What Trump Means for Real Estate in 2025

All right everyone, I just realized as I hit start here we haven't done a little intro yet, so let me get that rolling. I'll see you guys in about 40 seconds. And we are back. Welcome, YouTube. We are back in Texas. I spent the last couple weeks, uh, actually up in Washington visiting family. My newborn son was up meeting his grandparents, which was awesome, but it feels good to be back in studio, back to the normal schedule. Uh, by the way, we're going to be rolling on a, uh, on probably a new schedule since I'm down here in Texas so often. We may move, may move considering, uh, the lives to 3 o'clock Texas time, as 5 o'clock seems to keep getting in the way of just about everything, and I don't want to miss lives ever. So stay tuned there. Rob asked in the chat, where's Cody? Well, as, uh, as many of us know, I bought Cody out of the company in January a while back. However, I just posted a video on that and how our partnership looks today, why we broke up pieces of the partnership, why we used to own $30 million together, we now own $8 million of real estate together. What's next for Cody and I? So, uh, if you guys are still, uh, still asking that question, which I get very often, uh, go ahead and check out our latest video on YouTube. I believe we posted that here on, uh, I think that was yesterday actually. That was on Tuesday. Uh, let's check that out. Cody is of course already here in the, uh, stream. So there he is. Look at that. The man, the myth, the legend. Always, uh, always present. Which is awesome. Uh, for those who don't know, by the way, I'll share, I'll share it on the live. You guys can watch the whole video. But, uh, we, we have a policy with partnership, and I think this is absolutely amazing. When you're partnered, it is impossible to have a perfectly even partnership. When we started, this was Cody Davis's strategy. He had figured out how to do something at 19. I was still trying to figure out at 29. I had a little bit more money, a little bit farther in the career. Didn't— I had like, I had like 2 rental units when I met Cody. Then he helped me get to 4, and then we went together and bought a 38, a 7, a 12. And I found some of the deals, he found a lot of the deals, but Cody added a lot of value in the beginning. As we do the systems and operations, I start adding more value through the companies and how those were run with the employees and some of the overhead. And then as we go into acquisition phases, Cody shines again. That being said, it's never equal. There's times where Cody was the MVP, there's times where I was the MVP. You don't renegotiate until you hit the goal. We got to 100 units, that was our original goal. We looked at our pieces, said, what do we want to do? Let's keep building the PM company, let's keep pushing multifamily strategy, let's push it to 200 units. We had so much fun, let's try it again. And that's what we did. We went out and we got to 200 units, we looked at the pieces. I retired my wife, we're both working in the PM company, and we said, hey, we have some imbalances here. We've now hit our goal 2 times over. What would it look like to adjust the pieces? That's all we did. We adjusted the pieces. Cody and I still do projects together. Cody and I and Annie were all on the phone today working on our projects. But that is, that is in a nutshell what happened in the partnership. Cody's bought deals in Tennessee, in Indiana, and all over Washington State. I've bought deals all over Washington and all over Texas. I just went under contract for a 76-unit today, closing on the 44 in 2 weeks. We did a lot of things together in the partnership. Cody's still here on the channel, and we'll have him on. We'll have him on in a live here very soon. Actually, Cody, if you're still watching this, uh, you and I need to— we haven't— yeah, I haven't had you on the pod in a while. I need to do a catch-up episode with you because you're doing a lot of cool things. I think those are things worth sharing. Uh, that being said, today's topic: what does the Trump presidency actually mean for real estate going forward? I think a lot of us aren't surprised by this. We expect relatively good things. Uh, it happens to be a president who owns a lot of real estate. He loves real estate. If you've ever heard this guy talk about buildings. That's really where his passion is. He loves building, he loves owning, he really likes real estate. Uh, there's a few things that we're excited for. We're also going to have some massive impacts to the economy in general in the way of tariffs. And so I'm going to lay out what I foresee happening here, and then as always, we'll answer you guys' questions in chat as they come in. Uh, number 1, I'm very excited about this, I'm very excited about this. There is talk, and I'm saying a lot of talk, about them bringing back the 100% bonus depreciation. Now this shouldn't be too surprising. Trump benefits from this. All of Trump's friends benefit from this. Real estate in general benefits from bonus depreciation. There is two-edged sword. You're basically, if you don't know what a bonus depreciation through way of cost segregation is, instead of the standard 27.5-year depreciation that you'd have on a building where you write off the building over that amount of time, you can accelerate it by writing off different categories of the building, such as the AC, the fridges, the appliances, the cabinetry, the things that don't actually last 27.5 years, you can write 'em off on an accelerated schedule, which can help you defer or pay less taxes to the government in a given year. Cody and I have used these a ton. It's reduced in value. It looks like we may be getting those back. I'm sure he's going to push for them, whether it goes through or not, we'll find out. But we have an office that is specifically real estate friendly. The other thing you're going to see prior to Trump, the Fed has already begun decreasing rates. Very slowly, very measured. They're going to receive a lot more pressure from the Oval Office. Now, they don't directly control the Fed, and there's some debate on whether or not Trump can actually fire Jerome Powell, who he, I believe, originally installed. There's been a back and forth on that, and I've seen some funny videos where Jerome's like, no, I'm not leaving. But he can apply pressure to the Fed when the executive branch has certain objectives. They can push through things. There's going to be a lot of pressure to continue to decrease rates. Decreasing rates is something that I think all of us are quite excited for and obviously good for real estate, unless, unless you're just getting into the game right now. Because as interest rates go down and money gets cheaper, prices typically go up. If there was a time to buy, it'd probably be right now. In fact, I went under contract for several deals about the time that we knew what the results of the election were going to be. As soon as it became clear who was going to be in power, It's like, ah, decreasing interest rates, there's going to be some inflationary moves. I'll explain those in a second. But if there is increased inflation, we need to hedge against the dollar. Great way to do that is to take on more debt. And lower interest rates, if I buy a deal now and I can refinance it into lower interest later, I get to keep my current price, but I get a new interest rate. I like that a lot. So two big, big pluses. But if you're just getting into the game and you're hoping to build your portfolio over the next 4 years, the earlier you do it, the better. Like, if you've been waiting to jump on, like, last stop right now, stuff's going to start getting more expensive, which is great if you already own it. So get your deals done now. There's still a lot of people losing real estate. There's still a lot of deals on market. The economy absolutely demolished a lot of the really speculative players, people who are banking on appreciation. There are still people actively losing real estate. There are still deals out there, but you better get them in now because as policies start getting pushed through, it's going to get more and more expensive over the next 4 years. I think that's pretty well documented how this is going to work, especially when you look at the last time he was in office. This time they have even more power because of the way they've stacked the House and the Senate. Another thing that's really interesting that I think we need to discuss, a large part of this policy that I actually, while I partially agree with some of it, we're gonna get really aggressive on tariffs. And generally speaking, tariffs aren't fantastic for anyone. There's pros and cons. What they're gonna end up doing is they're gonna make everything a little bit more expensive. We place a tariff, there's a reactionary tariff, prices prices go up artificially. I'm a small government guy. I'm not a fan of this. While I do prefer for my businesses our current electoral victory, I'm not a huge fan of tariffs in general. But here's what they will do. They will make the supply chain more expensive, which means the cost of the build is more expensive. Real estate, if you're— boil it down to its basics. The reason we love it is because you're providing housing for humans, and humans will always need housing. It's like the grocery store. It is a needed good where people can come to you, the landlord, and negotiate a market rent for them to be there. Bummer with lives. If you need to sneeze, you got to figure out how to hold it in. When we're looking at the tariffs and we're looking at things in the supply chain getting more and more expensive, The cost to build goes up, less building tends to happen. And right now it is really expensive to build already. And there's a lot of areas that have been overbuilt. So we're in a down cycle for development. This has upward pressure on prices when supply is not increasing and demand in a lot of these areas are increasing. Anywhere that you're investing that has steady population growth, you will see less development, which means throughout the next 4 years you can expect more appreciation. Than would be natural because we're doing unnatural things to the economy. Tariffs are not a natural function of an open and free market. So as we start to stack these on, that's what we anticipate. So we're going to see upward pressure on pricing, downward pressure on interest rates. We're stacked for a heck of a lot of appreciation. This could be a really wild ride if you already have some real estate. And if you don't, good news is none of this stuff happens immediately. Donald Trump sitting down in the Oval Office does not change anything. It takes time to push things through. If you're trying to get in real estate, you're trying to build your portfolio, the good news is you still have time, but not as much time as you might have. So jump on board now if you're trying to figure it out, like get around people who are playing the game and go, go, go. I'm gonna go read a few of the questions in the chat here. Um, we had Cody in here earlier. Uh, yeah, uh, Trump, Trump, that means the blue hairs are in therapy. Look, either candidate wouldn't have been horrible for real estate. They all would have had— here's what we know about both sides. Both candidates really like to print money. I, I know the proposal is we're gonna start paying down the deficit. I don't think it will happen. If you look at the last time Trump was in office A lot of money was printed. If you look at Biden, money was printed the whole time. Uh, they print a lot. I think inflation and that battle between inflation and the government's tendency to just print its way through its problems, I don't think that's going away in either, either candidacy. I really, I really don't think it would have had a major impact. Uh, both have some good and bad policies for real estate. Obviously, a Donald Trump presidency is going to be a much pro— more pro-real estate president. We just look at who it is. I think this is overall, for us real estate investors, I think it's a really good thing, especially us established players. It's a very, very, very good thing. Emmanuel asked, how do you maintain big ticket items in your apartments like HVAC, water heater, etc.? Do you have your tenants, uh, call service providers directly? No, no, you do not, because they don't own those. That's the beauty of renting. When you rent, you don't own all the appliances. When something goes out, you call your property manager. Now, as a landlord, you can either manage the property or you can hire a property manager. Most people do that. I came right down the middle and I started a property management company. So I have a team that works for me and I own equity in the company that does that. And I do those in markets where a lot of— this is something I've learned from running the, uh, the Owner Meeting podcast. I've talked to a lot of owners, same problem. You go into secondary and tertiary markets and all the property managers suck. I have found that I buy a lot of real estate in those markets. They cash flow fantastically, but I can't make money with bad management. I've been in a position where I've been able to build my own team and take my own team and outperform a lot of other property managers. I'm taking on a lot of business in Texas right now, and we're scaling very, very quickly, like super aggressively, because we're really, really good at doing this. It runs profitably. It's not a huge profit, but it's a company that runs profitably. So technically I do get paid to manage the properties and the properties around my buildings. It's been helpful for me, but either way, you have to come up with a solution because your tenants are not responsible. What they're going to have is typically going to be a phone number and a portal where they can log in and either type out their request and then into their tenant portal, say, hey, I got a maintenance request, we got to get this fixed, or they're going to call you or your PM depending on who's managing the building. But it is your problem. So water heaters, HVAC, any of the shared common stuff, uh, appliances break, an oven breaks, the fridge goes out, whatever it is, that's on you, the landlord. That needs to be in your budget and in your numbers. When I say long-term cash-flowing fixed-rate debt, when we're going for cash flow, you have to budget that things will fail. Windows do fail, appliances do fail, ACs do go out. You have to budget for that. Some people base their numbers off of this like fake pro forma, which is a pro forma, is just fake imaginary numbers where something could be, and they skip expenses like basic maintenance. And you wonder why your deals never cash flow because you're not budgeting for things happening. And one thing that will always be true of buildings, things happen. Even for you who just own a house, I imagine at some point you've had a garbage disposal fail or a water heater leak or an electric problem happen. Even in a single unit, you own that long enough and things will fail and they will have to be fixed. Multiply that by hundreds, things do break. You have to factor for them. How do you find the current prevailing cap rate in a market versus its historical average? You go to a trusted current data source. I still, for cap rate, I really, really, really like CoStar's data. Now, I would not pay for CoStar's data. It's very expensive. I would, however, find a brokerage, which is usually gonna be the larger shops that have access to CoStar, and I would form relationships with brokers so that they can use actual real-time data to find that. If you don't have a broker friend, there's another group that does a whole lot of real estate, and it's called a lender. A lender's going to be associated with appraisers. They're gonna see a lot of deals coming down the pipeline. They're gonna see what cap rate was used to value deals. If you call a local mortgage broker or a local lender, They have a very good idea what cap rates are coming out at because they're looking at these appraisals every single day. Duplex Dave. I'm sure, man, we have Dividend Dave and Duplex Dave. This is exciting. I'm struggling to get Section 8 to pay fair market rent in my market, Oklahoma City. This is interesting. I've heard of this. Uh, it's never happened to me, but I've heard of this happening to people. Uh, any tips or advice on how to address this problem? I know they have a backlog of about 17,000 people seeking housing assistance. Thanks. Um, so here's what you do. The city, you have to understand why they are not willing to pay fair market rent. The way the voucher program works is if someone has a voucher and they find suitable housing, housing will pay up to a maximum of fair market value, fair market rent, I should say. To place that tenant. Housing authority can't come in and say, well, I've decided that your rent should be lower, unless they have— they do have some power. They can negotiate if they have a valid, like, a valid reason to. So if it's like, hey, your unit is in significant disrepair, it technically meets standards, but you have actual problems, you need to fix those problems before we pay full market rent, they can do that. But they A housing authority can't just come in and say, no, we're not gonna, we're not gonna pay what we've posted publicly that our maximum is. That's why they post them publicly. It's based on actual data for what market rent is. They have to have a significant reason. Another reason I have seen is if you have like tiny, say, say all the neighboring properties have 800 square foot units and you have a 300 square foot unit. They can make the argument that, hey, this is not fair market rent for that tiny of a unit. This is unique. And while it may have one bedroom technically in it, this is really a smaller unit. They have some wiggle room, but generally speaking, unless they give you a very specific reason, they can't just withhold rent because they feel like they should pay less. They don't get to negotiate rent. It is public. It is posted. That is why we have the system that we have. Rob wants to know why Texas. First of all, when I landed yesterday, it was about 70 degrees. I came in from Washington State, which was like unbelievably colder than that. I had to defrost the car. Um, number one, absolute number one for me in Texas, it is warm. Uh, second, the food here is amazing. The— I— we have better food than Washington. We have better weather than Washington. We have astronomically better landlord politics than Washington. While we don't see the same appreciation that Washington does, which is also very politically driven, there's a reason that prices go up and up and up in blue states. It's not just because it's awesome to live there or just because they attract tech jobs, which they tend to, but they actually put policies and restrictions that make it harder to be a landlord, which gets passed through to the tenants, which increases rent, which increases pricing. There's a lot of factors at play there. But while I don't see as much appreciation in Texas, I invest in awesome areas that do have high appreciation. And are much easier to manage. So for me, it was more of a geographical— I love the area. I love the people. I love the food. I love the weather. I love the business laws. I love the real estate laws. I have 3 other companies outside of just real estate. Texas is a much better fit. It's America's America. Manuel, does AppFolio give you your own PM website, and how much per month is AppFolio? AppFolio's cost is actually gonna be specifically priced off of how many units you manage. So if you have a ton of units under management, it'll be one price. If you have, uh, you know, you have less— you know, there's different price breaks. So I can't give you the current Appfolio cost because it's going to completely depend on what you're managing. I don't remember the exact cost per unit that they have, and they do have a minimum, but you could easily call them and get quoted. What you do have to have is at least 50 units in your portfolio, and I believe the price breaks come in at 250, 500, and over 1,000 units. You get a little lower pricing for having more volume with them, but they price it by the size of the portfolio there. So every property I manage, every single unit we onboard comes with an increased cost. They can build your website. You should go through another third party, by the way. I use the company called PMW Websites. Uh, they're fantastic and they will link to AppFolio. AppFolio has a website builder and a team that will do that. It's overpriced and they underperform. You really want to use a professional team for those things. Sean Connolly, I'm making a career change on a 4-unit property and I've been successful at self-managing for the last 14 months. I'm looking to get into property management. Is it worth getting a CAM certificate? Here's what I found with just about any certificate. Usually, usually no, unless you have a very specific reason to. For me, like I did the thing where I got my broker's license before I became an investor because I was like, this is what I should do. I should get licensed in real estate. It will help me move forward. And guess what? I didn't. You can be a certified apartment manager if you find that that is somehow beneficial for you. But I have found that spending my time on the actual business skills was a far better use of my time. If you can do a good job on the accounting side and a good job at the tenant and owner communication side, which means you probably need to hire some people because usually people aren't equally good at the left brain and the right brain stuff. There's a heavy math and tech base that is needed in property management. There's also a huge people base in attracting tenants and managing owners, and managing owners is a huge part of being a PM. Um, I'm sure you'll learn some stuff, but I found that like my skills in marketing were more powerful. So I have a lot of people who have a ton of certifications and they're horrible property managers. My ability to one, execute is extremely helpful. So we come in and we've been successful in execution in, you know, multiple states— Washington and Texas. We're doing really, really, really well. Uh, too, my ability to market my company, my brand in the markets that we're in— that is a skill that is worth everything. You can have a whole alphabet of, uh, you have a whole alphabet of stuff. I'm just texting me. No emergencies. I'm gonna— I know I'm in a live and I'm texting, and this is like the one person who I need to text back. Tell them I'm in a live. There we go. Uh, but you can have a whole alphabet soup of certifications and you can have all this stuff. Odds are whoever's the best at managing, the best at marketing, is going to take the market share. And if I move into a market I'm going to absolutely annihilate my competition. And that's what I'm doing in the, you know, multiple markets in Texas, including Stephenville. I'm after Stephenville, or I own over 100 units in Stephenville after next week, which is really exciting. Rob, have you stocked up on your PPTPs? Oh yes, I have my, uh, my little son. I typically just, just toss a, toss a burp cloth there, but that has, uh That has saved me from getting peed on many times. I do have a very little boy, and that is absolutely something that happens. That was the, that was the dream, by the way. Uh, an earlier question was why Texas. Uh, Nicky Rob was the one who asked that. I want to raise a son in Texas. He's actually born down here in Texas, so when we moved, we almost immediately had the kid. And, uh, I have a native Texan. I'm very proud of that. I'm happy to have him down here and It doesn't hurt that I spent just under $1 million on this house. And this house is about 3, almost 4 times the size of my house in Seattle at almost the same price. You also get a lot more real estate down here. But yeah, being a dad, coolest thing I've ever done. Like, sure, buying like 300 rentals is interesting. It's unique the way that we did it without money. I think, you know, we did something kind of cool. Making another human, million times cooler, million times cooler. Best thing we've ever done. Duplex Dave, I've been using Hemlane for my local properties and I self-manage. Awesome affordable product. Yes, if you are using— I've heard good things about Hemlane. They actually asked me to advertise for them. I turned them down because I don't use them. I don't, I don't recommend anything I don't use. I just signed a contract with, um, what's it called, uh, Magic Mind. They do a whole bunch of— they have a bunch of sponsors, uh, but it's a product that I actually like and use. So I'm like, sure, I'll talk about how I use your product, but I'm not gonna I don't ever endorse anything that I don't actively use. But Hemlane is, man, I'm popular right now. Hemlane is, Hemlane has had really good reviews from everyone I've heard. My friend Dion has used Hemlane pretty extensively, really likes Hemlane. So they're affordable. And if you are smaller in your portfolio, so I say less than 50 units, it's a really good piece of software. I also can recommend Buildium. I've used Buildium many times. And they'll take smaller portfolios, really, really user-friendly. But Hemlane, Buildium, Mapfolio, these are all solutions that you can use to manage your property. My good friend Luke, do you have student renters? How many miles do you think you should be living from campus? Not in the city with a 15K population. Well, it depends. Like in Waco, Baylor is a huge college, so the larger the college, the farther out you'll get students. Sometimes students actually want to live farther off campus. Uh, so it really does depend on campus size. In Steenville, Texas, that I invest in, uh, very heavily, that's college town. I do have college students. They're moving into my apartments, uh, steadily. When I first bought them, there were no college students. Now we've done a good job marketing to the colleges, so we get more students. We're like within 2 miles of the college. If you go anywhere within a 5-mile radius though, on any college of a decent size, you're gonna get students. The closer you get, that is a huge draw for students. If they can walk to class, that is the number one— like, you're going to get a ton of students if you are walking distance of the school. Easy walks. I had a 10-minute walk to campus my entire college at WSU. And if you've never been to Washington State University, it's on a giant hill. It's on a very, very steep hill. So your location there really matters. If you live higher up, you do less, uh, less of the up and downhill. You live at the foot of the hill, You have to go up. So location's gonna depend on your geography and the area that your college is in. But generally speaking, within 5 miles and every mile you move in, much, much, much easier to rent to students. That's funny. Texas schools have Chick-fil-A. Washington could never— I've never actually been in a Texas school, nor will my kid. There's a 0% chance that we'll do public school. But, but yeah, Chick-fil-A just came to Washington recently, like not that long before I moved. They got our, we got our first Chick-fil-A in Bellevue. Never had Chick-fil-A in my life until we had my son and they had Chick-fil-A in the hospital. Turns out actually pretty good. Omar, what's the average cash on cash return in Texas? Oh, The average— every deal is unique. Impossible to answer that. I can say personally, for me, my average cash-on-cash return after I've managed a year for at least 1 year is about 15%. That's been pretty standard for most of the deals that I've done. We've done better than that, we've done less than that. We have deals that have more value add, but it is completely unique to your deal. Your cash-on-cash return is one piece. And then when I say cash-on-cash return, I am looking at the cash flow only. I'm not looking at the exit. I'm not looking at any additional cash out pieces. I'm not— I don't sell, so I don't have a future sale in there. I have cash-on-cash return. We're saying, hey, just on the annual cash flow that we make on the money invested, usually right around 15% is the most common for me. It'll look different for other people. Well, I was in Toronto, seriously consider investing in the States. We have better debt products, especially when you move into bank debt. Excuse me. We have better loan products than are available in Canada. Now, seller financing, whether they call it vendor financing, is absolutely a thing and more common because some of the bank products do kind of suck up there. Investing in the States, I think, is— it is a good time to do it now. We have a lot of— we have a lot of things that are going to impact price to go up, and as values go up, it's nice to hold a lot of real estate. So I absolutely, uh, absolutely would endorse investing in the States if you're up in Canada. All right, that's it for the questions we have today. I didn't want to run this thing super, super long because I actually have another meeting I have to run to. Again, I'll announce on, on the YouTube channel and on my Instagram what the new times will be, uh, because I, I think I want to bring this a little bit earlier Texas time. I'm finding with my son's sleep schedule and with just meetings, 5 PM is a really weird time central for me to try to go live. So we may move this thing a little bit, a little bit earlier. I'll keep you guys informed there. I'll answer this last question, we'll wrap. Would you mind going over, uh, deal structuring of one of your deals specifically on how you leverage seller financing to cover the balance due on, uh, close? Yeah, well, um, I mean, I've 100% seller financed the deal, so that covered the balance due. There was no balance due. We had like, you know, we had to record a title, but there's no lender fees, so no points there. Cost like $1,000, so I wrote a check for $1,000 and bought a property. That's one way to do it. But generally speaking, you either need to bring money to the table, you need to borrow additional money. So if you have a seller finance note and you can take a second, you can do second position debt. It's not uncommon. Or You bring on an equity partner with a strict clause that says within a set period of time I can buy you out at a fixed price. So we did on the 38, an actual example, 85% seller financed. We needed 15% down, $2 million purchase, so we needed $300K. Found 3 people with $100K. In retrospect, should have done 1 person with $300K, but it's not what happened. We did 3 people with $100,000. Uh, we said, hey, we have the exclusive right to buy you out anywhere within the next 5 years for double what you put in. So they put in $3 million, we can buy them all out for $6 million. That is what we ended up doing, except we did it within the first year so that we could refinance, pull money out, and renovate the rest of the building, which means we effectively borrowed at like 100% interest from our investors. While they were very excited with that return and we made a lot of money on that deal, uh, it appraised for about $4 million after we bought it for $2 million, that was a really expensive lesson on how to structure your buyouts. If you buy people out early, it should be negotiated at a lower buyout than if you actually run the full 5 years. Time value of money. I financed the house I lived in conventionally because I have a lot of real estate. I showed them my Schedule E and the tax returns for every single, all 23 LLCs that I own. I was arduous, but I just, I've been playing this game long enough now where, I mean, we have a lot of cash flow, so I qualified out of the cash flow from my existing portfolio. If you want to get a hold of me, easiest way to reach me is on Instagram @ChristianOsgood. Shoot me a DM, I'll respond to you there. All right, I will see you guys later, and I'll announce the new live time if I do change it next week. Uh, I will announce that excessively beforehand. Thanks for joining, guys.