\n<\/p>\n
Buying a house<\/strong><\/a> in the 2023 real estate market is already exhausting<\/strong>. Sellers have regained control, and homebuyers are back bidding over every reasonably priced house within a decent school zone. But, buyers have gotten smarter, paying attention to one strategy<\/strong> that allows them to break even or sometimes cash flow<\/strong>, even with today\u2019s sky-high <\/strong>mortgage rates<\/strong><\/a>. And our two expert agents from entirely different markets agree: this is the way to go.<\/p>\n To finally tone down Henry Washington\u2019s non-stop Northwest Arkansas <\/strong>propaganda, we\u2019ve brought Ryan Blackstone<\/strong>, local Arkansas agent and broker, on to the show to break down exactly what moves are being made in his \u201caffordable\u201d market<\/strong>. But we\u2019ve also got BiggerPockets royalty, Anson Young<\/strong>, to give his take on where the significantly more expensive Denver market is headed.<\/p>\n Both agents review what buyers are looking for<\/strong>, what\u2019s selling<\/strong>, whether the buyer or seller has control, and the strategies smart investors use to cash flow <\/strong>even in an impossible housing market.<\/p>\n Dave: James: Dave: James: Dave: James: Dave: James: Dave: James: Dave: James: Dave: James: Dave: James: Dave: Anson: Dave: Anson: Dave: Ryan: Dave: Ryan: Dave: Anson: James: Anson: Dave: Ryan: Dave: Ryan: James: Ryan: Dave: Anson: Dave: Anson: Dave: Anson: Ryan: James: Ryan: Dave: Anson: Dave: Anson: Dave: James: Dave: James: Ryan: James: Dave: James: Dave: Ryan: Dave: Ryan: Dave: Ryan: Dave: James: Ryan: James: Dave: Ryan: Dave: Ryan: Dave: Ryan: Dave: Ryan: Dave: Ryan: Dave: James: Dave: Ryan: Dave: Anson: Dave: Anson: Dave: Anson: Dave: Anson: Dave: Anson: James: Anson: James: Dave: Anson: James: Dave: James: Dave: Anson: Dave: Ryan: Dave: James: Dave: Ryan: Anson: Dave: \u00a0<\/p>\n<\/div>\n Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here<\/a>. Thanks! We really appreciate it!<\/p>\n Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Email <\/em>[email\u00a0protected]<\/span><\/em><\/a>.<\/em><\/p>\n Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n
Welcome to On the Market. I\u2019m your host, Dave Meyer, joined by the birthday boy, James Dainard, turning 40 years old today, in podcasting anyway. Thank you for joining us on your birthday.<\/p>\n
You know what? I wouldn\u2019t rather be anywhere else.<\/p>\n
I think you\u2019re lying, but I appreciate you saying that anyway. But how are you feeling? How does it feel to be 40?<\/p>\n
You know what? I\u2019m actually feeling pretty sore, and I don\u2019t think it\u2019s the 40, it\u2019s just because I had a little, I need to workout and just get after it this week. And I\u2019ve definitely overdone it.<\/p>\n
I mean, you have more energy than most people I\u2019ve ever met, so I don\u2019t think 40 is slowing you down at all.<\/p>\n
No, not going to let it do a thing. Just keep growing.<\/p>\n
Well, James, we have an awesome show today. We brought in a couple of realtors. We have Ryan Blackstone from Northwest Arkansas, friend and partner of Henry\u2019s, and Anson Young, one of the original BiggerPockets authors, and someone I\u2019ve known for a long time, coming to talk about what they\u2019re learning being an agent in two pretty different markets. As an agent yourself, what did you learn from this conversation or what do you think listeners should be on the lookout for?<\/p>\n
I think the biggest thing is to not just look at each market as one, but really just look at what is working in each market. Look at price points. The rates have spooked people, they\u2019re kind of locking up and they think they need to look elsewhere. But the common message was, no, just break it down by price points and see where the opportunities are. And transactions can keep going on in any type of market.<\/p>\n
Awesome. Great. Couldn\u2019t agree more. So we\u2019re going to take a quick break of course, but then we\u2019ll be back with Anson, Ryan and, of course, myself and James. Today for our realtor panel, we are of course joined by James Dainard, our resident realtor on the show. James, what\u2019s going on, man?<\/p>\n
Oh, just enjoying the big day, number 4-0.<\/p>\n
Yeah, happy birthday. I was thinking about making these other guys sing to you, but I think that would be too embarrassing. But we\u2019ll just tell you happy birthday.<\/p>\n
Only if it\u2019s the Red Robin version, that\u2019s the only one I want.<\/p>\n
I don\u2019t know the Red Robin version.<\/p>\n
You don\u2019t know the Red Robin birthday song?<\/p>\n
No. I know you were a Red Robin employee of the year. Can you sing it?<\/p>\n
Why don\u2019t we save that for BP Con?<\/p>\n
All right, afterwards. Well, we also have other great real estate agents with us. BiggerPockets OG, Anson Young. Anson, what\u2019s up, man?<\/p>\n
Hey, Dave. How\u2019s it going, man?<\/p>\n
Good. Good to have you on the show. So Anson, for those people who don\u2019t know you, can you just tell us a little bit about yourself?<\/p>\n
Of course. I\u2019ve been investing and had my license since 2006-ish. And I mainly do residential single family real estate here in Denver, Colorado. I was briefly licensed in Arizona when we were doing some REO, so I have experience on the agent side with REO, short sales, just regular retail real estate. And then also do a lot of house hackers lately, seems to be a big market segment. But I\u2019m also a BiggerPockets author, a book called Finding and Funding Great Deals. And yeah, enjoying life out here in Denver.<\/p>\n
And we also have Ryan Blackstone. Ryan, is this your second time on the show, third time?<\/p>\n
Second time, yeah.<\/p>\n
All right. Well, welcome back. For those who didn\u2019t listen to your first episode, can you just introduce yourself please?<\/p>\n
Yeah, thanks for having me on. Ryan Blackstone, we\u2019re in Northwest Arkansas. And we do residential, small multi, storage units and large multifamily. So, have fun on that.<\/p>\n
Nice, that\u2019s great. Anson, let\u2019s start with you, curious just a little bit about the Denver market. This is selfish because I still own property there. What\u2019s happening in Denver?<\/p>\n
Yeah, man. Denver is nice because it acts like the coasts. And so when trouble comes around, we typically can weather the storm a lot better than the Sun Belt and the Southeast and areas like that, Rust Belt for sure. So yeah, looking at all the stats and everything, it\u2019s still a seller\u2019s market. It\u2019s not strong, strong, but it\u2019s still sellers market. Prices are still up year over year from this time last year. We only have six weeks of inventory, and inventory basically cures all problems, it feels like. As long as you have low inventory, it feels like things chug along no matter what. And yeah, we had a little bit of a dip in the beginning of the year, probably due to interest rates and other things. But yeah, this summer has been chugging along. And our days on market\u2019s lower, and our prices are up even though we still have some price reductions and stuff. But overall, it still feels pretty normal and pretty the same stuff we\u2019ve seen for the last three years. Inventory\u2019s low, things are still selling and yeah, overall good.<\/p>\n
Anson, Denver\u2019s market, I think it is funny, I\u2019ve been tracking the market because it\u2019s very similar to Seattle\u2019s. We\u2019ve been seeing the same kind of trend where it kind of came down, it bounced back up. Are you seeing the seesaw market, though, that we\u2019re seeing, like every two weeks it goes up and then it comes back down? It\u2019s like this constant up and down. And not big swings, but more just transactions wise. Are you seeing that in your guys\u2019 local market right now?<\/p>\n
I don\u2019t know about every two weeks. I think that\u2019d be kind of hard to track. But I think it definitely does this weird thing. Obviously we\u2019re seasonal, I\u2019m sure Seattle is seasonal as well. Winter time\u2019s a little slower than summer and all that. I think overall it\u2019s been pretty strong. But there are fluctuations for sure where it feels like there\u2019s less listings in the last couple of weeks, and then it\u2019ll pop and then it\u2019ll go back down. So yeah, for sure.<\/p>\n
What about you, Ryan? And just so everyone knows, Ryan and Henry Washington, who you all know, work together. But from what we hear from Henry, everything\u2019s always perfect in Northwest Arkansas, and it\u2019s just a magical place where real estate works all the time. Is that what you see as well?<\/p>\n
Yeah, I think it\u2019s the same thing that Henry\u2019s been saying. So you guys need to invest here. But for real, I think for us it\u2019s the same as what Anson was saying. It feels like we were climbing this mountain. And then when we got to the peak, which was like third quarter, fourth quarter, we kind of just have been on this plateau. It\u2019s not going up. I mean, it\u2019s going up slightly, it\u2019s not going down. We\u2019re just plateaued in some regard. The big change from 2022 to 2023 is seasonality came back. So typically, Q4, Q1 operates 20% less than Q2 and Q3. And so we have seen that, but that\u2019s just signs of a normal, healthy market.<\/p>\n
And are all asset classes, all price ranges following the same pattern?<\/p>\n
That\u2019s a good question. No, that is not true. Small multifamily is just going nuts. I would say small multifamily is way harder than just normal single family residential. And that\u2019s partly because, with the higher interest rates, a bigger buyer pool now is people who are wanting to house hack, where they buy a duplex, live in one side and rent out the other side. So now, small multifamily just runs and operates on retail market prices instead of any kind of cashflow price, from what we are seeing.
The other interesting thing for us is our rent rates are still double digits, like 18% increase in rents. And what I\u2019ve heard or learned is we are so deregulated on our rent rates that, honestly, we don\u2019t increase our rents because we don\u2019t have to. If I needed to, to sell a property, I can double my rent rate and there\u2019s no problem. Whereas, I heard in other big metropolitan areas where it\u2019s highly regulated, you kind of have to keep rent increases, otherwise you miss out. And then office space I would say may be struggling, we\u2019re not really filling that. But warehouse space, storage space is skyrocketing still. So that\u2019s what we\u2019re feeling.<\/p>\n
So Henry\u2019s not painting a picture, Dave. It really is just a magical real estate bubble. Ryan, on these small multi-families, that actually kind of caught me a little bit by surprise, because I know the multifamily market has slowed down because our investor rates are terrible, it\u2019s hard to cashflow deals. And you mentioned that now, and those investors were acquiring all these properties for two, three years, you couldn\u2019t really get them as a house hack, owner occupied. And I know Anson also mentioned the same thing with the house hacking. Are you guys seeing that more in your local market where the affordability as people are just going to a new strategy to buy, they\u2019re essentially paying for the rate increase and, by renting out, subsidizing their mortgage and then going towards the multifamily. Is that majority of the transactions going on, and where people are really focused on to get their monthly cost down?<\/p>\n
What I\u2019m seeing as far as buyers in the market, period, is you need to either have cash or cash equivalent. And if you\u2019re needing to be in specific locations, you are looking to house hack and you\u2019re totally cool with that, right? Or it\u2019s like, how can I live in this or sustain in this property for the next five or 10 years? They don\u2019t think they\u2019re going to rotate out in a quick timeframe. And so the way to get your payments down, because the interest rates are high, is to offset with rentals.
Now, like Anson was saying, the biggest problem is still supply. We have 10 to 12 new households move in to Northwest Arkansas each day, and we aren\u2019t even coming close to building that much. And in fact, builder permits have dropped even more. So again, yes, it\u2019s harder for buyers and maybe the amount of buyer pool has dropped, but so has the seller pool and listings and new builds. And with multifamily, there\u2019s not much multifamily being built. So I\u2019m not seeing a ton of multifamily transactions. I\u2019d probably see more if there was more supply. There\u2019s just not enough supply out there. And the only big multifamily that is being built is a hundred plus apartment complexes.<\/p>\n
So Anson, everything\u2019s perfect in Denver too, right?<\/p>\n
Oh yeah, for sure.<\/p>\n
Everything cash flows. You just throw a dart at a dartboard?<\/p>\n
That\u2019s how I invest. I need that astrologer\u2019s phone number. No. So kind of like Ryan was saying, I would say the majority of our transactions are just basic mom and pop, need to move before school starts, just pretty typical transactions. The house hacking pool are people who either want to get into investing but they want to stay local. So this is kind of the only way that they can do it in Denver. They\u2019re not going to buy a duplex over in Edgewater or something and then spend $600,000 to do that and not really cashflow. They\u2019re looking at that value play of house hacking their own property.
So yeah, I would say the majority of our transactions are pretty normal, conventional loans, all of that. And so there\u2019s different market segments doing different things. But when your median house prices are like $600,000 or $700,000 and that\u2019s kind of just your average price these days, people still need to move. Kind of like Ryan said, we have a lot of influx of new people, something like 50,000 a year coming to Denver, and we don\u2019t have anywhere near that many units being built or inventory. I think we have like 5,000 that get listed every month and then 4,997 of them sell. So it\u2019s like, we\u2019re super low inventory and it causes a bunch of crunches in a bunch of different areas.<\/p>\n
Are you seeing any sort of, Anson, concessions anymore? I feel like last year we were seeing a lot of concessions. Is that still happening?<\/p>\n
It is a little bit. We\u2019re not in that seller holds all the cards. They hold most of the cards, but not all of them. So they know that they have to budge a little bit here and there. There are, I think, your kind of below median house price homes in a good school district, the seller holds all the cards. It is going to list, it\u2019s going to be gone in four days, there\u2019s going to be multiple offers. There\u2019s no reason to give any concessions.
In the condo market, and then also in that normal median house price, for some reason, is the one that\u2019s a little bit slower right now. In those two markets, there\u2019s going to be a little bit more concessions given than just that all day long below median house price houses that just fly off the shelf. So not a ton, and definitely not as many as the winter time, but they\u2019re still definitely happening. I just had a listing where we had to give up 5,000 on concessions on a condo, but that\u2019s pretty normal because condos aren\u2019t selling nearly as quick, and way less showings and all of that. So just depends.<\/p>\n
Yeah. What we see in our market for concessions is it is coming back. But what\u2019s very interesting to me is right now if you took the city and you made it a bull\u2019s eye, there was a lot of new build new construction on the ancillary markets, the outside rim. And the new builders are offering 10% in concessions. So they\u2019re trying to pay closing costs, pay down points, offer upgrades because what happened is when everyone could work remote, they\u2019re like, okay, it doesn\u2019t matter where I live, I\u2019ll go more outside of town. I love the country, heehaw. And then what happened was those prices went up, but now it\u2019s unaffordable because now, you need to come back into work. So the amount you have to pay for gas and living far away has changed. Now, new build in the city is still going crazy and there\u2019s no concessions there.<\/p>\n
You guys made a couple really good points. And as investors, we\u2019re always tracking markets and cities and going, \u201cThis market\u2019s doing really well.\u201d But as you\u2019re investing in today\u2019s market with that high cost of capital, with a little bit riskier market that\u2019s going on right now, you have to micro cut them down. And that\u2019s what we\u2019re having to do in Seattle too, is the upper echelon, the luxury pricing has compressed about 10%, and they\u2019re still having to offer concessions because it is just expensive, and the amount of people that can afford those higher end markets. I know, Anson, we have very similar median home pricing. The luxury new constructions are like 3 million to 5 million in our market, that\u2019s not trading at all.
But then your core, right around median home price homes, if they\u2019re in a nice neighborhood, that are cleaned up nice, people are buying those and they\u2019re selling for over list. The two asset classes that we\u2019re seeing the most amount of deflation in, and concessions, are either the super high-end luxury or the massive fixers. Those are getting discounted dramatically too. But the rest of the market\u2019s kind of just chugging along. People are going, Hey, we need the housing. They don\u2019t have a choice at this point. They need the home. They want to get into a property. They have to make it pencil.
And I know in our local market, builders are the ones offering the concessions, not the flippers. The flippers are still moving their deals. The new construction guys are still getting lined up with buying their rates down, they\u2019re getting preferred lenders and that\u2019s helping move product. But that\u2019s where we\u2019re seeing this jolt back and forth on the uber expensive. The inventory\u2019s above, if you\u2019re double the median home price, it is sitting big time. But otherwise everything else is kind of moving forward.<\/p>\n
Yeah, I would agree with that wholeheartedly. Flippers, they\u2019re not giving concessions. And I think the big thing is, what everyone\u2019s saying is, if it\u2019s fresh and clean and doesn\u2019t need repairs, the buyer\u2019s taking it. The thing that makes it hard for that buyer is like, oh crap, it\u2019s expensive and I have to worry about these things breaking or these things fixing as soon as I get in.
And honestly, the number one buyers that we\u2019re really seeing is either cash or cash equivalent buyers, meaning that they already bought that first time home and then they\u2019re upgrading up. So our average sell price is like 425 right now. If you\u2019re at 425 or just a little bit higher, that buyer has a little bit more discretionary income so they can make it happen. But then we\u2019re also seeing cash coming in from family members like grandparents to help the person buy the first home, or their 401K, they\u2019re cashing out the 401K to then buy a house as well. So it\u2019s keeping the prices up. I don\u2019t really see that they\u2019re putting like 25%, 35% down, but more getting to that 20%, let\u2019s get rid of PMI, let\u2019s get rid of FHA, VA loans and do conventional still.<\/p>\n
So this great is conversation about the market in general. I want to switch gears a little bit about what investors should do in your relative types of markets. So Anson, if I were a new investor moving to Denver, what would you recommend as a strategy?<\/p>\n
Yeah, in these high cost of living markets, you have somewhat limited options. You can\u2019t do the crazy cashflow plays in the Midwest or anything like that. The things that I\u2019m seeing and the things that I would do, house hack if you can. I think it\u2019s still a great strategy here. There\u2019s still a lot of upside and a lot of opportunities there, whether it\u2019s like an up, down house where the basement\u2019s split off or you split it off yourself, side-by-side duplex, there\u2019s room by room. ADUs, we\u2019ve opened up a lot of ADU zoning here in Denver. So accessory dwelling unit, you could build a carriage house or a garage with a two bedroom apartment over it. Those are all value add plays that make sense.
And if you\u2019re not into house hacking and sharing your space, there are ways to maximize your cashflow here, which midterm rentals, short-term rentals and room by room rentals always underwrite your deal with long-term cashflow as your last resort. But we do have a lot of opportunities in certain areas for short-term. There\u2019s restrictions of course in Denver, Aurora, Boulder, kind of the big areas. But there are little pockets where you can still buy for short-term rentals, and there\u2019s no regulations. So I would keep an eye out for that.
Midterm. We have a lot of hospital complexes, really strong healthcare center for job centers here. That\u2019s a great way to maximize your cashflow. And since it is not very affordable to live here, a lot of young professionals are opting for a room by room type arrangement where they can be in a five bedroom house, rent one of the bedrooms, and the common areas are furnished and they are saving half as much on their rent. You can go get a one bedroom for 2,000 a month, or you can rent a room in a nice house for 1,200 a month. Most of those young professionals would take that other option. And so those rentals are doing really well.
There\u2019s even management companies that are springing up around just room by room management companies. And so there\u2019s ways to do that that I think make a lot of sense when you can maximize your cash flow, because you can\u2019t change your interest rate. And if you\u2019re good at finding deals, you can do that. But if you\u2019re just kind of a normal investor and you take what you can get from wholesale market or on the market, then working on maximizing your cashflow would be the way to go. So that\u2019s what I would do.<\/p>\n
Yeah. Those are great ideas. Rent with the room, I\u2019m always curious about this. Do you have any concept of how much more cashflow it could generate?<\/p>\n
So on a five bedroom, six bedroom house just north of Denver, in kind of like Westminster area, there\u2019s some really good areas there where this makes sense. It\u2019s close to Boulder, close to Denver, just down the road from the airport on the highway. So an area like that, a five bedroom single family, if you just rent it long-term, probably rents for 3,000, 3,200, somewhere around there. That\u2019s probably the max that you\u2019re going to get. Whereas room by room, obviously if it\u2019s decent, the common areas are nice, it\u2019s been upgraded somehow in some way, you can easily get 1,200 per bedroom. And so you\u2019re talking 1,200 times five versus the 3,200 a month. So there\u2019s almost, it\u2019s not quite 2X, but there\u2019s a significant boost in that income that makes it worthwhile for sure.<\/p>\n
Wow. That is very significant.<\/p>\n
I have found the same, that renting by the room will get you a lot more money for your property, but it also brings you a lot more problems, at least I\u2019ve dealt with. I remember last year I got a call. I had brought a property up for rent for 3,500 bucks. And this group of five approached me and said, \u201cHey, we\u2019ll pay you by the room. Can we do this?\u201d And I was like, \u201cAs long as it\u2019s on one master lease, I\u2019m not doing individual leases.\u201d And I was a little worried about it, but the cashflow was so much better. And then sure enough, 90 days later I get messages from all these tenants, like, \u201cThe fifth tenant is walking around naked all the time.\u201d And I\u2019m like, \u201cThis is not my problem. You guys redid one master lease. If you want to remove them, that\u2019s fine.\u201d But it is a great way to get into the market. And it comes down to, as an investor, sometimes you\u2019ve got to deal with some grief to get into the game.<\/p>\n
Oh, totally. Yeah.<\/p>\n
When we were flipping in 2008, it wasn\u2019t easy to get in, but we had to do what we had to do. And so it comes with the problems, but sometimes it comes with what the scenario is.<\/p>\n
So is the suggestion to buy in Denver, house hack it and be okay with that naked man for a year and then we\u2019ll be golden? That\u2019s awesome.<\/p>\n
Yes, yes. That\u2019s the strategy.<\/p>\n
No, but I agree with that general sentiment, James, it is so true that it\u2019s not 2010. You can\u2019t just buy anything and make it easy. That doesn\u2019t mean there\u2019s no options, but you\u2019re going to have to do a little bit of work, whether it\u2019s doing a reno, a value add, that\u2019s work, in the same way that\u2019s additional headache, in the same way that rent by the room is an additional headache. But we talk about this all the time, real estate is not really a passive business except in some extreme circumstances like syndications. But really, it\u2019s just entrepreneurship, and you just got to pick the business that you want to run. And this is an option to build a higher cash flowing business, but it is more operationally complex.<\/p>\n
And treat it as a bridge. When you\u2019re looking at a property, if you have to rent it by the room, that\u2019s going to give you high income or cash flow it, but then see how long you\u2019re going to have to do that. If you do think rates are going to fall over the next 12 to 24 months, you can plug that new rate in. That\u2019s what we\u2019ve been doing, is plugging the 6% rate in two years. And then we\u2019re going, okay, cashflow is good here. So it\u2019s almost just bridging you through. And the good thing is right now you can get some good discounts on property where you can get the equity, you can get the cashflow to cover, and then once rates fall, you can go back to a traditional rental and get rid of the headache. And so don\u2019t always worry about the now. It\u2019s that short-term pain, long-term gain. You just kind of got to grind it through at this point.<\/p>\n
All right. Ryan, what about you in Northwest Arkansas? What would you recommend for investors if they were new to the area and they wanted to get into the market? Best possible options for them?<\/p>\n
So I always say the number one winner is always, if you\u2019re going to be proactive in finding your own off-market deals, that\u2019s surefire number one. House hacking is great as well. And I would just make a preface, I have a good buddy, Conrad Eberhard, shout out to him, he\u2019s a lender. He was just telling me that buyers, there\u2019s so much fear in the market right now, and so that\u2019s reflecting in the interest rate. And then if interest rates go down to 5.5%, it\u2019s like a trigger rate. And so what will end up happening is everything will go gangbusters again and prices will start soaring. And so if that is happening, then anything buying right now is still good, even though it\u2019s hard. I would still say it\u2019s good to buy.
My big thing is, as long as you can make the payments and then you don\u2019t have to sell, then you\u2019re never losing in real estate. So yeah, I would say off market. I would say house hacking. And then midterm is great. We still have not much regulation on any short-term rentals. And then flipping or building still is great. But when you\u2019re not whole-tailing, you\u2019re flipping it. You\u2019re making it amazing.<\/p>\n
Nice. Have margins changed at all over the last couple of years?<\/p>\n
Yeah. I mean, Henry has to do work to make 75,000 now per flip.<\/p>\n
Poor guy.<\/p>\n
I know. I can\u2019t just list it and be like, \u201cHey, that critter comes with the house. They got a lease on it.\u201d<\/p>\n
That\u2019s why we\u2019re giving him the day off. He\u2019s at the spa just relaxing.<\/p>\n
But that\u2019s a good point. If you want to put in the work, the margins are there. It\u2019s like, go after the ones that you have to put in work, and the margins have doubled, at least what we\u2019ve seen across the West Coast. But Ryan said, you got to put in the work. This is a full on business, you\u2019re not going to get lucky with the rates anymore.<\/p>\n
It\u2019s interesting. Typically, I would say our smaller market, which I still think we\u2019re a big market, but whatever. You guys are like a crystal ball, which is great for me. So whenever I see the bigger markets take a dip or go up or whatever, I\u2019m like, okay, that\u2019s what I get to look forward to in six months. Yay. But it\u2019s weird. It\u2019s kind of still the same, right? That\u2019s what I\u2019m hearing, right?<\/p>\n
Yeah. I think so. At least that\u2019s what we\u2019re seeing on a national level in most of these big markets.<\/p>\n
So Ryan, I don\u2019t know, are you an investor yourself as well?<\/p>\n
Yes.<\/p>\n
Do you have any recent deals you can tell us about?<\/p>\n
I\u2019m honestly putting too much money into our office renovation, and that\u2019s still going and struggle busting. But we just bought some storage unit facilities down in the capital of Arkansas, Little Rock. So that\u2019s been good. And then flipping a deal here or there. So my main focus has been growing my team on the sales side of things and taking care of that office.<\/p>\n
Yeah. How long have you been doing the office, just out of curiosity?<\/p>\n
Oh my goodness.<\/p>\n
You don\u2019t want to say?<\/p>\n
April of last year, I think I bought it, and just keep dumping money into it. So we did sell two storage unit facilities in Kansas City and got some money there to put into the office.<\/p>\n
Nice. Well, when James and I move to Northwest Arkansas, we\u2019ll lease some space from you.<\/p>\n
There you go. Yeah, it\u2019s a coworking space. Henry\u2019s there, I\u2019m there, other investors.<\/p>\n
Well, the whole On the Market team, it\u2019ll be great.<\/p>\n
Henry always puts a bow on that market. I\u2019m really interested in going to visit it.<\/p>\n
Yeah, it\u2019d be fun.<\/p>\n
I\u2019ll take you around. The only thing, James, is you have to fly to your boat. Sorry, man.<\/p>\n
What about you, Anson? What deals are you up to these days?<\/p>\n
Yeah, so for the past year and a half, two years, I\u2019ve been focused mainly out of state. The grass is somewhat greener in some respects. I think competition really kind of drove me a little bit outside of Denver to go into the Midwest. And so our deals, what they look like now is BRRRR deals in Ohio and Nebraska. And then also we\u2019ll wholesale or we\u2019ll flip deals that just don\u2019t meet our criteria, mainly wholesale them just to recoup some marketing money and go back at it. But that\u2019s been my main focus, is cashflow. And so, finally getting on the smart bus and going that route.<\/p>\n
Well, yeah. Is it just a balance? Do you still own properties in Denver?<\/p>\n
I haven\u2019t been much of a buy and hold investor here. I\u2019ve been mainly just wholesaling and flipping in Denver my whole career.<\/p>\n
Okay. Yeah.<\/p>\n
So I don\u2019t really have much here. Everything is out of state these days.<\/p>\n
But yeah, I guess you\u2019re still kind of achieving that balance. You get your hits of income in Denver from flipping or wholesaling with your agent business?<\/p>\n
Agent stuff. Yep, exactly.<\/p>\n
And then getting the passive stuff externally. Yeah, makes sense.<\/p>\n
Exactly. Yeah.<\/p>\n
Yeah. Anson, have you switched the markets in the Midwest? So as you\u2019re starting buying in other markets or you keep your rentals, with the rates changing, have you switched all that up and forecast in? Buying rentals in different states, I\u2019m more of a backyard investor, but it\u2019s always been interesting, but it\u2019s hard, right? You got to renovate them, you got to target the right market. Are you buying in different markets now than you were 18 months ago because of just rates and the cashflow positions?<\/p>\n
No. Because once you\u2019ve kind of built up teams and marketing and everything else and kind of pushed that snowball downhill, there would have to be something more catastrophic than just a couple of points in a rate increase to have to shift that hard, to take a huge right turn into a different market. So we\u2019re still in the same exact markets that we were, we\u2019re investing in the people on the ground and the market itself and still making it work through trying to buy as low as possible, trying to maximize the cashflow on the other end. And like you said, James, if the interest rate comes down to six in two years, then we\u2019re golden for that. And in the meantime, we can still pencil deals now. And so we\u2019re just focused on that. And so we haven\u2019t had to shift too hard. We\u2019ve probably pulled back in expanding into a couple of markets. But in hindsight, we probably should have just gone full bore into one or two other markets as well.<\/p>\n
Arkansas.<\/p>\n
Arkansas.<\/p>\n
I don\u2019t know. Between James and Dave, it\u2019s too much competition there.<\/p>\n
Nah.<\/p>\n
No. We\u2019re going to all do it together.<\/p>\n
Yeah, and I love that because what Anson just said is he built good systems over the last three to five years in different markets. And no matter what\u2019s going on, you\u2019re still buying the same type of deal flow. You\u2019re just kind of adjusting your mindset behind that. I know in Seattle we\u2019ve had to do the same thing. It\u2019s like, we don\u2019t really care what\u2019s going on, we\u2019re just buying. We\u2019re going to be always be buying. And you just have to tweak your systems. And if you have that set up correctly, you just have to more tweak it rather than rebuild. And for us, we\u2019ve been buying a lot of value add and getting a lot bigger deals done because that\u2019s just what\u2019s available right now. And as long as you have those good systems, you can make your pivots. And every market still has an opportunity. It doesn\u2019t need to be an affordable market. It can be an expensive market, they all have opportunities. You just got to switch on how you\u2019re looking at them right now.<\/p>\n
That\u2019s a good way to wrap it up, James. I think you just put a bow on this entire episode. So let\u2019s get out of here. Anson, for people who want to learn more about you, obviously they have your book. You can find it in the BiggerPockets bookstore, which is biggerpockets.com\/store. Where else can people interact with you, get to know more about you?<\/p>\n
If you want to connect with me on BiggerPockets, just search my name there, I\u2019ll pop up. On Instagram, @younganson. And that\u2019s me.<\/p>\n
All right. And Ryan, what about you?<\/p>\n
Yeah, same. BiggerPockets, you can find me there, just type in my name. Or YouTube, we got a channel called Blackstone and Co. We\u2019re starting to throw stuff on there. And then Instagram, I\u2019m not on as much, but @ryan.blackstone12.<\/p>\n
All right, great. James, what about you?<\/p>\n
Probably the easiest place is Instagram @jdainflips or check me out on Jamesdainard.com.<\/p>\n
All right. And I am always on BiggerPockets, or you can find me on Instagram where I\u2019m @thedatadeli. Anson and Ryan, thank you both so much for being here. Really appreciate it. Hopefully we will have you back on sometime. Tell us how your markets are shifting in a couple of months from now.<\/p>\n
Sounds perfect.<\/p>\n
Love it. Thank you.<\/p>\n
On the Market is created by me, Dave Meyer and Kailyn Bennett, produced by Kailyn Bennett, editing by Joel Esparza and Onyx Media, Research by Puja Gendal, copywriting by Nate Weintraub. And a very special thanks to the entire BiggerPockets team. The content on the show On the Market are opinions only. All listeners should independently verify data points, opinions, and investment strategies.<\/p>\n