Is Now the Bottom? How New & Experienced Investors Should Play the 2026 Real Estate Market

What's up everybody? Welcome back to the New and Experienced Investor Podcast. Everyone's asking, is it the best time to buy or are we walking into a trap? Today we're breaking it all down for you, whether you've done 50 deals or you're about to do your first. I'm Alex Barnett. I'm one of your hosts. I'm the new guy.

Joe Homs, and I'm the experienced guy.

That's right. So this episode is going to be good whether you're brand new or if you're an experienced investor, because we're talking market cycles, which is, uh, pretty important, pretty exciting, because I'm living through my first one in real time.

I've, I've lived through 3 of them.

Yeah.

So this is your 4th?

This is— yeah, this is my 4th and the longest, I can tell you.

Okay.

This is the longest one.

Well, that's interesting that you brought that up because, um, there is a very well-known economist who says we are right in the middle of an 18-year cycle, or at the end of it actually.

I was gonna say, no, it's—

We're not in the middle anymore.

So, well, if 2008 was the last downturn—

Yep. Well, oh yeah.

Where are we?

Well, yeah, I guess 18 years. It's 2026.

Yeah. So I've experienced 10-year cycles. So this is the first I hear of an 18-year cycle.

Yeah.

So what's gonna happen?

Well, that's, uh, we're gonna explode. Yeah, we're gonna explode. We're gonna all start living on the moon.

Oh yeah.

Start doing real estate on the moon.

Okay.

Um, but yeah, this was made famous by economist Homer Hoyt. You know Homer Hoyt, right?

Yeah.

Yeah. Homer. Yeah.

You guys go way back.

Is he on The Simpsons?

Yeah.

Oh, that's Homer.

Homer Hoyt.

Homer.

And so, yeah, he, he basically found this 18-year cycle pattern dating back to the 1800s, which is kind of interesting. So, um, but here's the thing. Do you wait to time the market or do you just live by fundamentals?

Could you imagine if you bought something in the 1800s? Would it be worth now?

Yeah, people did.

Wow.

Um, I was watching the show about, uh, Robert F. Kennedy Jr.

Yeah.

And so I started looking into like, who are the Kennedys, the Onassis family? They, she go back, basically the, their family was like, they owned land on what is Manhattan today. They're like, what, like some Dutch explorer or something came here and bought a plot of land, Manhattan, like that. That's what it would be. Do you be like royalty? You'd be American royalty if you bought property in the 1800s and just never sold it.

So where do you buy now?

Ah, Hemet.

I'm just kidding. Okay.

No, you just have to find—

you have to find— In the middle of the desert or something?

No, no.

Is that what it's like? You know, are they gonna come up with something where we can actually use that? 3/4 of the planet is water, but we can't really use it. Like—

Terraforming. That's what that's called. You build—

They have to do something.

Yeah.

You know, take that water, send it out to the desert, and, you know—

Start tilling the land.

Put homeless people there.

Exactly.

Yeah.

You just started a nonprofit right now.

I just solved it right there.

Let's do it.

Yeah. Give me $1 million and then in a few years I'll ask you for a billion.

Yeah. And then it'll build one tiny home.

Yeah.

And they'll be like, where's the rest of it? We're like, I don't know. We built this tiny home.

Yeah. We built it. There you go.

That's what you get.

That's what it costs.

So it's kind of interesting. I mean, obviously if you've been in the, in the real estate game, you, I mean, everyone points to 2008. Yeah, you know, 2000. If you're looking at this chart, where, where would you say this expansion was? 2022?

2020.

2020?

Yeah, right after 2021, 2022. Yeah.

Yep.

So yeah, he didn't put any years on this.

No, because I mean, it repeats itself apparently. So I don't know if you could go back to the late '70s or something.

And it says expansion, then hyper supply. I don't, I I don't know that we're in hyper-supply.

I don't think so.

No.

Yeah, I think, I think we're kind of in a standstill right now.

Very much.

Where it's kind of frozen. Um, this is hyper-supply begins when the equilibrium between supply and demand tips towards excess, but we're not— I don't think we're there.

Yeah, we're not there.

Well, here you're going to be happy to know that according to Blackstone's research, the hyper-supply phase is marked by supply growth exceeding Demand growth. So yeah, maybe that was last year. That was last year. Yeah. So rent growth typically remains positive but begins decelerating. That's kind of where— that sounds familiar. Many market participants fail to recognize this peak until after it passes because occupancy rates still appear strong and well above long-term averages.

Okay.

So then are we in the recession? Yeah. Are we back in the recession?

I heard that word today mentioned. Yeah. I don't, I don't think we're there. I don't think we're even getting close to that.

Yeah.

Um, maybe in another 3 years, but I, I don't see it. I just don't see it.

I think we're, maybe we already passed it and we're going into recovery mode.

Again? Yeah.

It's a cycle. It goes back around. Start recovering. The interest rates come down.

I missed a recession?

You lived it. You already lived it. You fell asleep and then you woke up one day and it was over.

The last recession, 2008, I was buying stuff left and right.

Yeah.

Literally left and right.

Bargain opportunities for patient buyers.

That was you. That was me.

That was you.

Yeah, that was me. I don't think we've passed that.

Well, I mean—

I don't think we're there yet.

Current cycle approaching predicted peak range.

See, we're at the peak, it says.

Hmm, so then we got to go down?

We have to go down.

Oh, I was hoping that was not gonna happen. Well, I was— the, the whole thing is, are we at the bottom? And some people would maybe say we are at the bottom.

I don't think we're at the bottom.

You don't?

No. Oh, I don't think we're even close. Oh.

How far does it go? That's the question.

2008. Well, from 2006 to 2008, a condo here in San Juan Capistrano was worth $550,000 for a 2-bedroom, 1-bath condo, right? It went down to $100,000. Yep. Guess where it's at right now?

$500,000.

$550,000.

Yeah.

So if it goes down, then you go back down to 100, 150.

Well, it's not— maybe it won't go— that was like a catastrophic event. I'm thinking cycles could just be minor.

Minor. So yeah, but that's no fun.

That's no fun. I know everyone's been waiting for it.

We need a major cycle. Yeah, we need a major, major downturn.

Yeah. Well, what's interesting is Um, you know, after modest price declines in 2024, 2025, forecasts call for a 1 to 2% price growth in 2026. Maybe a little bump.

Yeah.

And I think that's going to be maybe towards, um, pointing towards what Trump is trying to do.

Yeah. He's trying to keep the housing prices up and lower the interest rate.

Right.

I don't know that he's going to be able to accomplish both.

Right.

Because the minute you lower the interest rate, then people are coming back in.

Yeah.

Supply and demand. They come back in, the prices are going to go up. They're going to shoot up. I know.

Well, and that's kind of interesting. There's a video here we'll play right here, a little news segment explaining just that.

Want to pivot now to the housing market. Could 2026 bring a new wave for the market? National Economic Council Director Kevin Hassett telling Fox News that cabinet members will be meeting with President Trump at Mar-a-Lago after Christmas to discuss a major housing affordability plan. This comes as the president has been considering declaring a national housing emergency. Joining me now to discuss all of this, Dolly Lenz, real estate CEO and managing director, Dolly and Jenny Lenz. Great to have you both. Merry Christmas, happy holidays.

Thank you.

So we're just talking about this issue of affordability because when it's, whether it's Gen Z or even a little bit of that millennial generation, They wanna buy a home, but it's not affordable. Why is that the buzzword? How do you fix that?

Well, half of America is considered cost burdened, meaning that 30% or more of their income goes to housing, right? And this is a huge, huge uptick since before COVID where prices were 50% cheaper and the average mortgage rate was from 2013 to 2019, 4% versus 6.6% in 2025. However, good news, we think that next year mortgage rates will come down. We're gonna see a couple, maybe a new Fed chair that's gonna lower rates and they'll be about 6%, which is good news.

So talk to me about that, Dolly, because I hear 5.5% could be the new magic number, right? Where we're like 6.2%, 6.5%, it doesn't feel good. We're not gonna go back to a 3% mortgage anytime soon, but 5.5% might be this magic number where it's low enough to unlock a little bit of movement, where I'm willing to give up my 3% mortgage because I'm okay with a new 5.5% mortgage on a new property. What do you hear?

Well, hopefully that combined with the Trump administration preparing incentives for people to do it besides that, right? So for example, the rezoning basically federal land to affordable housing. He's proposing maybe a 50-year mortgage. Exactly.

Feds have a lot of land.

I don't think it works. We went through all the machinations of how it would work, and we don't see it because the banks won't have any—

Yeah, I gotta live near the beach. But I mean, they keep bringing up these same tactics, I guess, and I don't know if it's necessarily going to make anything more affordable. You know what I mean? I don't think Trump can necessarily do anything to make anything more affordable. Like, that ship has sailed.

Yeah.

Inflation already happened. Yeah, the dollar isn't worth as much.

And the interest rates right now are about the same that she was talking about.

Yeah, yeah.

They didn't get down into the low 5s.

No, no, I think— yeah, I think—

They're like low 6s maybe, but—

Right. Not low 5s. No, I think there are people are hoping for that, but I don't think even in this year that it may happen.

Yeah, so he's, he's busy with Iran right now.

What do you know?

He's he's a little busy with that.

He's busy.

Yeah, that's one thing you don't want to have a meeting in a meeting room in Iran. Yeah. Yeah. It may it may not be there.

Right.

Once the meeting's over.

Yeah, exactly.

Yeah.

But I mean, I I definitely have seen it that there's maybe some momentum sort of slowly building back into the. market. I got asking for one of my flips that I didn't think I was going to get.

So I think you got lucky because everything that I've seen, including all my agents, they're, they're waiting, struggling. Yes, they're struggling.

Okay.

Yeah.

Hmm. Yeah. I mean, and then, so, so this is the other thing that she mentioned was, well, we're going to make affordable housing here and there. It's like, that's, that's It never goes the way that they think it's gonna go.

No, no.

'Cause when you look into it, when they say affordable housing, that's a developer coming in. He's, he's gonna build, you know, all these apartment buildings and it's almost like nonprofits. Only a small section of it actually needs to be affordable housing.

Yeah.

And then the rest of it can just be normal housing.

Yeah.

Whatever that is.

Yeah.

But what's interesting is the median price here. She, so she showed nationwide is around $400,000. Here it hit 1.4 million in December.

Yes.

So I mean, where does that lead?

2 million, I'm out.

Yeah. 2 million.

2 million, I'm out. You know, I did hear somebody the other day and I agree with them is if you get rid of capital gains taxes, I think homeowners like me will sell. Yeah. Like I'm there because if I pay my capital gains taxes, it's like I'm going to give hundreds of thousands of dollars to the government, which I do not want to do.

Why?

So if he gets rid of capital gains taxes, yeah, that's a good thing.

I don't, I don't see California doing that. I feel like even if he did that, California would do something in the opposite. I saw something they were trying to make some transfer tax in San Diego, like $60,000.

Yes, I saw that too. Yeah. Yeah. What? Yeah, exactly.

That's insane.

If you sell your house, you have to pay California, $60,000.

That is scary.

That is insane.

Yeah, that is scary.

That got voted down, but yeah, it is insane.

I was just like, what are they doing with that money? I mean, we know what they're doing with that money, and it's not anything to help anybody, really.

No, not at all. No.

Well, let me ask you this. You've seen so many cycles. What does this moment remind you of? Is it 2012 all over again, or is it something different?

There's really nothing this reminds me of. I mean, the other cycles, the dot-com bubble, um, at one point in time it was FHA and VA loans that were underwater, and then we got rid of that, and then the banks were taking on all the risk, and that's what happened in 2008, and then they went belly up. And of course, who bailed them out? The federal government bailed them out.

Yeah, too big to fail.

Yeah. So I don't— I, again, I don't see that happening. I don't see, you know, that we're in a downturn cycle whatsoever. If anything, we're, we're steady, and like you said earlier, maybe going up a little bit in price. So we need to get those baby boomers, those old people, you need to get them off the dime, need to get them To start selling their houses and not having to pay any taxes. And I think that would help a lot. Yeah, you get a lot more inventory on the market, and that's gonna reduce the prices of homes.

All that's locked up right now.

Yeah, just sitting there. Why, why sell?

Yeah, well, I mean, what— I guess so everyone's waiting. What's the danger of waiting for that perfect moment? I mean, there's no bell that rings that signifies that we're actually at the bottom. What What indicators do you look for?

When buying a home as a principal residence, there is no such thing, I believe, as waiting. You're going to buy this house, you're going to be able to afford it, which is very important. You can be able to afford it, you can make the monthly payments for as long as you live there because it is your home. An investment is totally different. So am I sitting on the sidelines waiting for the next downturn? Yeah, I am. Unless the numbers make sense, unless I can cash flow. So, you know, I'm not looking in California very hard because it's not cash flowing here still in California. So looking out of state, you know, different, different parts of the US. where it, it may cash flow. Like you said, it's $400,000 for a property over there. So you just have to make the numbers work, find out, you know, how much it's going to cost for buying it, how much it's going to cost to lease it out, how much is, you know, your, your expenses are going to be. And if you're making money at the end of the day, then why not buy it?

Yeah, I totally agree. Yeah, there was a video that, um, Ken McElroy—

McElroy.

McElroy. Dropped. Um, he's— I think he was Kiyosaki's like right-hand man.

Yeah, for a while. Yes.

Yeah, so he was kind of mentioning the same thing, and he's, you know, he's starting to buy again, and— but make sure that it cash flows so you can ride out any volatility. And then if rates go down, then you refinance at that point, you know. But at least you're holding on to something.

And that's all us old guys think alike. They do. Yeah.

They do. You know, their loan's maturing or they're running out of money or whatever it is. And, and so that's all happening right now kind of below the scenes. And so there's capital calls, and this has been going on, so it's not new, but cash calls, um, you know, from the GP, the LP, uh, the prices are reset. And so the example would be if you bought something worth $50 million 3, 4 years ago, it's probably worth $30 Today? Easy. And the reason is, is because rates went up and therefore cap rates went up. All things being equal, the odd thing is, is that the actual performance of the assets haven't really changed all that much. Which is wild because you could have worked your tail off to like increase NOI and done your job.

Yep.

But it's still worth less. Correct. Yeah. So now if you have a long-term hold philosophy and a fixed rate philosophy, and I'm going to manage this thing, for a while, like, like, like I do, which is we hold for at least 10 years almost everything. I'm not trying to time or anything like that. These things happen. Like, they go— Things I raised for, for you in '08, you still own them today? Yeah, we own a lot of properties from '08. And, and, you know, like, a great example is I bought in, uh, Austin, Texas in 2005 and '06, bought a bunch of, you know, a bunch of properties there. In 2008, 2009, they weren't worth what I paid, period. But I didn't have a loan maturity. I didn't have a cash issue because I still had tenants. And the tenants, it cash flowed when I bought it. It cash flowed, you know, 3 years later. And so while the value was, it'd be the equivalent of you buying a home and it being worth less, but you don't really care because you're going to work and you're paying the mortgage and you You know, there'll be a day where it'll go up. So the, you know, that's, that's how I believe you should own real estate is kind of more of a long, long on the long haul. And, and because you just can't always predict these, these things, there are things you can do for sure to head—

So I agree.

Kind of interesting.

Yeah.

And he did tie it back to, you know, owning your own home. It's, it's, it's a long-term play. It should be historically. Yeah, it's going to go up. Yeah, you know, just, it just is. So I think people just get so caught up in the—

I think they're just trying to time the market.

They're trying to time the market. But I mean, even if you buy a house, I talked to somebody, he bought a house in Costa Mesa and he's like, I'm on Zillow every day checking to see if it's going up.

I'm like, dude, you got to give it, you know, some years. That's why I'm terrible at investing in the stock market, right? Because I would literally just— and especially nowadays, everything's on your phone. You know, it's like, oh geez, it dropped 2 points.

Yeah, it's like, oh God, it's in the red. It's like red arrow down.

I gotta sell, I gotta sell. You know, housing shouldn't be that way. You shouldn't be looking at it every single day.

No, no. Yeah, you hold onto it and you kind of let it do its thing. You forgot about it. And then all of a sudden you're a genius.

Yeah.

So there you go. So let's get people off the sidelines here, you know, because they have been waiting. They've been waiting patiently. They're like, I don't know where I'm gonna go, where— what's the best exit strategy? We got all these, all the different types. Um, analysis paralysis. I mean, you talk to a lot of people like that, right?

Yeah.

So, um, Every month you wait in a market like this has a cost, both financial and psychological. So how do you even get started? Let's say you're in Southern California. How do you even get started investing?

Like, put, put one foot in front of the other and actually step. You know, you, you've— you're not gonna, you're not gonna buy a $10 million house to begin with. You may have to settle for that $50,000 mobile home purchase, you know, somewhere to get started, to get the knowledge, to get the expertise, and then start moving up from there. You know, single-family mobile home in a senior community in Hemet, you know, then your next, your next Few deals after that are the same until you get to the point where you're just sick of senior communities. And so now you're going to start exploring, you know, buying single-family homes or condos that you're going to be flipping, um, more expensive, more rehab, but you've got the expertise.

Absolutely.

You need to start someplace and it's starting someplace that honestly, it's literally just putting one foot in front of the other and saying, I'm, I'm getting into this game and I'm, I'm going to start here and start moving forward.

There you go. And you don't have to do it alone. I mean, Joe's here, he's got a wealth of knowledge, but besides that, you also have creative finance options.

Well, see, that's the thing. When you're putting one foot in front of the others, you have to learn all those things. You just, it just doesn't, I mean, I can't say, ooh, Alex, you've got all my knowledge. You know, it doesn't work that way, right? You know, even though that's what happened to Elon. Some alien came down and said, you've got all my knowledge. And yeah, he says he's not an avian, but I don't believe it. I think he is.

Oh, he for sure is.

Yeah, I think he is.

But, uh, like for example, today, um, called an old lead. They had it listed for a while and the guy was— he was just done, just done with it. So he's like I was— I asked him, all right, are you willing to seller finance? He's like, well, my terms are pretty, pretty stiff. It's going to be $20,000 down, you know, and we're going to carry it for 10 years. So I mean, if you don't have a lot, that could be your entry point right there.

Yeah, I heard that conversation. That was a really good conversation. You got him from no, I don't want to do seller financing to Yeah, you know, I'd consider it. And then you said, well, really, I only need to do seller financing for 6 months. How's that sound? Oh, well, yeah, that sounds a lot better to me. I could probably carry a little bit more if you did that. It was a great conversation, by the way. I meant to tell you that.

Thank you.

We had other things we were talking about at lunch.

Yep, yep, yep, exactly. So, you know, OC maybe, or not OC, but Southern California may seem daunting, but you just gotta get out there.

Gotta get out there.

Gotta get out there and find the deal. So also I would say, you know, as, as a mindset shift is don't think that your first deal is gonna automatically be the, your best deal.

No.

I mean, it's like you were saying, you gotta learn, you gotta put the reps in.

Yeah.

So it may, you know—

Yeah, but don't be so aggressive that you're buying a bad deal.

No, exactly. That's okay. Yeah. Don't, you wanna be, you wanna walk away from the bad deals.

Yes.

But you know, like maybe, well, now that I'm rethinking it, I would say put, give yourself a big spread in there because you're gonna make mistakes.

Yes, absolutely.

You're gonna absolutely make mistakes. But, You know, just, just count that as your, you know, your learning experience, and then that's your launch pad, and then you're off to the races. So that's, yeah, that's exactly what I did. Now look at me, I'm a podcast host. Okay, so, um, let's go into some overlooked strategies. But if you've been listening, you're, you're gonna be like, why are you talking about this? And Let's talk about why mobile homes are having a moment right now.

I think it's the price point, the ability to fix it easily with not a lot of money. And again, the final price point that people can actually afford.

Absolutely.

Especially here in California.

Oh yeah. If the median price is $1.4 million, we're selling these for $450,000. Yeah, which also seems high in Hemet.

And sometimes, a lot of times, 55+ communities, and people are still getting older. Yeah, and they need someplace to live. And a lot of people, you know, surprisingly, a lot of them pay cash.

Yeah, paying cash. Yeah, but there is the option for FHA. I mean, we're doing the newer ones, and I will say People are liking the new ones. It comes with a warranty, comes with all brand new appliances.

It's like a new house.

It's like a new house.

Yeah.

So people are, uh, people are digging it. So that's why we're looking at that. Um, but I mean, affordability is— it's, it's gonna get harder and harder. There's no way around it. It's not going backwards. No, you can't, you can't stop it.

So unless we bomb Iran or something.

Yeah, then all of a sudden maybe the dollar will go Yeah, power of the dollar will go up.

Yeah.

So yeah, we'll see what happens there. But, um, if you guys are not looking at mobile homes, you definitely should.

So— And if you have leads on mobile homes, then please let us know.

Yep.

Don't call Alex, call me.

Call Joe.

Call me.

Yep. And we've been looking at ones— I mean, I've actually been— a lot have been coming across my inbox 1960s mobile homes. You can't do anything with that. No, it's, it's basically trash.

Trash.

So we gotta rip it off and put a new one on. But the people are having a really, really hard time, even if it's on market, getting anyone to offer anything, you know.

And, and tell, tell the folks here why, why it's trash.

Well, if it was made pre-1976, it wasn't built to what they call HUD standards. And so it's harder to get financing for the end buyer. Let's say we go in and we fix it up, we make it super nice. They're still most likely gonna have to pay cash for it.

Mm-hmm.

Or get a special mobile home loan, which is kind of like hard money. So the interest rate is higher. It's just—

So funny thing, I had never done mobile homes before. Alex introduced me to mobile homes. Our first deal, we ended up making $100 grand on. It was 1960, '70?

No, I think it was '77 or something.

No, it wasn't financeable. That one, that one—

I thought the first one was.

No, the seller, I mean, the buyer paid cash. And we also found out along the way, you have to put it on a permanent foundation. It's called 443A. We were putting stuff on permanent foundation that was not even loanable at the time. So we were spending, what was that, $2,500, $3,000, somewhere around there for something we did not even need to do. So even experienced guys have to gain that knowledge.

Yeah.

And again, put one foot in front of the other and Do whatever needs to be done to get to the point where you want to be.

Yeah, yeah, it's kind of— we were like, I think we used the permanent foundation people one or two times and they're like, you know, putting this on there doesn't really do anything. Yeah, we're like, oh, now you tell us.

Yeah, now you tell us after you charged us. Yeah.

So that was a fun learning lesson. So yeah, it needs to be 1976 or newer with the permanent foundation and then the eyes of the lender, they see it as actual property. Right, right.

It is a car.

Yeah, exactly.

It's a car.

Car with a pink slip.

Yep.

That's it.

And that's what it is, a pink slip.

That is it. So let's talk about, um, what could go wrong in the upcoming years here as we're at the bottom. We don't know. Joe says we got, we got ways to go.

I think we have ways to go.

Um, insurance costs. That's a big talk out here. I think nationwide.

Yeah, nationwide.

You know, I mean, everywhere's got—

Florida has problems.

Florida has problems.

We have problems here in California. So yes, everywhere, insurance is, is a problem.

Yeah.

So now, now, you know, underwriting is more important than ever.

Yeah.

And what I think people don't consider is when you purchase your property, um, you know, you gotta, you gotta put in the taxes for the new purchase price, whatever that's gonna be. And then also, you know, your, your new insurance costs, that's gotta be in there, especially if you're gonna buy and hold. It's not just whatever I'm bringing in minus the mortgage, it's all that other, all that other stuff, right? So make sure you're on top of that. Um, something out here, SB 567, some new tenant protection laws.

When aren't they protecting the tenants out here?

I don't know. But, um, California's evolving eviction rules require strict compliance. New investors especially need to understand what they can and can't do.

It's kind of a lot of that I always say is due diligence up front. When somebody puts an application in and they say, yeah, I've been evicted 3 times, that's probably somebody you don't want to lease to.

Yeah.

Okay.

If anyone says they're a paralegal, stay away from them.

That too. That too. Yeah. You need to do your due diligence up front. I always interview my tenants in person.

Oh yeah.

Because you have no idea what they tell you. Joe, yeah, I wanted to tell you upfront, my FICO score, it's bad. It's 560. Okay. It's bad. But I went through a couple of problems, but I'm resolving those now. I go, good for you. You can go resolve them someplace else. 'Cause I don't need to hear any more than that.

Nope. I go as far and I ask them if they've ever seen Law and Order and if they have, Don't rent to them.

That's a good one. I like that one. That's a good one.

I don't want them knowing anything about any court systems or anything.

True.

Yeah.

So that's, that's what I'm looking for. But, uh, it's interesting because there's a couple mobile homes we were, we were looking at, and these 2 gentlemen, they were brothers, and they had these mobile homes, and they were really run down. I'm really, really run down. They were getting $1,500 a month and they'd never been to the property. They don't have insurance on them.

Geez.

Yeah. And they'd just been collecting $1,500 from this family.

Yeah.

And none of the doors even worked. Like nothing worked in the— so they were just flapping in the wind.

Yeah.

I'm like, how did that, how did, How do they get away with that, I guess, is my question. And I dump a bunch of money into a mobile home, and then the first person I rent to says it's uninhabitable. So how does that happen, Joe?

It just depends who, who's renting, you know. They obviously needed a place to live, right? You know, I know they called the landlord, say, hey, can you paint? Uh, what?

Yeah.

For $1,500 a month, you want me to do what?

Yeah.

No, that's on you.

Yeah. You know, there was no way to leave this thing. It was— yeah, it was really bad. Um, short-term rental regulations. This, this is popping up everywhere. I don't know. Yeah, I haven't really seen too many people touting the short-term rental game. I mean, I know a lot of people are making money at it, but every city now has their own Regulations, lotteries.

You knew that was going to happen. You know, once you got the neighbors complaining, that's kind of started the ball rolling here in California, Anaheim in particular. You had Disneyland and it's like Disneyland's going to say, yeah, we don't want you to do this anymore. So then they stopped that, put a moratorium on that. So yeah, I don't think that's going to change much. I think it's going to get anything worse. And then of course, once the cities figure out, well, wait a second, We can put some laws together and plus charge a fee.

Oh yeah.

Oh yeah, we're there.

Perfect.

Let's do it.

Yep.

Yeah, you, you want a short-term rental permit? Yeah, it's going to cost you $1,000. Come and pay it, and then we're going to say no, and we get to keep the $1,000.

Yeah, exactly.

Yeah.

Where does that money go? That is the question. Um, so let's also talk about Rate risk. What if rates actually go up? Because I keep reading, okay, the Fed, the Fed's rate drops to 3%. That doesn't necessarily mean mortgage rates are gonna do anything.

No.

So I don't know how that works exactly. I should probably look into that a little bit more. But if they go up, affordability tightens further, values could actually dip again.

I don't see that. You don't see any dipping? Maybe if we bombed Iran or something, you know, you would see something like that. But honestly, I, I don't see that, especially with Trump in office and the new Fed coming online here in the next few months. Uh, they're gonna, they're gonna, they're gonna drop interest rates. I, I don't foresee them going up for any reason other than, you know, World War III or something.

Right, right.

You know, yeah.

Yeah, what— I mean, what could happen? Um, do you see a frenzy? What if they drop the rates? Do you see frenzies happening again?

I do.

Oh.

Yeah.

Okay.

I see frenzies. I think once we get below 5%, if we get that low, which I was predicting last year but it didn't happen, uh, that's still my prediction this year. By the end of the year, we're gonna get to 5%. I'll be right one of these days.

Yeah, exactly. Just keep rolling it over.

It's 12 o'clock 2 times a day. Yeah, I'll get it right.

Yeah.

Um, I think once we get to that point, then yes, there's going to be a frenzy. Yeah. Yeah.

Then again, affordability out the window. But I think the answer is just figure out how to make more.

You're not going to afford to buy your home on Malibu on the beach. Let's just say that.

Yeah.

Sorry.

Yeah, those— the ones in Dana Point, maybe if you put a mobile home there. Yeah, there are some there. I think that even the mobile homes in Malibu are a million dollars.

Yeah, I'm sure they are. Yeah, yeah, I'm sure they are.

And yeah, not a lot of write-offs with that one. But, uh, well, let's talk about what people can actually do. Okay, so you've been waiting This whole time. What can you actually do? Stop waiting.

Stop waiting. Absolutely. I mean, we've been talking about that. Stop waiting. Put one foot in front of the other. Figure out what you want to do, what your niche is going to be. Yeah. And become an expert in that field.

Yeah, exactly.

Whatever it is, you know, I mean, you could buy notes, you know, you could buy pre-foreclosures, you could buy mobile homes, you could buy single Single-family homes, multifamily homes, whatever it is, just make yourself an expert in that particular field.

Right.

Put one foot in front of the other and go.

Exactly.

Yeah.

You could come to the meetup. You can meet people.

Come to the meetup. So, oh, our meetup has changed location.

Oh, I just realized.

Yeah, you've got the old one on there.

So yeah, don't, don't pay attention.

March 23rd, 6 to 9.

Yeah, don't pay attention to that.

We've updated it. We're back at Hangar 24.

Mm-hmm.

Okay, because the sun is back out.

Yep.

So we're back at Hangar 24.

Yeah, so come out there, meet some people, one foot in front of the other.

Yeah.

How else do we got to explain it? But you might be right about this not being at the bottom thing, Joe. And you know, there's actually a guy who says that he's figured out the exact formula for where the bottom is.

Let's take a listen. A single person figured this out yet? Remember the first factor, time, that we discovered using the lost 18-year cycle? This tells us 2 to 4 years from peak to bottom.

That's the same thing you told us too.

But let's narrow this down.

Whoa.

We peaked back in June of 2022, which puts us 3 years into the cycle. But does that mean June of 2026 is going to be the bottom? No, because now we need to account for the second factor. Price. Using the triple peak pattern, we know home prices have been falling by about $1,000 or a quarter of a percent per month. But to get back to the normal 2.6% annual appreciation rate, prices still need to drop by another 9% or about $36,000. That would bring us to a national home price of $374,000. So let me show you how to use this part of the formula to buy any house you want right now. Take the current asking price and then simply subtract it By about 10%. As an example, if you're looking at a $500,000 home, 10% less would be $450,000. So you would offer $50,000 less. However, that's only in some states because bubble markets do have a different formula. For states like Texas or Florida, you have to offer about 20% to 25% below the asking price. Let me show you exactly how I use this. So I was looking at a house for $600,000. that had been sitting on the market for months. Using my formula, we got them down to about $500 grand. By the way, if you're wondering, well, Andy, how do I know which markets are a bubble market? It's very easy. If prices went up more than 40% during COVID it's a bubble market. I'll put them up on screen right now so you can see which market that you're currently in. So now that you know the lowest price that you should pay, let's go on to the 3rd factor so we can figure out exactly when the housing market will hit rock bottom down to the exact month. Using our affordability chart over the last 3 years, we see the price-to-income ratio has been dropping by about 0.3 times per year. That's because it only took 3 years from peak to bottom during the last 2008 crash. We're passing that right now, and we are nowhere near the bottom of the market. So when we put all 3 factors into this simple formula, it's going to show us the absolute bottom of the market down to one very specific date. Let me show you. Look at this calculation on screen. To find out the bottom, we take our current date, which is November of 2025. Then we add in the months remaining. To get the months remaining, we simply divide the price drop needed, which is about $37,000, by the accelerated decline rate of about $2,100 per month. That gives us exactly 16 months from today, which means The absolute bottom of the market will be February of 2027. If you want proof, just look at how all 3 factors perfectly align.

Mm-hmm.

The 18-year crash cycle is completed. Houses go back to their normal appreciation rate, and the price-to-income ratio reaches an acceptable level. Also, February is notoriously the weakest month for housing, and the exact date the last bottom happened in 2009. But if you don't want to wait that long to buy a house, use my formula now. Offer 10% below asking nationally, or if you're in a bubble market, offer 20 or 25% less. Either way, this will help you finally afford to buy a home.

Thank you, good sir. So yeah, we got about a year left.

So we'll see. We'll be back in a year.

We will be back in a year. It'll be season 5.

Season 5.

And, um, yeah, so kind of interesting. But let's say you start buying now, or, you know, start looking for deals, offer less. Um, you may be able to find something on the MLS, maybe able to get—

I, I don't know that anybody's gonna accept an offer at 25% less than what they're asking.

I would, I would say, well, part of his formula was 10%, or if you're in a bubble market, 25%. Maybe 10% would be fine.

I think in a bubble market it's even worse.

Oh.

Because like we're in a bubble market here in California. If I want $1.3 or $1.4 for my house, I'm, I'm not going to drop that 20, 25%.

No.

You know?

No.

Maybe if you were to offer that to me, maybe, you know, that'd be— it's a, yeah, a kind gesture.

Okay, okay.

To reduce my Capital gains taxes as well.

Oh, all right. Have you thought about selling now or in the near future?

Uh, yeah, I have.

Okay.

Yeah, perfect. Uh-huh. I have to look at my, you know, life cycle, right?

You know, so no, you got a lot of life left, so you don't, you don't gotta worry about that. No, no, I know, I know for sure. So yeah, that was kind of interesting. Um, the guy's using data. He said it was a lost 18-year The cycle. I don't know what that means, but, uh, Homer Hoyt. Good old economist Homer Hoyt.

Homer.

So now, um, for the new investor, stop waiting for rates to hit 5%. Get pre-approved now and know your numbers. Um, or find a mentor or a partner on your first deal. Don't go it alone, especially if you're new, and make sure you're doing it right. For the experienced investor, consider seller carry deals in this rate environment, looking for sub-2s, looking for assumables, looking for seller finance so you can be a little bit more flexible.

Yeah.

And just see—

Yeah, be creative. I mean, just like you were today with that guy on the phone. It's like, I don't want to do any Think creative, you know. What about, you know, if I paid you back in 6 months? Oh, okay, well, yeah, I consider that.

Yeah.

Hello?

I know, it's just like when I've done so many calls, the no doesn't even mean no because it's just he doesn't understand. Yeah, necessarily.

You gotta explain it.

Yeah, gotta explain it.

Explain it.

And then they're like, oh, that's exactly what I want.

Yeah. Exactly.

As long as we can get it off my plate.

I get this headache off of my plate here.

Yeah.

Heck yeah. Let's do it.

Yeah. Because I think they've listed it. I think I talked to him maybe 5 months ago. Then I passed it to Lauren, my wife. She listed it and it's been sitting there for like 3 months. So he's already waited his 6 months practically.

So now— Was it vacant or was it—

No, there was a tenant in there and it just became vacant.

Ah, so there's another motivation there. He's not getting that $1,500 anymore. Got it.

So now—

Oh God, it's so good timing.

Good, good timing. Yeah, I mean, he was having trouble. Basically, they listed it and he's like, I— because of the tenants, I don't want anybody walking it. I don't want anyone looking at it. They can just drive by. So obviously every call was, oh, can we walk it? Can we see it? So it was just at a standstill.

Yeah.

So, uh, you know, and then you just follow up and bada bing bada boom, make the deals happen.

Yeah.

So I'm talking about people. So are we at the bottom? The answer is no, apparently.

Um, not yet.

Not yet. So hold on to your hats. We're in, uh, you know, wildest ride in the West. So, uh, I guess the recap here is get off your bum. Partner up if you need to. Reach out to us. Oh yeah, reach out to us. Producer, producer, I'm producing. And, um, you know, take Joe out to lunch and, uh, figure out how you can get in the game. Please.

Please.

Please. So come out to the next meetup on March 23rd.

Hangar 24.

Hangar 24. And make sure to share this far and wide with any new or experienced investor in your life. And we will be back next week.

We'll see you then.

Thank you, guys.

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