All Forum Posts by: Trevor Richardson

I anticipate I’ll hear investor clients pausing buying activity for the next couple weeks, to see the direction of markets. 

However the underlying issue of lack of supply and high demand for housing (the US is still several million units short) won’t be changed by conflicts abroad or even here. It’s essentially a US infrastructure issue that’s here to stay. I remind our investors to continue to analyze deals. Interest rates certainly have an impact on deals. If rates start to go down, buyer activity and deal flow and prices will pick up. 

We have severe topography issues so the market can’t sprawl. That creates a land shortage and with land prices so high it’s hard for the market to keep up with pure migration and growing industries like vehicle and battery manufacturing. There are 12,000,000 people in N. Cal that will always back fill Reno. Our demand for housing is extremely high but we just can’t build enough and fast enough.

Outside of the obvious answers, everyone suggests Ohio… I would look out West. The markets are on sale out here. It’s a good time to pick up inventory before it reverses. 

I’ll shamelessly plug Reno. It actually matches everything you described above. No state income tax, landlord friendly, we are a vacation hub. Why Reno? We are the first city outside the most populated state, 3 hours away from Silicon Valley which is about to have a renaissance from AI. The Bay is per capita the wealthiest place on the planet. Guess what gets fed all that excess people and money? The first stop in the next state, Reno.

Not enough? Tesla is about to build the semi truck factory onto the gigafactory here in Reno. Which for a market still under 700,000 people is going to create an enormous need for housing. There are good deals today here, we are about to have a housing crisis again and anyone picking up multifamily here is going to look smart in 2 years. In reality we don’t even need more jobs, because we constantly have migration from the wealthiest state and area in the country. 

Cash flow is one thing, it’s important to a segment of investors but not all. If you consider the market you are in, it’s housing stock, economics etc… and are able during this time to get something 30-40% below what was trading just 20 months ago, that’s a great investment. That may happen where you are (I’ve seen it in our market right now) where sellers have to sell for other reasons and are taking way below asking because every investor is on pause. Except a few.

Those few are looking down the road because when things stabilize that investment could pop right back up 30-40% and they will look like a savant. You sacrificed cash flow in ‘23-‘24 AND took some risk but came out a couple years later with an amazing deal. The comment you now hear in 2025 is, “man I should have bought in 2023!”

I think it will a bit. I like the house hack model. My only concern is cash flow with a 95% loan. If interest rates are nearing 9% by the end of the year is may be scary on the cash flow side. If this was in effect in 2021 we would have sold every single SMF deal in existence haha.

Negative cash flow you say? Welcome to 2023!

But no seriously it’s not your calculations. Putting 8.5% interest rate into the current market snaps every model we have going. I think maybe by the end of the year we will be near 10% for investment properties. Small multifamily owners are going to have to reduce prices quite a bit if they need to sell. 

Single family is actually going up right now (!) so the rents have to chase the interest rates and appreciation. Weird times!

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I don’t think it’s market dependent here is why. Of all the online “methods” house hacking or small multifamily hacking really works. It takes sacrifice and actually does one of the hardest things in real estate investing, ADDS VALUE.

To me house hacking is a flip so you have to have a good exit strategy. Nobody wants to stay in the house hack. The Midwest and Southeast are popular for cash flow. For house hacking I’d maybe start at the more pricier markets or fringe markets where you can get something beat up, fix and flip and sell for higher. The Midwest and Southeast have good buy and hold metrics, maybe not really for flipping. There is a reason some home sellers in the San Francisco Bay Area put $400k into their house (before selling) because they know that doing that will yield more return and sell their $1.2m home for $1.8m. Extreme example but making a house sellable in a higher value market is a good tactic to me. 

So I think the pricier markets something like Reno, NV (no bias haha) where there is inventory that needs a house hacker but we can still see the margin and exit and realize that hard work sweat equity. 

This is a national item. It’s common that this topic is misrepresented.