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

Dave:
The end of 2025 is here, which means it’s time to look back and reflect a little bit on what worked this year and what tactics that we enjoy that we’re going to carry into our strategies for 2026, and today we’re going to do something a little different. We are sharing our favorite things of 2025. It might be a trend that you’re obsessed with, a headline that changed how you invest, a portfolio pivot that really paid off or just a big lesson that we think every listener should carry with them into next year. To do this, of course, I am joined by Henry Washington, James Dainard and Kathy Fettke for our ideas, strategies, and moments from 2025 that we’re going to bring with us into next year. You’re listening to On the Market. Let’s jump in. James, Henry, Kathy, welcome to the show. Thank you all so much for being here. Every year, my wife’s family does this big Christmas Eve party and they do this thing called favorite things, and rather than just doing a white elephant or like a secret Santa, you bring three of the same thing. It’s something that you really like and then everyone trades them and every year for the dudes, it’s just either you get a three pack of golf balls or a six pack of beer. Everyone. Men are just, all we have is two things that we like.It’s so simple.Yes, but it’s a fun game, so we thought that we would do something like that. We won’t obviously do any trading, but I’m curious about your favorite things of 2025 so that we can share them with the audience and hopefully they can learn something about what they might bring into next year. Does that sound good?Yeah.Yeah. Alright. Well, Henry, I’m going to pick on you. What is your favorite thing about 2025 that you’re bringing with you?Well, look, Dave, as someone who enjoys finding real estate deals and someone who wrote a book on helping other people learn how to find real estate deals, my favorite thing of 2025 by far has been the return of being able to find a good deal without having to be this professional investor. There have been great deals on the market.Yes,There have been great deals if you’re just willing to do a little bit of work and reach out to some sellers. I’ve bought more deals from wholesalers this year. Typically that’s been a harder thing to do. It’s just the availability of a quality deal seems to be back and it was gone for a few years. You had to work really hardAfter four years of this show. The name of our podcast finally makes sense on the market. You can now actually buy deals on the market in 2025 going into 2026.Absolutely. Do you have to still negotiate? Yes. Do you have to put in some level of work? Yes. If you want to find a deal on the market, you still have to be willing to make an offer at substantially less than what somebody may have it listed for, but what we’re finding is there are more people willing to say yes to those than there was before. It used to be this needle in the haystack drill and now it’s not as challenging. Like last week I probably made 10 to 12 on market offers and these were just verbals. We weren’t even submitting the actual written offer. We just had my agent verbally and we say verbal, but they basically sent a text message to the listing agent saying, Hey, my investor client is interested in this property. We’re willing to make an offer of x. I know it’s not what you’re looking for, but we can assure you that we’ll close fast, it’ll be all cash. We won’t ask for any repairs, and just sending 10 to 12 of those text messages. I got two responses where I was able to go look at the properties and then adjust my offer and one of those were about to put under contract. That’s an amazing number to make 10 verbal offers and to have two responses and get one under contract, that’s easy.Join me on the lazy side of investing, Henry,SoThe water is warm. It’s so nice over hereAnd the deal we’re going to put under contract, no work. It is completely renovated. It’ll just be a turnkey rental. I’ll get it. With 60 grand of equity,I mean this is the best favorite thing. Now I switch my head. It’s so true. This is the best one. This is the best thing that’s going on in the market right now is that you can find good deals. It just feels so much easier than it has. It’s funny, I do the state of real estate investing thing every year on BiggerPockets and I’ve been writing it over the last couple of weeks and I was like, I think investing is just getting easier. I think that’s what’s happening right now. It’s not easy, but it is trending in that direction and that feels good after years of it just feeling harder and harder and harder. I just think on market’s always been available, they’re just less hairy right now. It’s just a little bit simpler on market distressed homes people, not everyone sells those to an investor or goes through a wholesaler. Those still hit the MLS, but there are decent condition properties, properties that you could buy with a conventional mortgage on the MLS that actually makes sense these days. That is different. That’s a good favorite thingAnd it’s really excitement about what comes after the deal. Yes, it’s amazing that now it is air quotes, easier to be able to find deals, but what that truly means is we’re starting to see the return of year one cashflow. Again, that’s kind of gone away over the past two to three years where you were having to wait until year two, three year five before you’re really seeing the cashflow numbers and you were really just breaking even if you wanted to a buy and hold investor over the last couple of years, but because of this opportunity of being able to find deals easier, if you’re willing to do just a little bit of work year one cashflow is returning in a lot of markets now, maybe not in California where Kathy is. That’s still a challenge, but in a lot more markets, you’re able to now buy properties without having to do a ton of work and get cashflow in year one. We’re back, baby, we’re comingBack. It’s slow, but it’s good. Yeah. All right. Well, Henry, I think you stole the show already going first with this one, but let’s move on to someone else’s favorite thing. James, what’s your favorite thing?A couple of things I do like about this upcoming year that was a great experience for me this year was one, because there’s more deals, like you’re saying on market. You can buy a little bit easier flips right now. You don’t have to go as deep to make the return, but my favorite thing for the year, I feel like this is what everyone’s talking about, is the expenses have been increasing all the way across the board, and I love being a private money lender right now because no matter what, even if you’re not taking, you can do it in so many different ways and they’ve been great because they’ve freed up time for me where I’ve done some passive equity deals, but also just the steady interest rate, the consistency of it. It’s the only thing that hit a hundred percent of what I thought it was going to do for the year.I mean, I love it too as a concept. Are you worried though, with flip sitting on the market? Are you worried at all about the operators being able to execute deals right now?No. You have to vet your people, right? I do seconds. I do a hundred percent first, but it has to be for the right operator in any kind of deal. If you’re investing with the right operator, you might actually charge them a little bit less for that kind of leverage, but they’re bankable and they have assets and they will pay the bill, and to this day, I’ve never lost money on a hard money loan and we’ve been lending since 2009. You have to do it correctly. I saw people get smoked in 2008 doing the bad kind of loans, second thirds, gre, gre, greed, chase the rate, but it’s steady. You don’t have to worry about rising taxes, rising insurance, eating up your cashflow. You don’t have to worry about sitting on the market too long, paying too much in an interest expense. You are the interest, and at the end of the day, being the bank last year was the most profitable thing.Wow. Some people like James operates his own hard money lending fund. I do hard money investing just in other people’s funds and even that’s great, you don’t earn as much, but I’m in a couple of funds and they just pay every month. That’s real mailbox money if you want it. The minimums are typically expensive, but I know a lot of good operators who have debt funds right now and they do really well. It’s a great way to make cashflow and it’s way for me personally, I think about trying to balance my long-term investing approach, which is what I do with most things. Buy properties I want to own for 5, 10, 20 years, but I’ll take some cash right now and the hard money renting works pretty well for that, so I think it’s great as well, and I’m glad you have such an optimistic outlook for it going forward as well, James.Well, the cool thing about it is you can balance, it’s hard to make cashflow on a single family right now, but you can park some money there, or even if you’re losing a little bit on that, you can offset it by putting it in a hard money fund, kicking out the cashflow to cover, so you can do a blend to get a really good rental property, but you have to vet your funds, vet your operators, who are you putting in the fund? What assets do they have? What are they lending on? What’s their average duration? Don’t just take someone’s word for it. Dig into their portfolio and what they’re lending on and who they’re lending to.That’s a great point, and thank you, James. I think this is something we don’t talk about a lot, but I think lending and being on the lending side has been a great thing and probably will continue to be for the foreseeable future. A great favorite thing. Alright, let’s take a quick break, but when we come back, we have mine and Kathy’s favorite things. Stick with us. Welcome back to On the Market. I’m Dave Meyer here with Kathy Fettke, Henry Washington, James Dainard, talking about our favorite things in 2025 things we’re going to carry over into 2026. Kathy, what was your favorite thing of 2025?Oh my gosh, I have like three, but okay,Me too. There’s so many good things that happened this year, but so many start withOne. I’ll throw the first one out that I’m not going to go elaborate on, but AI has been extremely helpful in underwriting in so many things, but I’m just going to say, I’m just going to put that out there. We’ll do a whole nother show on that, but that was one of my favorite things and I really look forward to learning it more in 2026, but I would say for 2025 specifically bringing back that a hundred percent bonus depreciation, baby, that’s a big one.Not surprised to hear that. That being your favorite thing, that is a big one for real estate investors. Maybe explain to anyone who’s not familiar with what changed this year and how beneficial that couldBe. Bonus depreciation is the first year depreciation that you can take, and it was sort of winding down under the Tax Cuts and Jobs Act is when we first got it and it was a hundred percent and then it went down to 80 and then the next year it went to 60 and then this year it would’ve been 40% bonus depreciation that you could take in your first year of owning a property. Again, I am not a CPA, do not hold me to this. Talk to your CPA, make sure you get the right information. Don’t trust me. I have to always say that when you talk taxes, but it was really dwindling and so you couldn’t take massive write-offs in one year. You used to be able to, until the O-B-B-B-A, that one big beautiful Bill act brought it back up to 100% and it’s permanent.
However, I have personally talked to several CPAs, interviewed them, tried to really get the nuts and bolts of this, and they disagree, and I’ve hounded them on this one thing, and I just want to say this is something that’s really important to look for is that the way I understand it is that the a hundred percent bonus depreciation is only good on properties that are purchased after January 19th, 2025. So a lot of people think, oh, I’m just going to get this a hundred percent bonus depreciation on an older property, and I’ve had CPAs go, yeah, yeah, that’s what it is, but the way I understand it is it has to be a property bought this year after January 19th, so look that up because it sounds like you can still get the bonus depreciation on older properties, but it’s at the 40% level that it was. So the a hundred percent is on newer properties. Again, don’t take my word for it, but go out and buy a good property that you can bonus depreciate.And from what I understand too about the one big beautiful bill act is it is not set to expire, right? It is indefinite,Right? It’s permanent.So even if anytime you buy a property now you can consider doing this. So bonus depreciation is an amazing thing for real estate investors, but all of you are considered real estate professionals, right? Tax status.Yeah, absolutely.Yeah. As someone who’s not that, it doesn’t really help me unfortunately, which stinks, which I just want to call out for people because it can help a little bit, but depreciation usually, at least for me as a real estate investor, if I buy a rental property, the normal depreciation without bonus depreciation usually offsets my rental income, and I don’t wind up paying tax on the income from a rental property, but I still have to pay all of my income tax for my job at BiggerPockets. I can’t take the depreciation from my passive investments and apply it to my active income. That is only reserved for people who have this real estate professional status. And so bonus depreciation is amazing. If you’re an agent, you’re a professional investor, if you’re a property manager, if you have that status, you can offset almost all, sometimes more than your active income. But if you are not doing that, and you should look up what it means to be a real estate professional status, I just want to call out to people that you might not get the full benefits of bonus depreciation because I painfully am aware that you don’t get them unless you’re a real estate professional.Unless you have a short-term rental.Short-term rental loophole.That’s the only wayAround that.Yes. That’s why there’s all this talk about the short-term rental loophole because yeah, James Henry and I can get this bonus depreciation on anything because we’re real estate professionals, but if you have a full-time job and you do that more than you do real estate, then you’re not, and unless you have a short-term rental, it’s a loophole for now, and that’s why people kind of go about thoseUnless you have a short-term rental that you manage,That you manage, manage that you have toManage.Yes. But isn’t it also too, if someone’s significant other is a licensed real estate broker that then you can run it through that way?Yes. If your spouses,Yes.It’s not just if they’re a broker, they have to also manage your portfolio. There’s more to it than just being a licensed real estate agent.You have to be actively involved. There’s something called active participation in each deal that you bonus depreciate.Oh, it’s not just sitting in open houses. Yeah,No, you have to actually, I’ve looked into it. Believe me, you can’t do it that way. But this is great for anyone who does have it. I do think it breeds a little bit of life into the market too because it just adds a bit of incentive for people to transact on real estate, which we need right now because there’s just not a lot of transaction volume. So I think this is definitely a good favorite thing. Did you have another one, by the way? Ai? You said this one.Yeah, I do. And we could talk about it on a future show, but seller financing I think is a really incredible opportunity because there’s a lot of people out there who can’t qualify, and if you can help them qualify by being the bank, being the bank and doing seller financing, then there’s a huge opportunity there. I thinkAnother good one. Yeah, we will have to talk about that on another show. We do have to take a quick break, but I will tell you my favorite thing when we come back, stick with us. Welcome back to On the Market. I’m Dave Meyer here with James Dainard, Henry Washington, Kathy Fettke, talking about our favorite things of 2025. Henry started with on-market deal availability. Then we talked about James’s love of being the bank right now and hard money lending. Kathy shared with us her love of bonus depreciation. I’m going to bring, I struggled with this. There’s a lot of things I like. I got to be honest, James, I thought about saying flipping because James has brought me over to the dark side. We’ve done two deals, but they haven’t closed yet. They’re pending, and I’m not going to call them my favorite thing until they actually close, but it was close.
But my favorite strategy is actually something I’ve been doing for a long time, but I named it this year and it seems to have sparked some interest from people. I love the slow. This is just something where I think it’s basic boring real estate investing, but it has been working for me and I’m going to keep doing it in 2026, I think during the pandemic and the years leading up to it, people got the idea that the burr, it had to be perfect. You had to be able to take a hundred percent of your money out of your deal that you had to do it in six months and extract all this value out of it immediately. I honestly never bought that. I don’t think that way. I think the way that I’ve been buying deals for the last two or three years makes a lot of sense.
I’m buying small multifamily properties with tenants in them often, and I just wait. I left the tenants stay there as long as they want, and these deals typically cashflow right off the bat, but not crazy, like two 3% cashflow. So I’m at least making money, holding costs are covered. Then when the tenants move out, I renovate it, I bring the rents up, and then the next time tenant moves out, I renovate it. I bring the rents up, and once I’ve done that, I’ll refinance, take some money out and still have a great cash flowing property, usually in the eight to 10, maybe even higher percent cash on cash return. I’m not pulling a hundred percent of my equity out on these deals, but I’m at least pulling out all of my renovation costs. And then you have a great property that’s now in great condition.
You could go on and do it again. And I just love it because it takes all the time pressure off of it. I feel like so many people have these expectations that a burr is like a flip, but when I’m buying these properties, I don’t have a 12% hard money loan. I have a conventional mortgage on these properties. I’m making cashflow on it. There’s no rush. I am making money every month holding onto this. So it really, as someone who works full time, I think is a really good strategy because it allows you to get the benefits of value at it gives you cashflow, but it’s not this super time consuming stressful thing. So the slow burr is what I love and it’s something that I am planning to do more of heading into 2026,I love me a slow burr,WhichIs basically real estate investing.I was going to say it’s called real estate.Buy a property, it goes up in value, you refi it, you get your money out. I mean, yeah, that that’s traditional.I know. I guess I felt the need to name it because everyone says the bur is dead. You’ve heard this, right?It’s such bs. BurIs dead, right? It’s such bs. I guess I’ve said this in a lot of context recently, but I just don’t think the market sucks. I think people’s expectations suck. What’s holding back real estate right now is people are expecting these crazy returns. It’s magic. The fact that you could ever do a perfect bur is a little bit of magic. You could, and that’s great if you were able to pull that off, good for you. But don’t count on that happening. Lightning can’t strike every single time. This is a great way to make money. It is a boring way to make money, but it is predictable. It is very safe in an uncertain environment and there’s very low risk to this. And so I just think this is the tried and true way of being a real estate investor.Have you ever noticed that the people that say the burrs are dead are usually trying to sell something and then they’re trying to sell something else and then they’re trying to sell something else? It’s just because it’s not the trending topic anymore.Yes,But there’s so much opportunity. I’m with you, Dave. Actually, I might go slow. I think it works really well. There is no excuse to do a burr sometimes. I don’t want to do that heavy of a rental, and that’s the only way I can get that deal done. But what you’re saying is the strategy works, right? You just got to park your money, wait for ’em to move out, and your repairs are not that heavy. They’re more cosmetic.Yeah, exactly.Which is great. You can control those costs and then just those minor little cosmetics increase it enough to get your cash back out or a chunk of it. But it’s a great way. I’m trying to buy 10 of ’em this year. That is my goal is to buy 10 burrs and I’m going to go a little bit heavier. I want a 10 31 ’em later into a little bit bigger property in California. That’s the only way I can afford this rental property in California is if I buy 10 burrs somewhere else and then create the equity and trade it out. And so it’s just money in the bank burr is by far the most impactful strategy you can do.I totally agree. And I’ll say some of them are cosmetic, some of them are a little bit more, I’ll change a layout, you’ll do some structural stuff if it makes sense, because some of the deals I’m seeing, and I think, again, this goes back to what Henry said about more deals on the market. Some of these deals right now, the rents are like 50% of market rate. It’s crazy how low some of these rents are. No one’s renovated them, and maybe you need to change the bathroom, change the layout to be a little bit more modern, but you could double your rent some of these times if you’re willing to do this, and it’s not. You’re going to have three months, four months of vacancy in these things. But the other part of this that I love, James taught me this, but it’s like you could permit these things while people are living there.
So you’re not losing all this time or having all these holding costs, just get it permitted. You’re ready to go. They’re moving out usually 60 days ahead of time. You could really reduce your holding costs and your expenses by doing it this way. So depending on your skill level and your appetite for risk, you can do a heavier reno too and still use this method to control your costs. Alright, well those are our favorite things. I have to add my one bonus one, I read a stat the other day that said that affordability in the housing market is the best it’s been in three years, and that just warms my heart. I just want to tell you, I think it’s awful how unaffordable housing is in the United States, both our investors and homeowners. That’s why it’s felt so hard. This is so hard, and don’t get me wrong, we’ve gone from 40 year lows of unaffordability to like 38. It’s not great, but it is moving in the right direction. You got to bottom out. Things need to start moving in the direction. And so that is my number one trend that I hope goes into next year because all of these strategies, whether it’s on market, deal fighting, slow burrs, doing hard money loans, bonus depreciation, everything gets better if affordability improves. And so I am hopeful that this trend that we’re starting to see develop in the second half of 2025 extends into 2026.Yeah. It’s just that all that appreciation happened all in a couple of years instead of over five or six years. So we’re getting closer to that five or six year point where we would be, had rates not been so low. And in that time period, there have been some jobs where there’s wage growth, there’s some areas where there’s wage growth and we’re seeing housing prices flatten and even in some areas go down and now mortgage rates getting back to closer to 6%, which is very normal. Very good rate. So yeah, I think that this lack of affordability has been a temporary thing, a result of the pandemic and just like the pandemic through a lot of things out of whack, a lot of prices went crazy. It’s all kind of coming back to where it would’ve been had there been no pandemic. So hopefully things are going to come back to normal normalize, and then Henry and James are going to be like, why is it taking a normal amount of time to sell a property? I don’t like this. IDon’t. We just want the best of both worlds. I want to be able to find a deal without working for it, and I want to be able to sell it in three days.Yeah, exact opposite. Investing market conditions. You want both of them at the same time. Yeah, that’s a reasonable request. Absolutely. Well, guys, I have to say my real favorite thing is doing this podcast with all of you. So I’m going to end on a corny note at the end of the year, but I really do love doing this show. It’s very fun having you all here. And thank you all so much for listening to this show. It has been a great year for on the market, and we have some more fun, exciting stuff planned for next year. So thank you all for being a part of On the Market Community.Oh, thank you. And I think we’re coming up on another anniversary.It’s going to be our four year anniversary.No way.Yeah. Isn’t that crazy?Love it. Yeah,It has been a delight and the show continues to grow and do great, and it’s really because of three of you. So thank you. ThankYou. Well, thank you.Alright, that’s it. That’s what we got for you for On the Market Today. Thank you all so much for listening. We’ll see you next time.