2026 Real Estate Market Updates, What You Need To Know!

What's up everybody? Welcome back to the New and Experienced Investor Podcast. Today it's just the two of us. It's gonna be pretty exciting.

Just the two of us.

I'm one of your hosts. I'm Alex Barnett. I'm the new guy.

Joe Homs, the experienced guy. You know, there's a song, Just the Two of Us.

Yeah.

It's a cool song.

Make it if we try.

Okay.

Uh, yeah, today we're talking about 2026, the year, what it's going to look like coming up. Policies, changes, some of it here in SoCal, some of it nationwide. So it's going to be pretty exciting stuff, I would say.

Definitely. Yeah, I think it's going to be a really good year this year.

Oh yeah, that's what I keep hearing. Definitely need that because I got a little one on the way. So yeah, finally did it. My best deal yet. I talked Lauren into it after four years. She finally said yes. Let's see here. Okay, yeah. So one of the big news items over this last week was old Trumpy in Davos. And yeah, he had a lot to say. A lot of it about affordability in the housing market. So we're gonna go over some of that and let's— I want to see what, what you think. So one of the things he talked about was Trump doesn't want America to be a nation of renters, but experts say at least one of his proposals may put homeowners more out— homeownership more out of reach. They can't just give it to them.

Which one was that?

So this was— he was talking about how you could use your 401.

Oh. Okay.

Well, it showed it to me earlier. It's not showing it to me now. How you could use it for, uh, uh, your down payment.

Okay.

For your house.

Okay.

So experts are saying, you know, that could be not good for some people cuz they're, instead of having it in their savings account, then they're putting it into a house and then they go, yes, of course.

Hi—

uh, historically real estate always went up, but what about 2008?

Huh?

What if it— what if there's a major crash, then all that savings in your 401 is gone? So that's what they said.

Okay.

So what do you think about that policy?

I think it's a good policy. Anytime you can buy a home as a principal residence, I think it's a great policy.

So what's the rule right now with your 401? You can't use that?

I think you can. I think you can use a part, part of it. I mean, not all of it, but part of it. I don't know if he's expanding what is It's already allowed to be done. But, you know, and you hear what you just said a lot out there, because I don't know that everybody who's saying that knows what they're talking about.

It's usually the case.

Yeah. You know, homeownership is the bedrock of USA. It's just like, you know, that's right along there with mom and apple pie.

That's right.

Owning your own home.

Yeah.

You know, for example, mine, I bought mine 1980.

Right.

Paid $160,000 for it.

Yep.

You know, let's say I used my 401 money.

Yeah.

Okay. I didn't, 'cause there wasn't a 401 back then, but, you know, just, let's just say I did. Let's say, let's say, let's say I put the whole $160,000 from my 401 in there, you know, I've been in the same house for 45 years. It's worth $1.4, $1.5. Like, was that a bad investment?

I'd say that was good.

You know, that's through 2008, 1990s, you know, the dot-com stuff, all that stuff. Yeah, I mean, you know, real estate goes up and down, but I raised my family there. Now my grandchildren come back and visit and they're parents' bedrooms, believe it or not. That's kind of cool. Yeah. Um, so yeah, no, what, what, whatever he can put together to, you know, make sure that it's affordable for everybody, um, you know, and be able to get something started, I'm all for it. Yeah, I think it's a great idea.

I think it's a great idea. Yeah, he was at the, uh, it's the World Economic Forum, and, um, A lot of his talk—

That's where all the people have lots of money and stuff.

And so yeah, it's all the world leaders.

We don't want you to get any, so we're gonna say no.

Yeah, exactly. Because I think Karl Schwab, that was his famous thing, is like, basically you're gonna own nothing and you're gonna be happy.

Yeah, I think so.

Trump's going in there, he's saying, no, we want people to own, you know, at least their own home.

Yeah.

Because apparently, I think the last thing I saw was like The average new home buyer, the age went up to like in their 50s.

I think it was 40s.

40s?

Yeah.

Yeah.

So it used to be in their 20s at that. Yeah, it was. It was, which is, you know, pretty sad that that's the case. But it is where we are. And I would think, and I don't think, I know that people who own their own homes are a lot happier than renters.

Sure.

They've got to be.

Gotta be. I mean, unless, uh, you can't afford your own home, but then you're probably pretty sad.

Well, yeah, that's what I'm saying. You're a renter, you're sad.

Well, not renter. I'm saying if you own your own home and you can't make the payment at some point.

Oh, well, that's a different story. Yeah, that's a different story. You should probably never bought it to begin with. Yeah, yeah, that's, that's a whole different story.

Right. So kind of interesting. But yeah, it was what a lot of the topics was on that, including, um, Uh, this he had to say.

Homeownership has always been a symbol of health and vigor of American society, but that goal fell out of reach for millions and millions of people in the Biden era because interest rates went up so high. Today I'm taking action to bring back this bedrock of the American dream. In recent years, Wall Street giants and institutional investment firms— many of you are here, many of you are good friends of mine, many of you are supporters— sorry to do this, Joe, I'm so Sorry. But you've driven up housing prices by purchasing hundreds of thousands of single-family homes, and it's been a great investment for them, often as much as 10% of houses on the market. You know, the crazy thing is a person can't get depreciation on a house, but when a corporation buys it, they get depreciation. Okay, that's something we're going to have to think about too. I don't know if too many people think about that. You buy a corporation, they buy 500 houses. They buy hundreds of thousands. They buy 500 houses. They can take depreciation. A person sweats and works and buys one house. They can't. But homes are built for people, not for corporations. And America will not become a nation of renters. We're not going to do that. That's why I have signed an executive order banning large institutional investors from buying single-family homes. It's just not fair to the public. They're not They're not able to buy a house.

Totally agree.

Okay.

Yeah, totally agree.

Right.

You know, these, you know, Wall Street people have plenty of other places to invest their money. They don't need to pick on single-family residences and turn them into renters. And he's right. He says, you know, like, you can write it off. And if you're a homeowner, no, About the only thing you can write off is the interest payments and taxes.

Right.

But as an investment, and, you know, if you want to purchase a home and be an investor and rent it out, you can depreciate that home as well.

Well, yeah. And I've heard a lot of people kind of, I mean, they lump, they lump it together. So you got BlackRock and then you got like your normal mom and pop that maybe has 1 or 2 LLCs. And they're kind of like lumping them together, uh, people that don't know about the process, and they're saying, oh, so anyone with a corporation shouldn't be allowed to have a rental property and rent it out.

Yeah, but I think he's talking about, you know, BlackRock. I think he's talking about the big companies that own multiple ones, right? You know, he's not, he's not necessarily targeting mom-and-pops.

Yeah, no, I don't think, I don't think he is with that.

Yeah.

But it's interesting, and we're going to talk about this here in a second, was Warren Buffett dropped almost like a billion dollars into Lennar and D.R. Horton. And their whole thing is they're going to build single-family rentals and rent them out, whole subdivisions, which is interesting.

Mm-hmm.

But I guess that leaves the current inventory open to, you know, just, just regular people.

Yeah.

I mean, I saw it a ton when I was wholesaling where, you know, we put in an offer and all of a sudden like Opendoor or hedge funds were coming in and paying way more, overpaying for it. Um, and I don't know, I guess, I guess if you're just a normal retail buyer, you're getting outbid. By them as well.

Yeah. Well, they lost a lot of money. They lost a lot of money. A lot of them are out of that business right now. You know, the big boys, you know, the BlackRocks obviously survived, but they were just buying to rent it. These other companies like the Z word were buying them to flip them.

Right.

And sell them. And they're the ones that just— their algorithm wasn't working correctly. Imagine that.

Wow.

I mean, at the rate they were doing it, there was no way that they could actually look at the property and see if it made sense.

I don't think they were, you know. Yeah, they were just like, here, we'll give you this. Yeah, send us some pictures, or we'll have somebody go over and look at it. And, you know, when you have somebody That's not working for the company, that doesn't have a dollar interest in the property, uh, all they want is, you know, to get paid for that inspection or whatever. They're going to say, oh yeah, I took your pictures and stuff, it looks good to me, right? Like, I'm not an expert, but it looks good to me. Oh yeah, you know. Yeah.

And, and I mean, you think about those bigger companies, they're just using investors' money. So whoever's deciding that, it's not even their own money.

No, they don't, they don't care. They don't have a personal interest.

Yeah.

In the purchase at all, or the remodel or anything else that goes on with flipping.

Right. So yeah, that'll be interesting. I mean, from what I heard, BlackRock, big institutions, they don't even really own that many. Like, I mean, it's— I think it's below 10% of all single-family homes.

Yeah, he said 10%. I think it's even less than that, you know.

Yeah.

But hey, whatever percentage— I, I agree with him— whatever percentage it is, like Yes, stop. You know, no more. Yeah, let's see. Let's see what happens.

Yeah, yeah, let's see what happens.

Make more properties available.

I mean, he's—

he—

does it seem like he's just throwing stuff at the wall and seeing what sticks? Or, or, I mean, it's like it's turning this whole ship around after the last 4 years. Yeah, it's pretty tough.

So yeah, it is. I think he's got more up his sleeve. Now this is just basically a starting point because I know a lot of people were complaining about that, you know, the big hedge funds and, and stuff buying up properties. And like you said, it's— I'm thinking it's like 2 or 3%, but if it's up to 10%, then yeah, let's stop them and, you know, have these houses available when they start selling them to, you know, normal people that are going to go in and buy it and live in it.

Yeah.

So yeah.

Yeah, I wonder when that's— when all this is going to start, but he's at least announcing it. Um, okay, next, and then we'll, we'll jump out of the whole Davos sphere. But, uh, he gave an update on the new Fed.

Finally, I've instructed government-backed institutions to purchase up to $200 billion in mortgage bonds to bring down interest rates. And I'll be announcing a new Fed chairman in the not-too-distant future. I think he'll do a very good job. See, I gave away some of it.

He Yeah. In a better way.

So we have something.

We have something.

But somebody that's very respected. They're all respected. They're all great. Everyone that I interviewed is great. Everyone could do, I think, a fantastic job. Problem is, they change once they get the job. They do. You know, they're saying everything I want to hear, and then they get the job. They're locked in for 6 years. They get the job, and all of a sudden, let's raise rates a little bit. I call them, sir, we'd rather not talk about this. It's amazing how people change once they have the job. It's too bad. Sort of disloyalty, but they got to do what they think is right. We have a terrible Chairman right now, Jerome Too Late Powell. He's always too late.

Too late.

And he's very late with interest rates, except before the election. He was just fine for the other side. So we're going to have somebody that's great. And we hope he does the right job.

Yeah, I mean, this has been the talk of the town, is these interest rates.

Yeah, and yeah, and I agree with him. I think definitely— I mean, I'm predicting the interest rates are going to be down, and this is very aggressive, down to 5% by the end of the year. Uh, obviously we're waiting for too late to leave. Once he leaves, I think you'll see a lot of things changing at the Fed. Definitely. And if they lower interest rates, that saves the US on paying a higher interest rate on the debt that we owe.

Right.

$38 trillion, I think it's up to. It's like, that's going to save us money on there as well. So there's more than a housing incentive when it comes to lowering interest rates. A lot more.

Right. And then what was the thing he's— the mortgage-backed securities, what do you know anything about that?

Yeah, that's, you know, just kind of supply and demand. And, you know, if they take, you know, the supply out, then, you know, that means there's not a lot of demand. So hopefully they'll lower interest rates for that reason. But I think honestly, that's just, you know, really kind of a dent in the bucket. It's not a lot you can do, right? But it shows that he's moving in, in a direction that maybe a little bit here, a little bit there, and a little bit there will actually, you know, take and impact everything, right, all at once.

Right. And, and something we've talked about was, you know, that as soon as the interest rates come down, I mean, prices They're gonna go up.

Yes.

So if you can buy something now, yes, before that happens, well, you can hold on to it.

That's my suggestion. You buy something now, hold on to it for a year or 2. When the interest rates are down, just refinance it at that point. And then you've gotten the lower rate of the home that you purchased because, yes, you're right, it's supply and demand. If the interest rates go down and then everybody jumps back in to buy something and you're bidding against, you know, 5 or 6 other people, The property value is going to go up, right? Yeah. So, uh, listen to Alex. This is a good time to jump in.

Yeah, yeah, I've been saying that for a while, but you know, it just depends. It's that, that payment actually is, it's pretty substantial if you're paying 7% rather than the 5%.

I think it's down, it's like a little bit over 6, 6.25% right now. It was at 7, 7.5%, but it's gone down 1% since he got in. So, and I was hoping it— again, I was hoping it was down to 5% last year, but, uh, too late, it's still there.

Well, and I saw, um, somebody posted that we've reached a threshold, or we crossed this threshold where more people have 6% interest rates than like 2% or 3% or something.

Oh, so that's possible.

Yeah, so now that's kind of like unlocking Certain things.

Yeah.

So, because that was, that was the biggest thing that was kind of stagnant was people were sitting on these 3%, and it's, you know, makes sense that they didn't want to sell.

Yeah.

But we gotta get the market moving. Um, okay, so yeah, jumping over to something else is old Buffy, as I like to call him. Um, He is making a billion-dollar bet on America's housing future. So he's placed a near— nearly $1 billion bet on 2 of America's most controversial home builders, companies often criticized for building what some call disposable houses. While much of the market worries about a housing crash, Berkshire Hathaway quietly accumulated $800 million Lennar stock and $191 million in D.R. Horton during the first half of 2025. So this is what, what I'm talking about. I mean, Trump's at— in Davos talking to the World Economic Forum saying we want people to be homeowners, and then Warren Buffett's out here funding the 2 of the biggest home builders that apparently build crap houses. To rent to people. So, it's gonna be interesting, the, you know, the 2 things happening at the same time.

Yeah. You know, Wern's on his way out.

Yeah. Yeah. I saw he just, he gave someone else the reins or something.

Yeah. Yeah. And I don't know if they're gonna count this as his last, you know, trade or not. But you live on your last trade. If it's a good trade, then fine. And, you know, your reputation's intact. If it's not, then It's not.

Right.

You know?

Right.

And so I don't know that— obviously, he wasn't in the loop with the president, because I think the president's gonna stop this. They're gonna change this. They're gonna say, you know, you can't sell to corporate people. In fact, that's the new law. It's his new law.

Right.

So I don't know that at the end of the day, this is going to be, I think, the home run that he was looking for. It's just, you know, it's just gonna be a regular You know, um, first, first base hit, right? Not the home run that he was looking for, right?

I mean, and, and maybe he's just looking at the numbers. Like it says here, mortgage rates remain stuck at 6.5%. That could change. Median home prices hit $435,000. First-time home, uh, buyers make up just 24% of the market, the lowest since 1981. And that was probably just an interest rate thing as well, 1981. So a lot of people were sitting on the sidelines. It's funny how these things just repeat.

Yeah.

So he's banking on people just wanting to be renters, but they don't want to live in apartment buildings. So, you know, if you can get a house that you don't have to do the maintenance on—

1981, I bought my house 1980. The interest rate that I paid was 14%.

Good Lord.

Yeah, 14%.

It's mobile home rates.

14%.

Wow.

Yes, 14%. So yes.

Um, it says builders are quietly pivoting. Um, D.R. Horton has built more than 14,000 rental homes since 2019. Lennar partnered with Invitation Homes, which owns 80,000 rentals nationwide. So yeah, I wonder if he's gonna break up these guys.

Yeah, he's— that's not gonna happen with the new law that he put in place, you know. That's not going to happen.

Yeah.

I mean, these people are not going to lose money.

No, no, no.

But they're not going to make the home run, like I said, that they were looking to make.

I don't think so. Oh, here he is. Here's your boy.

Yeah.

As a result, the American dream is not disappearing. It is being destroyed by Wall Street and corporate greed. Oh, then there's your other guy, old Schwabie.

Yeah.

Um, subscription-based style of service. Yeah, so they just want everything on subscription-based. Um, kind of makes sense. But I mean, you know, in, in all these things that Trump is doing, I just get scared that in the next 4 years If somebody else gets in there, they're gonna literally on the first day go back and like undo everything, you know?

Yeah. Yeah.

That part sucks.

Yeah. Well, let's hope that that doesn't happen and vote Republican. All right.

All right.

You heard it here. You heard it here. That's the only way. Um, so I found an interesting article here on BiggerPockets. And kind of wanted to get your take. We've got controversial climate risk scores keep rising and it's a major dent on investor profits. And it's basically lenders and insurance companies are coming up with this score And, you know, it's obviously just making it almost impossible to have a long-term rental even out of state because insurance is just going through the roof everywhere.

Mm-hmm.

I mean, out here we have fires, everywhere else they have floods, hurricanes, and it's becoming increasingly hard for investors to Make a profit. What do we do about that?

I think this too shall pass, and the insurance companies are just basically greedy, you know. Do they have risk? Absolutely. I think a lot of that risk can be mitigated by the state and the local governments and stuff, and They're just not stepping up to the plate. So the insurance companies are saying, well, yeah, this is not working because you're not doing this, this, and this, so we're leaving. So again, supply and demand. And then the few that stay behind are looking at raising their insurance fees because that's also controlled in the state as well. You just can't raise it. It's almost like being a landlord and trying to raise rents. You know, all that's controlled by the government and even down to the local government as well.

Right.

Yeah. So.

Yeah. And it says here, okay, they're, they're, you know, they're gonna claim this is all science-backed and data-backed, but what if the data were flawed? It says in here, when we saw entire neighborhoods with a 50% probability of home flooding this year and a 99% probability of home flooding in the next 5 years, especially in areas that haven't flooded in the last 40 to 50 years, we grew very suspicious.

You know what else? Um, I'm sorry, but if you live in an area like that, why are they even allowing you to build something? I mean, throw a mobile home in there, I can understand. But, uh, if you've had— if you're like in Hurricane Alley, it's like you shouldn't be building in Hurricane Alley.

Yeah.

Okay. And you know, we've got the big one. California, we're all waiting for that earthquake, but we all know it. You know, it's not like every year, you know, Florida experiences hurricanes and a lot of other states experience stuff like that. It's like, hello, why why do you let them rebuild in you know places like that? That I don't understand.

I mean, they're well they're basically saying these these scores are based off of their. Models, their computer models.

Well, maybe that's what they're doing. Maybe they're saying, you know, 99% chance it's going to flood. We're kind of telling you that we're not going to insure it because it's going to flood in 5 years. So maybe you should think about building someplace else.

Yeah.

Moving someplace else.

Yeah. I mean, it just becomes, at some point, where do you go? You know?

There's a lot of land.

Oh, but where? If you want to live in Naples, like by the water.

In California, we have Barstow. Oh God.

Yeah, you go from Naples to Barstow. That's— yeah, that's a sad day.

Yeah. Oh, there's lots of places to live.

Yeah, but it's interesting.

We can't all live by the beach.

Well, I know, and that is a problem.

Okay, we cannot all live by the beach.

Luckily Did you see Bill Gates came out and basically said like climate change, like all that stuff is bullcrap?

Yeah, yeah, it's done.

Yeah, so you gotta know at this point it's all bullcrap. Yeah, um, just kind of press the, the little power button, but I gotta get it. I gotta get a new one.

Oh, there you go.

Yeah, so I— and I saw this on Zillow, or maybe it was Redfin or something, they have climate Scores.

All that's made up. 4 years ago. That's all that stuff from 4 years ago. It's all made up, you know.

They don't actually know. That's the thing. The, the— our local weather guy can't even get the rain right. They don't know about this stuff. It's all computer modeling.

I— and I saw the other day, I don't drive a gas car. I haven't for a long time, but I saw that the price of gas went from like $5.25 a gallon down to $4-something. We're in California, and that's a, that's a big deal.

That's a big deal, yeah.

You know, some places, uh, Trump was saying the other day it was $1.99. You know, let's all move there.

Yeah.

$1.99 a gallon.

$1.99. Oh, actually, one thing this just kind of reminds me, it's like, however, more than ever, people need a place to live. So take steps to ensure your properties can withstand the insurance storm that will rear its head if you invest in risk-prone areas. Take a short-term financial haircut for long-term gain. I mean, they're building the houses now, um, in Florida where the, the bottom level— yes, you can open it up and the water just goes right through it.

Yeah. Hello.

So, hello.

Oh, why didn't they do that before?

Hello.

It's gonna be Waterworld soon. Just floating. Yeah, barges and all that stuff. But, uh, yeah, it's kind of interesting. So, you know, any way they can kind of squeeze some more money out of you, but The insurance people had to pay out a couple times and now they're sad.

Yeah, you can't blame them. You know, they're into the, the business of making money like the rest of us, and right, you know, really can't blame them. But I think maybe that's what it is. I think they're telling people, it's like, don't build here, go someplace else. I know you like it here, but sorry, if you like it that much, insure yourself.

Yeah, yeah, maybe that's, maybe that's the answer.

Because, I mean, if we have the big one in California, we're all pretty much insured with, uh, the state insurance when it comes to earthquake, and it has a 10, 10, 10% deductible, I believe. Okay, around there. So do you actually think that that's going to pay out if we have the big one?

I know.

No.

Yeah, it's like apocalyptic. Yeah, it's like trying to collect on your claims.

Yeah, good luck.

I mean, look at what happened to Altadena and Pasadena. And I mean, people are still—

Malibu.

Yeah, they're in a battle. They're in a battle.

How many, how many houses have they built now?

Um, yeah, I don't know.

A lot.

I don't know. It's like, that's crazy.

And I think they had their permits before the fires is what I'm hearing.

Okay.

So they're like, no, we did issue some permits, but they had already started before the fires.

Nice.

That doesn't even count.

Nice.

But yeah, kind of interesting. So we have some new 2026 California rental laws. What landlords and tenants must know.

Did you know California's rental laws got a major overhaul in 2026? If you're a landlord or renter, these changes could affect your lease, your rights, and your wallet. And some of them are bigger than people realize. So today I'm breaking down exactly what's changing in California landlord-tenant law for Let's give it a channel. Do you know what it actually means for a rental unit to be considered habitable? Under AB 628, that definition is expanding in 2026. In addition to existing requirements like running water, heat, a pest-free unit, every residential unit in the state of California must now include a working stove and fridge.

That's new.

Yeah, that's new. And, and I went to a meeting the other day, the I believe he was CAR or maybe MLS. I don't know. One of the attorneys from there basically said this. And, but what he said that was interesting to me was that you only need to supply the refrigerator if they ask for it.

Ah.

Yeah. So if they, like, you know, his example was if they have their own, you know, that's like $5,000 that they love, they can use that one. You don't have to force them to use what, you know, Well, and you know, they're getting the landlord special, which is— Correct. Exactly.

Yeah.

Ice maker? Yeah. What's that? Yeah.

It's gonna be off of Craigslist.

Yeah.

No, I cleaned it out. It's fine.

Yeah, it's fine. It works. You know, if it doesn't work, call me back. You want ice?

You paint the inside.

You have to go to Ralph's and buy a bag of ice and bring it back home.

Or you get the little trays.

Or get the little trays. Oh my God, I forgot about those. Yeah, the little trays, the metal ones. Or they have the plastic ones. Yeah, I forgot.

Lauren and I had that for— in the studio in Seal Beach for a very long time, and then we got a real ice maker and it was unbelievable. It was life-changing.

Yeah.

So yeah, that's kind of interesting.

It's there, automatic, you know? Yeah.

And I don't know, it's probably fine, right? I, I don't like that they're making it a law, but there must be a lot of slumlords out there still.

Oh my God. I don't know. I can't imagine that. It's like, why, why are you throwing stove in there? Of course you have to have a stove.

Some people just do. I mean, when you look up studios, so it'll, it'll just be hot plate.

Yeah. And like, well, that was, that was the attorney's concern was, you know, this is just opening the door. What are they going to want next? They want air conditioning?

Yeah.

Next?

Which they don't really require.

No, not by the beach. Yeah, but Yeah, if they put a law that says you have to have air conditioning, then okay. Yeah, you know, you may have to rewire the whole house just to put, you know, modern air conditioning in. So there's a lot of expenses that go towards, um, you know, the, the rehab of a place to rent it out.

Well, okay, now maybe this is training people to want to be renters because they're going to have it better than You know, being a homeowner, you know what I mean?

No.

So it like, okay, let's follow this. Let's follow this all the way. Like you're saying, they're gonna require AC, they're gonna require all this stuff. Whereas if you bought a house, you're like, oh no, I could live without that stuff.

Mm-hmm.

Then all of a sudden, if you're a renter, all of this is required. It's gonna turn a lot of landlords off.

Yes. Right?

Yes.

So is that the point?

I don't know.

Overall?

I don't think so.

Or is it there's just a lot of slumlords out there, so we got to rein that in? I mean, what, what's the point?

I, I don't know. Oh, okay.

Well, it's up for debate, I guess.

I guess.

But they're making it a law and If, you know, now I could see people coming in, signing the lease. You forget that you have to have these things there and then they sue you. It's a trap. All this is a trap.

That's always the case.

Because when I was looking up this tenant stuff, this landlord-tenant laws, there's so many law companies that are putting out infographic videos of tenant rights and how you're getting screwed over. What you need to look for to stick it to them.

Yeah. Call 1-800. We'll get them.

Yeah.

Yeah.

So that's kind of freaky, but it's not going to stop me. You live and you learn, people. Okay.

Applies to all leases entered into, amended, or extended on or after January 1st, 2026 into the future. These appliances are now part of what California calls their statewide habitability standard. This means landlords are responsible for repair or replacement.

All right.

So what exactly happens to a rental unit after a major natural disaster like we had in the recent LA wildfires? That's where SB 610 comes in. That law clarifies the landlord and tenant responsibilities when a rental unit is damaged by a declared emergency like fires, floods, or similar disasters. Well, if a unit is under a mandatory evacuation order, the tenant does not owe rent during that time and any prepaid rent must be refunded. So for example, you paid your rent on the 1st, a mandatory evacuation starts on the 15th, the landlord must refund the portion of rent covering the period after the evacuation begins.

And so that's common sense.

That seems fair. That seems fair.

Absolutely. That's common sense. That's where I'm like, are there people out there just And maybe that's a quick way to evict somebody as well. Like, declare it a disaster. Oh, it's been declared a disaster. You have to leave.

You have to leave. There's natural gas coming out from the bottom.

Get out now. Yeah.

Yeah. That's, that's kind of a good idea actually. But I mean, it must be that, that—

Why, why would anybody not pay, you know, somebody?

No, they're making them pay. They're being like, I don't care. There was a flood. You still have to pay on the first.

I don't care.

No, that's crazy. That's pretty dumb.

I mean, it must be. People are doing it. Yeah, people are doing it and then somehow putting it on their—

I mean, if they're there, if they're using the space—

Yeah, no, but you're saying mandatory evacuation.

No. Yeah, no.

They're dragging me out of my house. Yeah, I'm not— I'm— I shouldn't have to pay the next month's rent. Yeah, yeah, but I don't know.

That—

yeah, that's kind of common sense, but Apparently slumlords are out there.

This next one isn't incredibly common, but it does come up. Hence, that's why we have this law, AB 1414. If a landlord is charging tenants for bulk internet service, tenants now have the right to opt out of that monthly fee. They can't be required to use whoever is provided by the landlord. So a landlord cannot require a tenant to pay for a specific internet plan as a condition of tenancy. As long as they properly opt out of that. And there's a new law for tenants who rely on Social Security benefits. AB 246, which went through several different versions, it started out as an LA County rent moratorium before it changed. The final law creates a temporary eviction defense for those who rely on Social Security benefits. So if a tenant's failure to pay rent is directly caused by Social Security benefits being delayed, reduced, or terminated, and it's through no fault of the tenant. If the landlord moves forward with an eviction, the renter can use this as an affirmative defense for nonpayment eviction cases. This does not erase the rent that's owed. The renter still has to pay it, but it does offer protection until the Social Security payments are rolling back in.

I mean, everything he's saying, honestly, which is really surprising to me, is all common sense.

Right. This is coming from California.

No way.

So I mean, it must be a law for a reason. They must have made it for a reason because, you know, some dickhead was like, sorry, I don't care if you're sick.

The only time you're not going to pay your Social Security, which is never going to happen, is if the government shuts down. But they're still going to pay.

They have.

They continue to pay. They paid last time.

Right. Oh, even during the government shutdown?

Yeah, of course they did. Yeah, I kind of stopped that payment. Come on. Did I forget it? No, that one keeps getting paid.

Okay.

It's like, yeah.

I don't know.

That's nuts.

I don't know.

That's nuts.

Apparently people are getting evicted out there.

Finally, let's talk about one of the biggest friction points between landlords and renters, and that's refunding the security deposit. AB 414 modernizes the way deposits can be returned. Until now, landlords were required to physically mail a check. Along with an itemized list of deductions, plus comply with the new photo documentation rules. Starting in 2026, landlords can now offer electronic returns of security deposits and may email the itemized statement and required photos. And there's another big change. This is one that drove people crazy. When there are multiple tenants on a lease, renters can now specify how the deposit should be split and refunded. Previously, the landlord had no choice, but to issue a single check with everybody's name on it. This update alone will save a lot of frustration on both sides. But these changes to the security deposit laws were definitely overdue. Now that you're up—

Interesting.

More common sense. You know, more common sense. Like, wow, 2026 or actually 2025 legislation for 2026. Wow. Yeah. Yeah, well, common sense stuff.

And it's funny because, you know, when these things turn into laws, it's so hard to—

you can't—

they don't get taken off the books. So something where it was like, you need to write a check, that was before obviously electronic deposits. So then they had to write a law to make—

Yeah, let me ask you this. Husband and wife, they're both on the lease. And they're getting a divorce and one of— and they leave, right? Who do you write the check to?

Oh God, the wife.

No, you have to write it to both of them.

Oh, oh yeah, yeah, yeah, yeah.

You have to write it. Yeah, I think that's what he's talking about.

To Venmo them 50/50.

Yeah, absolutely. Because if not, you're in trouble because you're gonna owe the other 50 to the person you didn't pay, right? And you better have it in writing because, you know, I don't believe anybody. It's like, yeah, you can pay me. My husband doesn't matter. Right.

He doesn't care.

Right. And then you call the husband. You can pay it to me. My wife's okay with that. Oh, okay, good. I'll split the check in half and send both of you half.

There you go.

How's that?

Yeah, perfect.

Yeah. Unless you give me a court order that says it's supposed to go to this person. If not, I'm paying half and half.

There you go.

Yeah.

That's—

and that's what he was talking about, the tenants, except he was saying that They're writing one check with everybody's name on it, which means everybody has to go to the bank and sign in front of them. Yeah, that was a little bit inconvenient. So why not write 4 or 5 checks? Who cares?

I mean, maybe that was the law. I don't know.

No, no, that's just laziness. That's all that was, just laziness.

Yeah, that's probably right. Yeah. Was the picture thing— that's always been in place? You have to take pictures of everything?

No, that started last year.

Okay.

Another good common sense thing is take pictures before people move in and then after, okay, they move out.

Right.

So you can kind of compare because you go to court and you can say, you know, here, this damage was on the wall. Well, it wasn't on the wall. Well, yeah, he signed the contract that said it was on the wall when he moved in. Okay, I mean, there was no damage on the wall when he moved in, but When he moved out, there was damage on the wall. And here, here's the pictures of the walls.

Right.

Okay. This is the date, January 1st. And here's the date, December 31st. And there's damage on the wall. They're like, that's why I charged him.

AI, Your Honor. I never damaged the wall.

Yeah.

That's coming soon.

Yeah.

The AI defense.

Could be.

Yeah.

Yeah.

Okay. And isn't there, I think you told us about this and we actually used it against our landlords. You had to, you have to. It was a certain time period where you have to request something when they move out. Yeah, maybe a refund, or—

They have to give you an accounting, and I believe it's 21 days. Yeah, so you, you best get a total accounting of what's going to be charged and what they're holding back. And see, I do things a little bit differently in that when I do the move-out inspection, I literally go like Yeah, that screen's damaged. It's probably $75. Okay. So, and I write $75 for that screen and any other damage I see, I write it down there and I say, here, probably I'm going to end up at the end of the day holding this money back. Okay. For repairs that you created. Just sign here.

Right.

And that avoids a lot of that stuff where, you know, where people, you charged me $500 for this? It's like, why? I think that the biggest, Highest ticket item that I have to spend out of my pocket is cleaning. You know, at the end of the day, around here, nobody cleans a place after somebody moves out for less than $300 to $500.

Yeah.

And these tenants just have no clue. Oh, Joe, I cleaned the place, you know, and you send a cleaner and it's like, oh geez, this is really dirty.

Yeah.

Yeah.

You know, and then you send them a bill for $300 or $500 and they go crazy. But, you know, again, I tell them that when they're moving out that, you know, here's your choice. When you move in, we can have a professional cleaner, which I do. They're going to come in and here's the receipt of what I paid. When you move out, I need to have a receipt that you hired a professional cleaner to do the same thing. Okay. I don't care if you're a cleaner yourself. I'm sorry, I can't accept that because I don't know how good of a cleaner you are.

Right.

I need to have my people or somebody else showing me that they cleaned the place so that if it's not clean, I'm going to call them back and say, hey, you know, we paid you $300 to $500 to clean this place, but it's not clean. You need to come back.

Right.

So that's, that's their choice. Either clean it before they move in Um, or, you know, we're going to charge them a cleaning fee at the end of the day.

Yeah. Yeah. When we moved out, I think they sent it to— it was 21 days, you said? Yeah. I think it was like, they— it was 23 days and Lauren was like, haha, gotcha.

Okay.

And they were— I think they charged us to clean the carpet, but They had put new flooring in too. So we were like, and then, and then clean the oven and they had replaced it. So I don't know, but we never paid it.

Okay. Yeah. I was going to say that'd be hard because that's normal wear and tear.

No, no, exactly. We were in there for 10 years, you know, and we're doing like—

Oh, especially.

They're like, we're going to clean it. This is how much it was. And we saw the pictures.

Carpet.

The life of a carpet is 5 with a tenant at best.

Yeah.

If it's your own home, 10. You know, and your wife's going, it's time for new carpet.

Yep.

You know, but, uh, yeah, no, that's normal wear and tear.

I think they were trying to get like $200 from us, but we didn't pay it, so.

Okay.

Oh well, they didn't try that hard because they didn't send it out soon enough.

So then they didn't come after you, and they didn't— yeah, come after us for $200.

No, yeah, we're fine.

You called their bluff.

Called their bluff, and it worked.

You're still hiding, right?

Yeah. Oh yeah, yeah, I'm still on the run. Hopefully they don't see this, but that's okay. Um, any other big things that you predict for— well, not even predict, but that, that are happening in 2026? Um, everyone seems to be optimistic overall.

Pretty optimistic.

People coming out of a fog and a depression. Is that why?

I think, I think you're gonna see, you know, especially the first 3 or 4 months here, maybe into June, A lot of buyers looking to assume low interest rate loans. You know, that's probably right now, I would say that's probably one of the, you know, most requested questions and answers that I give to people looking to buy something. I had somebody in my office yesterday, and he's a real estate agent, and he had no idea about assumable loans. And so I sat down with him, you know, because you know me, I'm a nice guy. And I Walked him through the process and I told him, you know, this is what you need to do and how you do it. And he's looking for a place to buy here in Orange County that he's going to live in. So the only problem is Orange County is so expensive that there is not a lot of assumable loans here that you don't have to necessarily put $300,000, $400,000, $500,000 to, you know, fix that gap that's there.

Um, someone sent me one in Dana Point.

And what was the gap?

It was a lot.

Yeah.

So basically they have a $1 million loan that you can assume.

Okay.

The seller is willing to carry $200,000.

Okay.

And they want $700,000 down.

Yeah.

So I'm trying to get them down lower, but—

Why don't you reverse that and say carry $700,000 and I'll give you $200,000?

Exactly.

Yeah. And the 7, is it 0% interest?

Oh, I think they wanted whatever the interest rate is.

Yeah. Well, they want to sell the place too, right? Like, hello, let's make it, uh, let's make a deal, an incentive here. Let's make a deal. Yeah, exactly. Yeah, I'd reverse it on them, see what they say.

All right.

And well, I did, I did something. I was like, get closer to $300,000 down. And then I want to take over the mortgage sub 2. I mean, because I can't qualify for a million.

True.

True. So that's kind of how I flipped it. But I don't know if this guy can afford that.

Big house overlooking the ocean?

It's in Capo Beach area. Nice. Has a pool. Like a 3-bedroom. Yeah, it's pretty nice.

Rehabbed or no rehab?

It looked like it was an Airbnb, so it's in decent condition. But it has this weird like addition in the back.

From a wholesaler or seller?

Yeah, wholesaler.

Oh, okay. So yeah, they're not gonna fight for you.

No, I mean, this guy, he was like, I'll go back and, and see.

So yeah, I don't know, see what happens. That's code for moving on to the next guy.

Yeah, this guy is. But yeah, they were like $700,000 down because I think they want $1.9 For the, for the home.

And what's the ARV?

Probably like $2.1 or something.

That's not that much either. Yeah, you know, so yeah, I don't know.

I mean, finding seller finance out here is pretty tough.

Yeah, it is.

But you can— we can all try, we can all hope. But the assumable is, you know, I think it's a great— I think it's a great option if you're looking because, yeah, I mean, if And you have that website that pulls it all up. So yeah, it's a pretty smart move because there are still some, you know, below 4, or even 4 right now seems amazing.

Doesn't it?

Yeah, so 4 or 5. Yeah, you'd be pretty pumped on that. Yeah, so, but like you said, it's the gap.

So I don't know.

If you, if you want to live in Riverside, there's lots of them out there. You know, low debt, like 50 and 60, you know, even I saw some even less than that, believe it or not. But, um, yeah, if you want to live in it, there's, there's, you know, lots of opportunities out there. But like this guy said is, I want to live in Orange County because like it's way too far, you know. It's a thing.

It's a thing, Joe. People have to live in Orange County.

He says he works in Long Beach or something like that. So it's got to be Orange County. Because Riverside would like— yeah, he'd have to buy a second place over here, move his family out there, but, you know, kind of commute on the weekends.

Yeah.

Live out here.

So, yeah, I mean, aren't there— are there any in Long Beach? But he doesn't want to live in Long Beach.

There's a few in Long Beach, and we did find one in OC. It was in Brea, a nice part of Brea and stuff. You know, it was like, but it was like a $200,000 gap, which he says that's, that's not a problem.

It's not that bad.

You know, and it was like 2.5% interest.

Jeez. Yeah.

Yeah. But, you know, he was even saying Brea's like Long Beach, Brea.

That's pretty far. Oh, okay.

It's in Orange County. Yeah. Oh, hello.

Yeah. And it's like, how can you— like, that's working with a typical buyer.

Yeah, exactly. Yeah. You can't be You know, too picky. If you want something like that, you can't be too picky at all.

Oh man. Yeah, these buyers want the world right now.

They do.

They do.

Yeah.

But the thing is, we wait long enough, it becomes a seller's market. I don't even know if that's— I guess that's good if we're in the flipping business. Do you want it to be a seller's market? But then it's harder to get deals.

Which is what it is right now.

Yeah, it is.

Oh yeah, we're a seller's market.

Okay.

Yeah.

Well, isn't it a buyer's market if the buyers are like dictating everything?

Well, we're just coming out of a seller's market going into a light buyer's market, but it's still, I would say, still a seller's market. Okay. Yeah.

Okay. Yeah.

Because, uh, yeah, I mean, at the end of the day, it just depends on Bad, you need to sell, right? You know, yeah. If you can wait it out, if you can wait it out, then why even have it on the market? Just wait it out.

Well, I saw the days on market on the MLS are up to 93, the average days.

Yeah, that's insane. That's getting up there.

That's yeah, that's crazy. It's three months average. Is that what that is?

D A M. Yeah, D O M.

D O M. What's D A M? That was like on the MLS.

Yeah, it was just like days on market.

Yeah, DOM. But they have like on the MLS, this is DAM, and then it said 93. So I thought that was the—

the only other one is a CDOM, cumulative days on market.

Oh, what the heck? Okay. Yeah, I don't know what it was looking at.

I don't know, but Yeah, that's pretty weird.

It said 93.

You're playing with all these buttons and stuff there, so—

No, I don't know.

No, no.

Okay, see, I'm just pulling it up real quick here. See if we can see it. Oh man, I missed it. Okay, never mind.

It was there.

Yeah, it was there for a second, but let me see. I'm just pulling it up really quick, people. Average. Oh yeah, average DAM, average days on market for listings over last month. It went down to 89. That's good.

Yeah, I, I don't know.

And that's headed in the other direction for San Diego, right?

Because this says South Bay.

Oh, I don't know.

That's not for all of California. Okay, just for that particular area.

Oh, all right. So South— well, South Bay I think is Isn't it Redondo and—

I don't know. Is it?

Oh, I don't know. That's what I thought South Bay was.

Redondo.

Okay.

It could be. Yeah. I mean, that's just that part, that part of the MLS that you're pulling up. Okay. Yeah. It's not for the entire state. It's, you know, different, different in different areas.

Okay.

Good to know. Anywho. Um, okay, cool. Well, yeah, I'm looking forward to an optimistic new year here.

Yeah. If you're listening out there, I hope you're listening. If you want to be on our podcast, please check us out. And, you know, you can either come here in person on Thursdays at 4, or we have the ability now to do kind of a Zoom-type thing. So you can stay at the comfort of your home. If you'd like to share something, please reach out and we'll get you set up with a podcast interview on a Thursday at 4 o'clock.

Oh yeah. And this Monday we have our meetup.

Meetup. Please show up. It's your time to shine. Stand up and connect. And if you don't want to volunteer, let me know and I'll make sure you volunteer.

Yeah, no, it's good. Because you can definitely meet up with people that, uh, you know, you need to.

Yeah.

Alrighty, you guys, fun times. We will be back here next week. We'll see you on Monday live in person in Irvine, California, and, uh, have a great rest of your day.

See you later. If you want some more advice on real estate investing, reach out to us one-on-one.