in new york city to and in new york city, the data was a little skill to we. Some at eleven thousand, some said twenty three thousand units added. But, you know, so in poor and they added seven thousand units, which is not very much for such bigger city, right? But they lost twenty three thousand people.

And then in new york, they either go one thousand or let's say, twenty three thousand unit and they lost six hundred thousand people. So that's obviously not good, like good it's not good. But I didn't want to a point out seattle because seattle is kind of that middle market, right? Like columns and two sons and finex and vegas, we're all doing pretty good in a university universities, you know they're whatever.

But if you look, they added thirty seven thousand apartments and only eighteen thousand, five hundred people move there. So that's why you're see so you that's a that's a pretty big flag because it's the populations not growing significantly for such a big city. Jobs are leaving and there's a bunch of supply that was just added that's unneeded. And I live in seattle. I don't watch that market, but my guess there's a .

lot of concessions. now. Yes, it's important, guys. You understand there's a lag and I was talking about lag. So what what does leg mean that means when the fed say increases interest strates, there's a lag.

IT takes a while for to to make its way through the economy and effort to take same thing the other way, same thing with units. There's a leg. So as these units delivered all over the the area as big, then you'll start to see lots of options from a renter standpoint.

And the developers of those units, they're going to have to offer concessions to try to get people to move in. They're not going to have rent. Grote, so seattle toast for a while because you have not a lot of people moving.

There is a very large city, guys. Seattle is I I don't know of the top, my head how a compares to phoenix, but um I having been haven't grow up there. I know if there's a lot.

It's a big town. So um eighteen thousand versus two hundred thousand phoenix, that's what you need to look at and take a look at the units. It's not that far off.

If you look at the percentages, seattle is going to be in trouble for the next few years. So is that bad? Maybe, but it's it's a market to watch.

It's a market to watch. So you would want to start looking at its yatton in twenty five, twenty six, twenty seven when you know there's a blood bath going on there and less. Of course, there's an influx of people to absorb those units.

But what you always want to do when you're buying, if you want to look for units that are destroying the Operations for a market you want read, the property manager is really hard as super competitive you're trying to get attends, the vacancies are high, you're offering all kinds of stuff to get people to move into your place. That is the time you want to buy. That's where seal header right now.

Yeah absolutely. And that and I want to touch on so what we're looking at because this is really the most important chart, right? Because when you're looking at is, is how the population is impacting versus supply.

And we always talk about immigration and how that's pushing rents up. And sometimes I think people think we're being political or we're being whatever, but we're not. These are just sexual data.

If you have more people, no matter where, whether they come mexico or they come from texas, IT doesn't matter based on your supply. It's going to either push runs up or down. They're they're going to know they're onna be a job creation or there's not. So these are just real life facts, and that's why it's even important to understand further people immigrating where they immigrating too because that is a place where .

the rents are going to be pushed up. Yeah IT guys is just math like don't make a political .

yeah it's not um but I did want to say that if you aren't interested in investing with MC companies, you just need to go to invest with MC dot com for a slashed youtube. We do only take accredited advisors at this time. If you are unsure, if you are credited, uh, you can always email info at, can work directly.

M, all right. So let's have into our questions for the week. We have some very ute youtube people on here. And are you you tubers? If you have questions, let me know.

So I don is first, they said i've inherited a few duplexes and attended complex and the rest are divided among fee members. The property has of a managed properly, and i'm determined to start fresh and keep things complain, but I don't want to hire a property manager. Can you recommend resources or guidance for me?

Engaging and effective first ball. okay. Number one, h congratulations. Glad you got that. There's obviously i'm bias here, but one of .

the books .

site that I wrote was the A B C of property manager IT. And and then I what I would do is I we get involved with there's a bunch of local property measured trade groups like for for me the airport motor housing association and their small owner groups. And there there are typically very, very, very good resources in that. Particularly what you want to do is you want to get really in tune with the water is they say, washington, I think you want to get really in tune with the land or tenant laws in that market. And the one thing about that ten unit project and the sounds like you have a few some guessing that means six due six units, a few duplexes.

Um you are a little hindered with the what's going on on the other four because um if once in some boy's own everyone and the rest are fifty hundred, that going to be you you're going to have that as kind of a uh a competition so um but the I always tell people, if you have the time to do this, do this, I actually do agree you should six units you've got about that. I mean, you can rent six, especially in one location and he said, one handy man yeah guys say, wish mine were on the thing I know, I know so there's a lot of advantage es, to having one spot because denials got all over the so SHE said the handy man and they are driving all over the place and and they're probably similar, which is also good. So there's there's a lot of a positive IT is but for its always has to do with time um and you know where you want to spend your time, but if you don't know anything about IT, I hardly encourage you do IT.

Um and but you can also go on solicit other property managers and find out you know what resources they're using. But most of the stuff is available online. You should google IT pretty easily, pretty quickly. Now i've seen .

yeah and just know you know you're going to learn as you go and that's just part of the process. So subiaco is asking when you refinanced as IT changed the lower interest rate of the loan. So I assume they have a low interest free in considering refinancing.

yeah. So that's actually um IT depends. Obviously, we have a lot of loans right now that are below market. In what's market, let's say, in the five and limit five been to high five now i'm talking about commercial Fanny agency, pretty agency staff. You know our rates are today or in in that range.

And I know that because we just bought that property in vegas, I think we locked at five point seven. I think I was. So now we also have stuff that we have that we own that in the trees as an example.

So when you have a property, this is the trees. The refined means that you're actually you're actually leaving a very good loan and and it's gonna you almost two percentage points higher or or more um and so um I can also go the other way. So if you have something that say um is in the seven and you're able to get IT in in the fives.

And yes, and so you always have to take a look at um whether that's worth that. So right now, um I always tell people that if they've got stuff in the force and trees, they're probably Better off not refinancing even though a lot of people want want that equity. You don't think I would just mention is you probably should have a place for that equity.

So don't just refinance to refinance, right? You want to have a purpose for that money and hopefully, it's being reinvested somewhere and not just remodel in your kitchen, you know, or whenever that might be. So you want to make sure that if you're going to uh, more than likely if you're talk and refinance, you probably are actually looking at a higher intestate loan based on the history we had over last few years. Yeah.

if you do want IT for something like you pull a little bit money out to maybe help with something like a kitchen or model, look at doing a home, a city line, even though those typically are variable, is that you could keep your low rate. You have to take out a little bit of money for that on a height.

And then i'll this point out one last thing that's a significant ant refinance, and that is that money you get is tax free or tax to fred. So what that means is when you're when you're getting a new loan to replace an old loan and there's proceeds from that cash out refinance, that's actually not taxable because it's debt. So you you know you don't pay tax on debt.

You pay tax when you sell something. So so that's why you know you know the that's the burn model, right? Um that's the new bahaa refinanced repeat.

I think IT is so that's what that means. And now that works if if rates are stable and IT also works if they are going down. But when they're actually when you're actually financing out of something lower and higher, you might be the opposite. So don't forget to look at that new mortgage payment.

So next question comes from Karen. And this is question we get quite often. If i'm only making two hundred dollars a months on A N without calculating cap acts, how will I ever be able to retire on this?

I'm thirty four. Yeah sorry you I mean, no, no, no, she's talking about retire. okay. I mean, I know that's kind of brutal, but it's the truth. Um it's a heck of a question that's why SHE brought IT up so I got you can tell the truth and here's the reality is your text is paying down your mortgage okay, that's good.

Hopefully it's not interesting only that is interesting only um but on the other side of that, what you're not in retire on two hundred hours among the cash fall, that is actually what I think her point is. Um and so now there's a couple things that doesn't mean you sell IT. If you have an opportunity to to to refinance and get that that integrate lower, then of course, that helps your cash flow.

And maybe you can swoop at a little equity, maybe be IT up. But what you need to do is you need to call boy together. You need to have several of these.

And I know deal the you is looking at me. I know that she's got something. She's gonna completely.

I have some where words of encouragement and and and so what I was going to say, she's thirty four. So i've assume SHE as a thirty year mortgage, maybe fifteen, but probably thirty. So by the time the things off, if you don't refinance and you let this loan n right out, rents are going to inquirer, you know, over the next thirty .

years .

and and so do expenses, but to cash A A little more, but that once the war you just paid off to cans point probably can retire on one rental. However, if you're making you know fifteen hundred dollars on this rental after your mortgage paid off, that will be significantly helpful when you do retire. Along with social security or if you can snack up a couple of more of these.

But I do think with people, they they get frustrated because he even said two hundred before cabeca. So she's really probably IT not very kevan. But you know over time, IT will be Better and also will when the home appreciates you, if you want to, you don't want to recommend this, but you can sell IT and scoop out out that money as well. So know, if not.

here's what I believe, I believe that are going to go up. They said supply and I believe that house Prices are gona go up as well. So you what you have is a coupon where your ventres paying IT off for you.

And i'm sure frustrating you have a lot of you don't have a lot of cash flow, which is but is wise said what I said is because you you were actually talking about retiring. That's why is that is IT worth keeping? Yes is IT definitely is. Um you got you you is covered right and you know where else you going to move in and so that and you might have you might have an option there.

Well, and I do want to touch on this too because you know i've even done this up with my own rentals and I wouldn't necessarily ly say that was a mistake, but IT does stress things more. So you know you ve bought something that's very low on cash low and argument, ably breaking even at best rate because you're probably not calculating vacancy and you're not calculating cap CS and you're only making two hundred a month. So that for those looking to invest like when you're that tight, IT does make IT more trustful because what parents probably not saying is that you know she's having to come out a pocket here and there even though it's making two hundred a months because you know an ac unit goes out, something like that happens .

or a ten moves or .

attended moves and it's sitting for a months and a half two months on the market like so that's all negative cashflow. So you to be fair, you the reason I feel like caring that you are upset and your stress is because you're probably losing money on this unit. If you look at IT.

So IT feels more like a burden and you're wondering how I you're going to be caring that, right? So just those listening like that's why we always preached to have cash flow and calculating things like cap bags and vacancy or a lot of people don't unless you can just totally afford to come out of packet in and some people can as well. But I do understand why for .

her IT probably does a equity. And this is where to look at IT. I'm actually looking at this on some of the properties that will you know, I have I have a lot of money in in equity and a lot of deals.

And so you have to take a look at the cash flow on that equity. So if you have a plan for that equity and you also have to calculate tax. So if you exit this and you have a couple, again, you have to calculate that in because that's that's the next number.

That's the number that you will be getting and because you're onna have to pay tax um and then if you can replace that somewhere, so for example, right now i'm in the process of putting to at a billboard deal together with two two Young guys that I really like and IT kicks off about a twelve to four hundred percent cash on cash okay. Um so we've got the least we put a bill board up and um based on the revenue at like seventy percent OK, but see IT kicks off about the two percent cash cash. So you have to calculate what's your real cash on cashes.

So is there two hundred a month or twenty four hundred years? Or is that really a thousand hours a break given? And then watch your equity in there? And then can you move that equity to something else that actually makes more money and per month? Because that is a heck of a question. I and this is, you know we get this question a fair more and I don't want to tell you to sell IT um and um obviously i'm a huge huge um I I really believe people should have real state and owner for the long hall, especially if attends um paying them off for you. But you always gotten be looking at that, you know what's your actual real return on the money you have in there?

And i'm during that, my serious st property manager just set me in each backer placement invoice. Capex is real.

Yeah yeah. I mean, H V A C passed there in a thousand south, five, six, seven thousand dollars to put an A C unit in, if you believe that it's insane and you know so. But a lot of IT has to do also with is IT underrated IT could be is IT in an area.

There's a lot of rental, okay, that would be subbed. I would consider if the if area there's not very many rentals, then you're probably going to a be pretty good long term like the nail has a place that SHE bought. It's a condo unit. Three hundred units used be an apart of building but it's a condo and she's kind of SHE SHE can't raise rents more than you know her neighbors. So you know or is that is in an area that there's another minute and um so you have to look at kind of the next one to two to three years, but I do see positive rank growth in most markets over the next few years.

I some will thinking guys for tuning in, and we will see you next monday.