The Return of “Easy” Real Estate Deals? 2026 Could Get Even Better

0:04The end of 2025 is here, which means it's time to look back and reflect a little bit on what worked this year and what tactics that we enjoyed that we're going to carry into our strategies for 2026. And today we're going to do something a little different. We are sharing our favorite things of 2025. It might be a trend that you're obsessed with, a headline that changed how you invest, a portfolio pivot that really paid off, or just a big lesson that we think every listener should carry with them into next year. To do this, of course, I am joined by Henry Washington, James Daynard, and Kathy Fecky for our ideas, strategies, and moments from 2025 that we're going to bring with us into next year.

0:50You're listening to On The Market. Let's jump in. James, Henry, Kathy, welcome to the show. Thank you all so much for being here. Every year, my wife's family does this big Christmas Eve party, and they do this thing called Favorite Things. And rather than just doing like a white elephant or like a secret Santa, you bring three of the same thing. It's something that you really like. And then everyone trades them. And every year for the dudes, it's just either you get a three pack of golf balls or like a six pack of beer. Everyone men are just all we have is two things that we like. So simple. Yes.

1:24But it's a fun game. So we thought that we would do something like that. We won't obviously do any trading, but I'm curious about your favorite things of 2025 so that we can share them with the audience and hopefully they can learn something about what they might bring into next year. That sound good? Yeah. Yeah. All right. Well, Henry, I'm going to pick on you. What is your favorite thing about 2025 that you're bringing with you? Well, look, Dave, as someone who enjoys finding real estate deals and someone who wrote a book on helping other people learn how to find real estate deals, my favorite thing of 2025 by far has been like the return of being able to find a good deal without having to to be this professional investor like there have been great deals on the market yes there have been great deals if you're just willing to do a little bit of work and reach out to some sellers there have been i've bought more deals from wholesalers this year typically that's been a harder thing to do.

2:29It's just the availability of a quality deal seems to be back. And it was gone for a few years. You had to work really hard. After four years of this show, the name of our podcast finally makes sense. On the market, you can now actually buy deals on the market in 2025 going into 2026. Do you have to still negotiate? Yes. Do you have to put in some level of work? Yes. If you want to find a deal on the market, you still have to be willing to make an offer at substantially less than what somebody may have it listed for. But what we're finding is there are more people willing to say yes to those than there was before.

3:08It used to be this needle in the haystack drill, and now it's not as challenging. Like last week, I probably made 10 to 12 on-market offers, and these were just verbals. We weren't even submitting the actual written offer. We just had my agent verbally, and we say verbal, but they basically sent a text message to the listing agent saying, hey, my investor client is interested in this property. We're willing to make an offer of X. I know it's not what you're looking for, but we can assure you that we'll close fast. It'll be all cash. We won't ask for any repairs. And just sending 10 to 12 of those text messages, I got two responses where I was able to go look at the properties and then adjust my offer.

3:52And one of those we're about to put under contract. That's an amazing number to make 10 verbal offers and to have two responses and get one under contract. That's easy. Join me on the lazy side of investing, Henry. The water is warm. It's so nice over here. And the deal we're going to put under contract, no work. It is completely renovated. It will just be a turnkey rental. I'll get it with 60 grand of equity. I mean, this is the best favorite thing. Now I switch mine to Henry's. It's so true. This is the best one. This is the best thing that's going on in the market right now is that you can find good deals.

4:31It just feels so much easier than it has. It's funny. I do the state of real estate investing thing every year on BiggerPockets, and I've been writing it over the last couple of weeks. And I was like, I think investing is just getting easier. I think that's what's happening right now. Now, it's not easy, but it is trending in that direction. And that feels good after years of it just getting feeling harder and harder and harder. I just think on market's always been available. They're just less hairy right now. It's just like a little bit simpler because they're on market distressed homes. You know, like people, not everyone sells those to an investor or goes to a wholesaler.

5:10Like those still hit the MLS. But there are decent conditioned properties, like properties that you could buy with a conventional mortgage on the MLS that actually makes sense these days. That is different. That's a good favorite thing. And it's really excitement about what comes after the deal. Yes, it's amazing that now it is, air quotes, easier to be able to find deals. But what that truly means is we're starting to see the return of year one cash flow again. like that's kind of gone away over the past two to three years where you were having to wait until year two, three, year five before you're really seeing the cash flow numbers.

5:54And you were really just breaking even if you wanted to be a buy and hold investor over the last couple of years. But because of this opportunity of being able to find deals easier, if you're willing to do just a little bit of work, year one cash flow is returning in a lot of markets. Now, maybe not in, you know, California where Kathy is, that's still a challenge. But in a lot more markets, you're able to now buy properties without having to do a ton of work and get cash flow in year one. It's, we're back, baby! We're coming back. It's slow, but it's good. Yeah. All right. Well, Henry, I think you stole the show already going first with this one.

6:32But let's move on to someone else's favorite thing. James, what's your favorite thing? A couple of things I do like about this upcoming year that was a great experience for me this year was one, because there's more deals, like you're saying, on market, you can buy a little bit easier flips right now. You don't have to go as deep to make the return. But my favorite thing for the year, because I feel like this is what everyone's talking about, is the expenses have been increasing all the way across the board. And I love being a private money lender right now. because no matter what, like even if you're not taking it, you can do it in so many different ways.

7:08And they've been great because they freed up time for me where I've done some passive equity deals, but also just the steady interest rate, the consistency of it. It's the only thing that hit 100 % of what I thought it was going to do for the year. I mean, I love it too, as a concept. Are you worried though, like with flip sitting on the market, like, are you worried all about the operators being able to execute deals right now? No, you have to vet your people, right? Like I do seconds. I do 100 % first, but it has to be for the right operator. In any kind of deal, if you're investing with the right operator, you might actually charge them a little bit less for that kind of leverage, but they're bankable, they're financeable, and they have assets.

7:47And they will pay the bill. And to this day, I've never lost money on a hard money loan. And we've been lending since 2009. You have to do it correctly. I saw people get smoked in 2008 doing the bad kind of loans. seconds, thirds, greed, greed, greed, chase the rate. But it's steady. You don't have to worry about rising taxes, rising insurance, eating up your cash flow. You don't have to worry about sitting on the market too long, paying too much in an interest expense. You are the interest. And at the end of the day, being the bank last year was the most profitable thing. Wow. You know, some people like James operates his own hard money lending fund.

8:23I do hard money investing just in other people's funds. And even that's great. You don't earn as much, but like I'm in a couple of funds and they just pay every month. It's just, that's a real mailbox money if you want it. Like the minimums are typically expensive, but I know a lot of good operators who have debt funds right now and they do really well. It's a great way to make cash flow. And it's way for me personally, I think about like trying to balance my long-term investing approach, which is what I do with most things, buy properties I want to own for five, 10, 20 years, but I'll take some cash right now.

8:56And the hard money rending works pretty well for that. So I think it's great as well. And I'm glad you have such an optimistic outlook for it going forward as well, James. Well, the cool thing about it is you can balance like it's hard to make cash flow on a single family right now, but you can park some money there. Or even if you're losing a little bit on that, you can offset it by putting it in a hard money fund because it's kicking out the cash flow to cover. So you can do like a blend to get a really good rental property. But you have to vet your funds, vet your operators. Who are you putting in the fund?

9:27What assets do they have? What are they lending on? What's their average duration? Don't just take someone's word for it. Dig into their portfolio and what they're lending on and who they're lending to. That's a great point. And thank you, James. I think this is something we don't talk about a lot, but I think lending and being on the lending side has been a great thing and probably will continue to be for the foreseeable future. A great favorite thing. All right, let's take a quick break. But when we come back, we have mine and Kathy's favorite things. Stick with us. Managing properties means every phone buzz feels important Because it usually is And it's never just a call It could be a new lease, a maintenance issue, or a resident who just needs to feel heard Quo, spelled Q-U-O, brings every call, text, photo, and voicemail into one clean, shared view So your whole team always knows what's happening One shared number for leasing and maintenance AI that handles routine questions Smart routing that gets urgent issues to the right person fast Even after hours Instead of juggling inboxes, forwarding screenshots, or guessing who replied last Everyone sees the full conversation in real time.

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13:00Welcome back to On the Market. I'm Dave Meyer here with Kathy Feke, Henry Washington, James Daynard, talking about our favorite things of 2025, things we're going to carry over into 2026. Kathy, what was your favorite thing of 2025? Oh my gosh, I have like three, but okay. Me too. There's so many good things that happened this year, but start with one. I'll throw the first one out that I'm not gonna go elaborate on, but AI has been extremely helpful in underwriting in so many things. But I'm just going to say, I'm just gonna put that out there. We'll do a whole nother show on that. But that was one of my favorite things.

13:38And I really look forward to learning it more in 2026. But I would say for 2025 specifically, bringing back that 100 % bonus depreciation, baby, that's a big one. Not surprised to hear that that being your favorite thing. That is a big one for real estate investors. Maybe explain to anyone who's not familiar with what changed this year and how beneficial that can be. Bonus depreciation is the first year depreciation that you can take. And it was sort of winding down under the Tax Cuts and Jobs Act is when we first got it. And it was 100%. And then it went down to 80. And then the next year, it went to 60.

14:20And then this year, it would have been 40 % bonus depreciation that you could take in your first year of owning a property. Again, I am not a CPA. Do not hold me to this. Talk to your CPA. Make sure you get the right information. Don't trust me. I have to always say that when you talk taxes. But it was really dwindling. And so you couldn't take like massive write-offs in one year like you used to be able to until the OBBBA, that one big beautiful bill act, brought it back to 100%. And it's permanent. However, I have personally talked to several CPAs, interviewed them, tried to really get the nuts and bolts of this, and they disagree.

15:01And I've hounded them on this one thing. And I just want to say this is something that's really important to look for, is that the way I understand it is that the 100 % bonus depreciation is only good on properties that are purchased after January 19th of 2025. So a lot of people think, oh, I'm just going to get this 100 % bonus depreciation on an older property. And I've had CPAs go, yeah, yeah, that's what it is. But the way I understand it is it has to be a property bought this year after January 19th. So look that up because it sounds like you can still get the bonus depreciation on older properties, but it's at the 40 % level that it was.

15:43So the 100 % is on newer properties. Again, don't take my word for it, but go out and buy a good property that you can bonus depreciate. And from what I understand too about the One Big Beautiful Bill Act is it is not set to expire, right? It is now, it is indefinite, right? It's permanent. Yeah. So even if you, you know, anytime you buy a property now, you can consider doing this. So bonus depreciation is an amazing thing for real estate investors, but all of you are considered real estate professionals, right? Tax status? Yeah, absolutely. Yeah. As someone who's not that, it doesn't really help me, unfortunately, which stinks, which I just want to call out for people because it can help a little bit.

16:24But depreciation, usually, at least for me as a real estate investor, if I buy a rental property, the normal depreciation without bonus depreciation usually offsets my rental income and I don't wind up paying tax on the income from a rental property. But I still have to pay all of my income tax for my job at BiggerPockets. I can't take the depreciation for my passive investments and apply it to my active income. That is only reserved for people who have this real estate professional status. And so bonus depreciation is amazing if you're an agent, you're a professional investor, if you're a property manager.

17:04if you have that status, you can offset almost all, sometimes more than your active income. But if you are not doing that and you should look up what it means to be a real estate professional status, I just want to call out to people that you might not get the full benefits of bonus depreciation because I painfully am aware that you don't get them unless you're a real estate professional. Unless you have a short-term rental. Short-term rental loophole. That's the only way around that. That's why there's all this talk about the short-term rental loophole because yeah, James, Henry, and I can get this bonus depreciation on anything because we're real estate professionals.

17:42But if you have a full-time job and you do that more than you do real estate, then you're not. And unless you have a short-term rental, it's a loophole for now. And that's why people kind of go crazy about those. Unless you have a short-term rental that you manage. Yeah. That you manage. That you have to manage. Yes. But isn't it also too, like if someone's significantly other is like a licensed real estate broker that then you can run it through that way? Yes. If your spouse is, yes. It's not just if they're a broker, they have to also manage your portfolio. There's more to it than just being a licensed real estate agent.

18:14You have to be actively involved. There's something called active participation in each deal that you bonus depreciate. Oh, it's not just sitting in open houses. Yeah. No. You have to actually - I've looked into it. Believe me. You can't do it that way. But this is great for anyone who does have it. I do think it breathes a little bit of life into the market too, because it just adds a bit of incentive for people to transact on real estate, which we need right now, because there's just not a lot of transaction volume. So I think this is definitely a good favorite thing. Did you have another one, by the way?

18:48You know, AI, you said this one? I do. And we could talk about it on a future show. But seller financing, I think, is a really incredible opportunity because there's a lot of people out there who can't qualify. And if you can help them qualify by being the bank, you know, being the bank and doing seller financing, then there's a huge opportunity there, I think. Another good one. Yeah, we will have to talk about that on another show because we do have to take a quick break. But I will tell you my favorite thing when we come back. Stick with us. The rise of the tech savvy investors here. You don't need a huge team or tons of overhead to manage rental properties, just the right tools.

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22:35Welcome back to On the Market. I'm Dave Meyer here with James Daynard, Henry Washington, Kathy Feke talking about our favorite things of 2025. Henry started with on-market deal availability. Then we talked about James's love of being the bank right now and hard money lending. Kathy shared with us her love of bonus depreciation. I'm going to bring, I struggled with this because there's a lot of things I like. I got to be honest, James, I thought about saying flipping because James has brought me over to the dark side. We've done two deals, but they haven't closed yet. They're pending. And I'm not going to call them my favorite thing until they actually close, but it was close.

23:14But my favorite strategy is actually something I've been doing for a long time, but I named it this year and it seems to have sparked some interest from people. I love the slow burr. This is just something where I think it's basic, boring real estate investing, but it has been working for me and I'm going to keep doing it in 2026. I think during the pandemic and the years leading up to it, people got the idea that the BRRRR, it had to be perfect. You had to be able to take 100 % of your money out of your deal, that you had to do it in six months and extract all this value out of it immediately.

23:49I honestly never bought that. I don't think that way. I think the way that I've been buying deals for the last two or three years makes a lot of sense. I'm buying small multifamily properties with tenants in them often. And I just wait. I let the tenants stay there as long as they want. And these deals typically cashflow right off the bat, but not crazy, like two, 3 % cashflow. So I'm at least making money, holding costs are covered. Then when the tenants move out, I renovate it. I bring the rents up. And then the next time a tenant moves out, I renovate it, I bring the rents up. And once I've done that, I'll refinance, take some money out and still have a great cash flowing property, usually in the eight to 10, maybe even higher.

24:30percent cash on cash return. I'm not pulling 100 % of my equity out on these deals, but I'm at least pulling out all of my renovation costs and then some. And then you have a great property that's now in great condition. You could go on and do it again. And I just love it because it takes all the time pressure off of it. I feel like so many people have these expectations that a burr is like a flip. But when I'm buying these properties, I don't have a 12 % hard money loan. I have a conventional mortgage on these properties. You know, I'm making cashflow on it. There's no rush. I am making money every month holding onto this.