4 Trends That Are Making Real Estate Investors Rich in 2025

Are real estate investors finally finding cash flow opportunities again after years of struggle? In this episode of On the Market, expert investors Dave Meyer, Kathy Fettke, James Dainard, and Henry Washington reveal four game-changing housing market trends they’re seeing right now. These include new construction beating fix-and-flip returns and off-market deals becoming more common as inventory stacks up. Discover why cash flow is actually returning to stabilized rental properties and how smart investors are navigating today’s shifting mortgage rates, housing prices, and market conditions to build profitable portfolios.These are real housing market trends that expert investors are using to improve their portfolios in today’s market because the headlines can tell you some things, but there’s no substitute for the insight you get from talking to people with boots on the ground making deals happen right now. So that’s what we’re bringing you today on the market. I am Dave Meyer, joined by our expert panel, Kathy Fettke, James Dainard and Henry Washington. Today we’ll break down four key trends in the real estate market backed up by real world experience. We’re going to talk about new construction opportunities. Penciling better than a lot of other strategies, off-market leads becoming more common, properties only selling when they’re priced right and cashflow actually becoming more available even for stabilized properties. This is on the market. Let’s get started. Good to see you all. Kathy, how’s it going? So good to see you all too. Thank you for being here. How are you James?I’m doing good. Just trying to grind through this market. You’re giving off majorSummer vibes right now. You just relaxed andTan. I always wake up full of Zen and then I read my emails and I see all the issues going on at job sites and it goes away immediately.So the Zen lasts 45 seconds.It’s like for parents, when your kids are going crazy and then you put ’em in the car and then there’s a ten second walk from their side of the car to the driver’s side.That’s your moment for the day, Henry.Yeah. Then you get back in the car and you get back to it. Exactly.Well, I’d ask you how you are, but now we know how you’re doing that being the best part of your day. We know what’s going on in your life. So Henry, I’m going to start with you having such a peaceful morning. I’m going to pick on you first. What is one trend that you’re seeing in your market, in your portfolio that you think our audience should know about?One trend I’m seeing, not just in my market, but really nationwide, it’s a lot of investors pivoting from fix and flip over to new construction, either build to rent or build to sell, and I think that that’s a product of the interest rates, making cashflow difficult and a product of prices still being air quotes high and so cashflow is hard to get, but a lot of people are able to build for a reasonable price for square foot still in most markets.
And there’s a lot of people looking for work still. And so you can get labor less expensively, you can get materials fairly reasonably still, and you can build for a reasonable price per square foot and then that property is immediately when it’s done, is worth far more than what you’ve paid to build it. And then you can rent it out. And yeah, your numbers may break even on a spreadsheet, but if you account for maintenance being far less of an expense and your first 10 years and capital expenses being far less of an expense in your first 10 years because it’s brand new, then you actually are putting some cashflow in your pocket with a brand new property in some markets. But on the flip side, you can make the same margins in terms of profitability, sometimes even better margins in terms of profitability, depending on what you build and you can build processes into new construction that’s a little easier to build into than it is for a fix and flipper.
So in my market, one trend is people are building for about 125 bucks a square foot and you can build a single family home and you can sell that for two 50 to 300 bucks a square foot or you can build a duplex and sell it for substantially more. I can build a duplex for 125 bucks a square foot and turn around and sell that thing for 400,000. The duplexes are flying off the shelves, and so the returns on building a duplex are far greater than a fix and flip that I would do or a single family home build.You’re saying Kendrick, when you’re talking about the breakeven, if you build it and hold onto it, but you’re saying if you build it and just sell it then you can earn as good profits as a flip with? I don’t know. I’d ask you guys, it sounds like a lot of times new construction is just easier than flipping.Yeah, we’re finding out, I’m doing my first ones right now.It’s FFO time withNew construction, but from the people I know that are doing it, especially if you can get the land cheap, the returns are tremendous. And so I’m building, my new constructions are on lots that I’ve gotten basically for free. And so those returns are tremendous.It seems like a great opportunity. But James, you’ve said almost the opposite to me about the Seattle area that you think flipping has better returns than new constructions. Does that just come down to the land price?Well, it comes down to a couple things. A land price and then b, time to get permits In jurisdictions like Henry, how long does it take you to get a building permit on a flat lot where you are?About a month.A month. It can take us a year to get town home permits or longer, and so the debt cost will just erode the deal and that’s what’s been happening. A building is more systematic, but I can tell you our returns on building are a fraction of what we’re getting on annualized basics with flipping.It makes sense that what Henry’s saying though, I am guessing a lot of areas in the southeast, which just generally speaking is broad stroke have easier building conditions than in major metro areas, especially on the west coast. So that seems like a really good option for people to consider. Henry, what learning process are you having to go through to do this for your first time and should we be filming it so we can watch? That’s a good one. First watching, first ofAll, I am filming it. I’m doing a whole series on my Instagram, on my Instagram about it and it is titled what I would answer this question. I am building my first new construction home and I have no idea what I’m doing. And so no, what I’m learning so far is that it’s the pre-construction steps that are the most tedious and costly.But is that because you’ve only gotten to the pre-construction? Are you going to say that once you get to construction?No. Well, we’ll see once I get to construction, but we’ve really already got all of the construction lined out. I know who my subs are going to be. I know what work they need to do. It’s going to be fairly quick to get them in there to bid it and get started. What’s challenging is I’ve got one property, I know what house I want to build, but I can’t send that plan to the bank until we get a septic design done by the septic design company and based on what they determine where the tank has to go, that will determine what size of home I can build. Because where the tank goes depends on what size tank you can put in and what size tank you can put in determines what size house you can build. And so I don’t know what I’m going to be able to build or what my returns will be until they’ve done the design and I have to get them out there, do the design and pay for all that before I can even get a loan from the bank. So it can be costly and it can be time consuming on their time schedule. If they’re three months out, well then that’s what I have to wait.Oh man, if you’re in California and there’s an oak tree anywhere near that septic, you are going to have a lot of harder time.Yeah, it’s crazy.And that’s the thing, building in theory is more systematic. You can get a copy of plans, you get quotes, you’re dealing with a little bit more professional trades, but there’s the other things that are such a pain in the butt. For example, I’m looking at building A-D-A-D-U right now. We’ve been going through this. We have a root setback from the neighbor’s tree now that’s like 20 feet. And so we can’t build because the neighbor has a treeThat’s the most west coast crap I’ve ever heard in my life right there.Those are the things you have to check out though before building because it can be detrimental if you buy the long supply. Yeah.Alright, cool. Well, great strategy, good trend. Thanks for bringing this one to us. Let’s move on. James, what are you seeing in your market?I’m seeing a lot more off market deals. Seller settlement has changed, inventory has gone up quite a bit and hold times are really, really racking up. I think the average days on market is over 55 days on market nationally now. And in a lot of our neighborhoods it can be even longer. And as people are seeing inventory stack up and things not trading, man, my phone is ringing with off market properties. Really unheard of amount of phone calls right now and people are definitely willing to listen to logic and not just be like, I want my price and move on. And so that has been really on the increase. I would say my off market lead flows increase by probably three, 400% this month.And so it sounds like though it’s not just quantity, but the quality of them is getting better as well.You still got to dig through a lot of No. Okay. But I think one thing that we pride ourselves on is on an off market deal, we really do consider we’re paying market value for the present condition. We pull all the As is comps, back off the commissions, look at the upgrades versus the non upgrades, and then we submit our price based on logic. And that’s been helping convert quite a bit because it’s just saying, Hey, look, the market’s slow, this house took this long to sell, we’re going to close in a week for you. And not only that, you’re going to make the same as what that seller just did and how to go on a market and sit on it. And so people have been a lot more open to logic before, whereas it was just they want their price before. And most importantly, we’re seeing off market sellers open to different types of financing on their deals because the debt on flips is really beating up the returns. When you’re holding a house an additional three months, the hard money cost is real and it will kill your deal. And so sellers, we’ve been talking to sellers like, Hey, if you want to live at higher price, will you carry a note and do owner financing? And if you can reduce that debt cost, it makes it easier on you as a flipper and the sellers getting what they want.So does that mean you’re going to be buying more?Oh, I’m always buying. We’ve increased our margin returns. It’s a risk in the market, but this is the best time to buy because I talk about this all the time, is when everyone’s a little freaked out. There’s not a lot of competition, less buyers, better deals. And so we are definitely still buying. I’m looking for four more in Washington for the show too. So heavy fixers, we want and get creative with your financing. We’re talking to people about carrying notes. Some seller just offered us a 4% rate on a 90% finance contract. They owned it outright and that put about $65,000 more in the deal that way with not having the hard money cost.All right, cool. Well, any advice to our audience how they might take advantage of this trend?One of the best things that we’ve been doing is just networking with brokers too, because brokers also know what’s going on with the market and they’re educating their clients because our job as real estate professionals is to educate the client on pricing strategy, what’s going on in the bar table, how long things are taking to take. And because you have that person reaching out and working with an existing client, they can educate them on how your offer is solid and then don’t overpay just because it’s off market. So just don’t get the deal goggles.Oh man, I am out here making offers to wholesalers and they’re like, man, your offer is the lowest offer out of 10 different people. And I’m like, yeah, exactly. Yeah,But also your market’s doing a little better, right? You got to know your market. I mean, Henry, you were just saying you’re selling everything right off the shelf, right?Yeah, selling pretty quick, but that sounds better than it is. We are aggressive with our pricing strategy, meaning I am not shooting for the top ARVs anymore. I’m shooting for the low end of the ARV scale, and then we’re listing it cheaper than all of our competition on purpose. And so I may have underwritten it at 20 grand higher on my sale price, but when I went to list it, I didn’t list it with that 20 grand padded in there because maybe I had a comp that was listed for less. And I would much rather get all of the eyeballs and get multiple offers and a shorter period of time than trying to get that extra ten five, ten twenty grand and limit my eyeballs.And so in that market, Henry’s getting a little bit of juice, a little bit of speed, so there’s less cancels and there’s less expired. We’ve also, I’ve seen a lot of people getting deals off canceleds and expired listings, which did not happen before because people just wanted the high price. That’s why they canceled. There’s so many more canceleds, and that’s important when you’re evaluating properties now to purchase. Don’t just look at pendings, don’t just look at actives, don’t look just at solds. Look at what’s canceling, expiring around you, because that might tell you a totally different perception of what’s going on in that market, but I’ve seen sellers sell like 200 grand off their canceled price too. It’s like people are ready to move. Shoot your shot folks.All right. Well, with that, we do have to take a quick break, but we’ll be back with two more trends that we’re seeing in the market right after this. Welcome back to On the Market. I’m here with Kathy, James and Henry talking about market trends we’re seeing in our own investing portfolios. Kathy, you’re up. What are you seeing?Oh, Dave, I’m seeing so many things. Where do I start? Good things, bad things. What do you got? We are seeing most investors wanting to buy property in Texas,
And maybe that’s because it’s still strong, it’s still a strong market. Prices are pretty low and builders are having a tough time selling, so we’re able to negotiate those prices down. We also just refi our rental fund in Texas and same thing, we’re able to take that money and buy a lot of brand new homes at incredible deals. That’s one trend. We also have subdivisions. We syndicate from Oregon all the way to Florida, so I have an inside view on the sales side, not so much the buy side on that. And in our Florida property, again, very surprising, we have that Marada property just north of Tampa was 4,000 lots. This year we sold 400 homes. It is the top sixth fastest growing subdivision in the us and just in June there were 69 sales. So that one is doing great. And then we’ve got one in Bozeman that has been great and it’s slowed down. I can’t tell you why it’s still pretty affordable compared to other homes in the Bozeman area, so I can’t say that it’s because they’re too expensive. But then in the Oregon subdivision that we just launched last year, people, we have a lot of buyers who want to buy, but they can’t sell their home. So that’s kind of an interesting thing that I hadn’t seen for a while.Interesting.They want to buy and they want to put that offer in, but it would be contingent and they’re just not able to sell. So again, lots of trends going on here in Malibu. It’s man, if you ever wanted to live here, it is on sale. Nothing is sellingReally.I imagine it has to do with the fires and of course the fact that you probably can’t get insurance, but just details. But it’s crazy. A house, like I said this before, just with sweeping views, three bedrooms overlooking the ocean, just went for 1.4 or something. What cheap? Yes, for seriously? Yes.You got to let me know about these things. I’m not moving there, but I’d like to dream about it.Yeah.Wow, interesting. So it’s like a mixed bag, really what you’re saying. It seems likeDefinitely a mixed bag. And so I think the bottom line here is to know your market, but these are two different, our subdivisions are selling to home buyers, just people who want to own a home. They’re not rentals. But on the rental side, again, the majority of investors, and I consider our investors pretty educated and experienced, and they’re just again, flocking to Dallas, but also Cleveland because the numbers really work there. Indianapolis, you can still get cashflow. So yeah, that’s what we’re seeing there.Kathy, in Texas, have you seen the insurance rise kind of level out there as far as cost go? Or do you think people are also going towards new construction because the insurance costs a little lower?Yeah, we haven’t had issues, and even in Florida we really haven’t seen issues with insurance as much as people talk about it because a lot of, at least the ones that Rich and I bought and that a lot of people have bought through us are new. And so insurance is kind of not bad and neither are property taxes, but it’s terrible in California it’s really bad. Rich was just saying to me this morning, a rental property we have here went from 3000 a year to 17,000.Wow.In insurance.Oh my god.And the costs that they’re making in some of those states are going up pretty dramatically too because I’m doing that renovation in Newport Beach and I’m below the minimum threshold for construction on my permit, but they’re still trying to make me sprinkler the house and I’m like, wait, what are we talking about here? And it’s just because of the fires and the things that are causing the insurance to spike. It’s hitting you on your construction budgets too.But on our Florida one, I think our insurance went up 5%, so nothing unusual,But had it gone up more in previous years,I’m not sure. I’m not the data one.I think it goes up. I was just curious. Maybe it is slowing down, but it had gone up a lot in the previous years.So Kathy, on these bigger plats that you buy, because you guys buy some bigger stuff, I know a trend I’m trying to watch for right now is builders selling in the middle of building or fully permitted sites, they want to dump their product off. Are you seeing that? Because that’s what makes it a lot easier to build what Henry was talking about. The beginning work is the hard work, but if the site’s ready to build, those are some very good opportunities, quick, they’re easy. You can get financing immediately on that deal. Are you seeing a lot more of that floating around? Because I’ve been tracking that. I’m not seeing it in Seattle. I’ve been looking for it. Are you seeing a lot of opportunities there? I think that’s a huge opportunity nationwide.Yeah. I mean that’s the opportunity we’ve got with the Oregon land that we acquired. The builder just gave up after 10 years of trying to get it going. It’s very hard and certainly on the west coast, as you said, to get projects off the ground and we got it for an amazing price, like half what lot’s worth and it’s still been hard to sell those homes. Like I said, the buyers want the homes, they want the new home. They just can’t sell the home that they have in order to free up the cash. But I haven’t been looking, so it may be out there. We’ve been more interested in projects that are already almost finished or finished and can get, don’t have to do any work.Are you in a state where they’ll disclose who’s pulled permits for new construction? James, that’s probably where I’d start is just start calling or mailing those people who’ve pulled permits and see if they want to dump the land before they build.Yeah, we track all that. It is a matter of actually, permits are at all time. Lows being issued on townhome sites because land prices has been so high, dirt has been so high, bill costs are high. There’s not a lot of people applying for permits for town halls. There’s going to be a serious gap in in the next 12 to 24 months where we are, and so there’s just not a lot of it.I’d also check the agenda on the city planning meetings because a lot of these people are sometimes having to go and get approvals for the things that they’re doing, especially the newer people. And so just seeing who’s going to be on the agenda, you can make some calls. Man, that blew my mind. Someone did that to me with the project I was working on. They just pulled the agenda to the city planning meetings. It was a bank and then they called me and they were like, Hey, I see you’re looking at X, Y, and Z. Do you need funding? You can probably do the same thing with people looking to build and maybe want to offload land.Yeah, hard money lenders. You guys are great ways to find deals too because we have been reaching out to other competitive lenders locally to find out do they have any investors that want to dump off their properties midstream out of control costs or ground up, Hey, they got permits rolling out their levers high. Their lender might say, you know what? You have too many projects going on. We want more money down, and the builder can’t do it. And so they’re great deal sources for investors. Call your hard money lenders, whoever’s financing you, Hey, do you know anybody wants to get rid of their stuff? You will be surprised.Title companies have the same thing. They’re closing transactions. They know who the investors that are in there that are looking to sell off their portfolios because of problems they may be having. So call your title company and ask ’em if they know any builders that are selling and put you in contact.That’s great advice, Henry. Thank you Kathy for bringing us the story and for all the input. We do have one more trend to share with you. I think you’re going to be surprised by it. We’ll be right back with it after this. Welcome back to On the Market. I am here with Henry, Kathy and James talking about trends we’re seeing in our own portfolio. I’m going last and I think this is probably going to surprise people, but the trend I am actually seeing right now is cashflow. I am starting to see deals on the market that are cash flowing better than I have in probably three or four years at least in the Midwest where I’ve been looking at deals. I have a buy box set up with agents in a couple of different places, and I’d say in a normal week I probably get three that I would realistically take the time to analyze numbers on just because things aren’t good right now, but the last couple of weeks I’ve been getting 10 or 12, literally three to four times more interesting deals.
I haven’t pulled the trigger on any of them, but things are starting to get a lot more interesting in the little niche. I like to operate in small multi-families, inexpensive markets, and that is super encouraging to me. I think part of that is because prices are going to modestly, the other reason is there’s just more inventory, so there’s a better ability to negotiate. Third, rents are still growing, not gangbusters, but they’re going up a little bit and mortgage rates are coming down a little bit, and if you look at the combination of these things, it’s not like amazing cashflow. This isn’t like five years ago, but it’s a trend and I think if we continue on this trajectory, at least to me, this gets a little bit exciting. I don’t know if you guys are seeing this in any of your markets, but in the Midwest, that is definitely starting to emerge.What kind of cashflow are you seeing in the Midwest return wise?If you buy it on market and just put minimalized effort into stabilize it, you could still get three 4% cash on cash returns doing almost no work. If you actually go and stabilize it, you can get eight 12% cash on cash returns.Yeah, that’s good.Yeah.Yeah. The deal flows definitely kicking up. The margins get better when there’s more stuff for sale, that’s for sure.My hypothesis about this is that for the last five years, we’ve seen two to four units. It’s been so crowded, partially because on BiggerPockets, all we talked about is house hack because it’s legit a good idea, and so we’ve had a lot of people who want to owner occupy and they’re willing to pay more than investors, but I think the people who are trying to Hals hack and owner occupy that amount of people is going down, and so we’re starting to see the two to four unit inventory. The sellers have to cater to people who are putting 25% down. They can’t cater to the people who are putting 5% down and just need to redo their cashflow. So the pricing is having to adjust for where the demand is for this asset class, and that is beneficial for people who are not trying to own or occupy these things like I am.The rental market is definitely picking up because actually I put a house up for rent that I had up 12 months ago and it took me 60 days to fill this thing. It was dead, and we put it up. Tenants moving out in 60 days and I’ve had 30 inquiries on this property.Really? Wow.Put it up for rent last time. I’m like, I don’t understand. I barely bumped my rents. I renovated it, made it nicer, and I’m not even getting interest. It doesn’t make any sense, but now I do feel like rents are going to pop because people are not buying, so where are they going? And then the people that do own have high rates or high basises they got to cover, and so it’s just naturally forcing it up.That is encouraging. I think this is one of the things we’ve talked about on this show on the other BiggerPockets shows is one of the impacts of market conditions is I think maybe not this year, but as we head into 2026, rent growth is going to pick up and vacancies are going to start trending down. I think that’s probably true in multifamily, single family, small multifamily, and that is an encouraging sign. It gives me personally more motivation to buy, even if you buy one of these stabilized deals at three 4% or you could do a renovation to eight 10%, then rents are going to grow. That turns a deal that looks pretty good today into a really solid deal in a year or two from now.And then also, if you just look at trends, I personally think the Fed has a lot to do with those trends. Of course, they’re following trends, but when we know that they’re going most likely into a rate cutting cycle, it may not happen right away, but eventually that works as a stimulus because money becomes cheaper to borrow. More people can borrow, and like you said, Dave, every inch, we move closer to affordability. More people can come off the sidelines if prices are stabilizing, if they’re not going up as quickly or even in some areas going down. And then you see interest rates come down a little bit, mortgage rates come down a little bit. You’ve just got a few thousand people, maybe a few million off the sidelines, so it’s important to pay attention, and we’re going into that cycle of it looks like lowering rates.I hope you’re right. I’m not convinced.We shall see,I got to know, what is your buy box at 3%? Cash on cash, can’t be it.No, no. I was just saying you could buy a stabilized asset for that. Just as an example,
I’m still trying to do renovations for them. I’m trying to buy them at that rate, renovate them, and then get them to that eight, 12% cash on cash return is what I’m looking for, but the renovations are pretty much cosmetic. I’m not trying to do anything super serious on these and you’re able to find those deals. The way I’ve been doing it though is I’m not looking for vacant two to four units. I’m trying to find these deals that are going to cashflow when people move out. I renovate ’em my boost rent, so it might take me a year and a half or so to get it to that eight to 10% cash on cash return, but for me, I’m fine withThat. Okay, so performance’s eight to 12, so as you get, I know I’m getting more and more calls on deals too. I’m like, my return’s slowly going up too. Like if there’s this much inventory floating around, I want better deal. I feel like I raise my return every two weeks. I’m like, it started to freak me out.Yeah, because you’re worried about downside risk, so you have to have the bigger upside.Yeah, just heads against, and again, if there’s more inventory, you get a better deal.Yeah, I do. I think in these markets they’re still pretty solid. Prices are still going up and inventory’s not as crazy, but yeah, I do think that makes a lot of sense. I haven’t pulled the trigger on any of ’em, but I don’t think I’d take a performer of 8% right now. Probably 10 to 12 or maybe a little bit higher. That’s probably right. Maybe I should listen to James right now.I think I need to listen to you and go buy some houses out in the Midwest,Buy some cheap stuff, man. Just get a lot of cashflow. It’s great.I’ll go half on one.All right, let’s do it. I’ll go find one.I want to be passive this time. I’m going to throw half up into, you can handle my Midwest.Okay, great. Well, this was a lot of fun as usual. Thank you guys so much for talking about these trends. Let us know what you’re seeing in your market. If you’re watching this on YouTube or listening on Spotify where you can comment about it, let us know what you’re seeing. We’d love to hear what’s happening in your market. Clearly, as we’re seeing from this conversation, Kathy, in her multiple markets, James in an expensive market, Henry in a fast growing but a little bit more open to building kind of market me in the Midwest. We’re seeing a lot of different stuff going on right now, and that’s why we’re bringing you this information because how you adjust your strategy is really going to depend on who you are and where you’re operating, so let us know what you’re seeing. Thank you, James, Kathy, and Henry for being here. We appreciate it and thank you all so much for listening to this episode of On The Market. We’ll see you next time.