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Welcome to Live Let Thrive, a podcast about the Airbnb life, the shar economy, and everything in between. Here are your hosts, Micah and Steve.

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Hello, hello, hello, and welcome back to another exciting episode of Live Let Thrive. Yeah, I'm coming at y'all solo tonight, man. It's a late night. Um, I've been up working on Claude. Um, so I just kind of wanted to come in to y'all with an episode, you know, solo dolo. Um it was kind of late. I was gonna text Steve, but it was hella late. I was like, nah, I ain't gonna text him. He's probably in bed. But um I'm like really noticing something with the real estate market, even in the market that I'm noticing. Like, we've always been talking about like the deals are shrinking, right? And I made a bunch of notes here. Deals are shrinking. Only way to really cash flow is you got to be doing like some sort of strategic model, right? Like MTRs, pad splits, short-term rentals, assisted living, something to where you can supplement income because it it's almost like long-term rental cash flow is dying, and it's not really dying where I'm at, but it's slowing, it's starting to catch up and slow down. Because you know, feds just hiked the rates. We talked about the last two weeks on the podcast. Feds have hiked rates. Um, it's getting so bad. Like, I have wholesalers sending me deals, right? They'll send me a deal with a contractor attached to it. Like, I've never like I've seen it before, but not as often. Like every time they're like, hey, this contractor can do it. I got contractors calling me for work. That's how I know everything is like really slowing down, especially here in Texas, right? So in Texas, like you know, we all we talk about it all the time. Not only does interest rates not kill deals, but if the property taxes on top of the interest rates, it's just straight up killing the deals. Like there's no deals out here, right? Um, and if you are getting a good deal, like the deals that I'm finding, because I'm gonna show y'all a dashboard close to the end of the episode that I created with Claude. Uh, even the deals you're finding, like in Texas, they'll cash flow year one, you know, year two, probably not. Now, the deals that I'm buying in Arkansas, they're still cash flowing. It's more deals that can still cash flow, but even those deals are starting to shrink. So you're having to be real aggressive with offers. Um, I'm seeing stuff, I seen a new build been sitting for 300 something days, like 311 days. So I was like, dang. But that's opportunity because in Arkansas, you can still put down like 5% and still cash flow on like, and I'm running these deals like very conservatively. I'm running them at like 7.625 interest rates, which you probably don't want, not gonna get you probably can get like a 7.1, 7.2-ish, but I'm running them very conservative, like at 7.6, putting down like 5%. And these are deals that are on market, these ain't like off-market deals. Off-market deals, you can cash flow all day down there. You can get in real easily there. Here, and even if you bur something, you're still gonna have to midterm pad split it, some sort of creative strategy to really get cash flow out of it. So I'm just like watching these deal numbers shrink and shrink. So I work with clients, you know. I'm a real estate agent now. I do work with clients in Dallas in the DFW area, but like I have to be straight up with people. I'm like, man, you're gonna have to to like protect your investment because I'm running into people that will say, Hey, I don't care about the short-term rental, I'm just gonna do midterms. And I'm like, you still have to go into an area where short term is allowed because you want to protect your investment right now. You've even if you if something happens where you know, if you're in a situation where you can't short term or you're just depending on midterm, you're in a bad spot because you know you can't go long term at the end in DFW. So you got to be real careful and protect your investment. And it brings me to the point of you got to be real sniper with your deals. Like, you know, back in like 2020, everyone's bidding over asking, everybody's making a deal. You could buy a bad burr and get out of it, you know, because everybody's throwing out buckshots. Now you got to be real, it's real strategic. You got to be real sniper focused. Like, you got to know how many beds and baths you want, what's the layout of the property, how much you're paying, what the interest rate's gonna be. And in Texas, what are your property taxes? Year one, probably to year four. And understanding, even though the long-term rental ain't there, you're now in a position where your midterm rental cash flow can shrink because you're only dependent upon that, and property taxes are not going up. And this is one thing I do, I think people did get confused about in Texas. Like I hear people saying Texas is a bad market. Texas is a struggling market if you're investing. If you live here, it's different. You can homestead and not have to pay these outrageous property taxes that go up every year. They're still pretty high compared to the rest of the nation, but they're not gonna be you that you can cap yourself on how much that they're gonna charge you on property taxes if you buy here. So I don't like I said, I 1031, my properties out of Texas to Arkansas, and I don't invest here. Only thing I have here is my property residence, and that's the way I plan on keeping it. But as of right now, and the market that we're in, you got to be real strategic. And I do think I think the markets sh I'm not gonna say crashing. I said crashing, I think last week, but I think it's shrinking to a point where even the people who are buying these midterm rental deals that don't cash so long term could be in some hot water depending on how low the real estate goes. Like, I think it's gonna go to like COVID levels, meaning I think the market's gonna correct itself from when everybody was bidding and putting like a hundred thousand dollars over asking. I think it's gonna correct itself from that because I don't think it ever really truly corrected itself. So I think it's gonna correct itself from that, especially in the DFW. Because you got a bunch of people like and Frisco, all of in Frisco Planos coming and bidding these crazy mouths, and then you go further out of Frisco to like prosper, go to like uh Salina, like Salina just was in the news, you know, they're struggling out there. So it's like you got to be real strategic with what you buy from an investor standpoint. People buying your first-time home buyers, y'all are in a pretty good shape as long as your finances are good. You know, um, I don't I I always say don't depend on 09 to 5, so always have second, second or third streams of income. That's how me and mahogany have always lived. Me and Steve talk about it all the time. But what I would say though, if you're investing, run your numbers to a T. Like Texas, it ain't a sticker price number. I don't care what the sticker price is, you ain't getting a discount just because you if you get $20,000 off, that don't mean you're getting a discount because look at your cash flow number. Is your cash flow number any good? If it's still bad and you're depending on midterms and mid number, you can't just always depend on midterms. And my concern is if midterm rentals take a hit, you need to be in a property. And this is why I say property design is very important because if midterm rentals take a hit, you need to have a midterm clientele that's always gonna come. And for me, I think if all else fails, people start slowing down, like let's say cranes stop moving, like 2008, cranes stopped moving, that midterm uh construction crew ain't coming in. I think it's gonna be insurance clients. I think the money's gonna still be there. Um, I don't know it in full, but that would be my assumption is insurance clients are still gonna be there. So you have to have a property that's insurance client ready. The three bed, two baths, the four-bed, two baths. Um, those are the ones I'm going for. Four bed, three bed, two baths, four-bed, two baths, finched yard. You've got to have that and a garage. If you have that, we're in a good spot. Uh, you can throw in the extras, like you can go get a pool, like Stevie Sachs, he does the pools. If you do that, that's just you know, extra, you know, the cherry on top. You got the pool. Now somebody will pay a little bit more for that. Um, but I think um it's getting real hard to invest. And then I also think even the people who are buying to move in, it's like someone said made a really good point on threads the other day said home ownership is turning into a luxury. It's not like everyone, hey, you go to college, get married, buy a house. Now it's like a luxury because look at the interest rates in Texas, especially. It's a luxury to own a home. Like it's like you gotta, I think they said that on average in Texas, you have to make $200,000 a year to live comfortably. Now, a lot of people are hopping on and saying, no, you don't have to. I'm like, yeah, you do for me, you, and the people that bought houses years ago who have these low interest rates, who have these uh homesteads on their home that they live in. Yeah, we don't fit that model. But to buy a home in Texas, you gotta be it's it's rather unaffordable, you know. Making and people take, you know, it not advantage, but they take for granted six figures a year. People that make six figures a year, you probably need like two of those just to like afford a house right now, right? Because six figures just ain't don't come by easily on a on a nine to five, right? I always tell people that the people just think six figures is just there, it ain't there for everybody. Um, and the people that are needing six figures to you gotta like take a haircut on what you want because like uh me and Steve talk about all the time, these new home buyers they want like these new houses, which is cool, but you gotta know, make sure you know everything that's going on. And at the end of this video, when I show you guys, by the way, if you're not if you're just listening to this, definitely turn on the YouTube. Uh, you should be able to just watch the video on whatever you listen to podcast on. But I'm gonna show you guys too. Like, if you even look at like some of these new construction deals, you can find some that cash flow in Arkansas, right? Texas, you're not gonna find none that cash flow. And the scary part is the people buying these, they might belly up in a few years because I just don't think they're good deals unless you're making aggressive offers. And I'm running into like people that say, Hey, I talked to a realtor, they said they don't want to make an aggressive offer. That's cool and all, but you might want to get a new one because you got to make some aggressive offers nowadays. You you got to be real bold with your offers because it's like if stuff's sitting 90, 100, 200 days on market, even if it's like brand new, something sitting old, you got to be aggressive with your offers. And I'm gonna show y'all this um here in a second. I'm gonna show y'all um the differences in the markets between Arkansas and Texas. And right now, I'm gonna actually pull up now and I'm just gonna show y'all this uh dashboard that I built. And this dashboard is real simple. This dashboard is just something I made on Claude. But what it did was what I did on this dashboard, I just simply made a dashboard that pulls all the new construction in Arkansas, all the new construction in Texas, but it's not really new construction, it's 2016 and up, and three beds, two baths plus. So, and then I get granular with it. So here's a deal in uh in Arkansas, right? I'm gonna start with Arkansas, then I'm gonna move over to Texas. So, Arkansas. This is a day, this has been sitting on the market 111 days, built in 2018. Clean, three bed, two bath. And what I did was I built this to show me the cash flow if I was to buy this with 20% down, right? 20% down on the sticker price. There's no negotiations. So look at all the good cash flow. And I have it, I I have it sorted. I can sort it by days on market, most days on market. See, this is 300 days on market, 300, but these are all new builds. This is like 600,000. We know this is gonna sit. This right here is 215, three-bed, two bath, 2024. So I'm not even gonna look at these, I'm more or less looking at what cash flows all in, the high to low. So I'm gonna break that down. So the cash flow all in is you're running it like a long-term rental. You're calculating vacancy, repairs, management, all in, all in. This one cash flows for $116 a month. Now I don't care about this all in number. And let me tell you why. I'm gonna midterm or short-term rent this thing. So I only really care about the cash flow of $526. And the cash flow is pulling from how much can I rent this house for on HUD, which is like section eight. Some people use it for section eight, but section eight for $17.80, I can probably rent that for $1800 a month on Section Eight. But at $1,800 a month, I'm probably still cash flowing about $550 a month. But uh, but right now this is just on HUD. If HUD, take away my PITI is $526. This deal, I would go, this is a great deal in my book, how I look at it, because I'm on a midterm or short term, because I get positive cash flow from the $526 PITI and from all in. So that's calculating vacancy, repairs, and management. So I don't really care about that when I'm doing midterm and short term because I use profit first. So I have the vacancy, capex, all that's due to the profit first, but it's a more money to play with because I'm in the short-term and midterm. But if I see the long term, is this this is a good deal. I'm going after that. I'm attacking that full blown. And what I want people to look at is this is 175,000 built in 2018. Now look at all these new construction 2026. I'm gonna tell you something about them and I'm gonna have you notice something. All these deals cash flow. Problem with these deals are this. None of these have garages. So on a midterm, I'm not looking at these. These are automatically off my list. So these I'm not even looking at. This, not looking at no garage, no garage, no garage, not looking at boom. This has a garage, 174,000. And it cash flows, but it doesn't cash flow all in, but it does cash flow just as a long-term rental, not including vacancy repairs, all that. However, it's a three-bed, two bath listed at 174. This four-bed two bath is listening at 175. So this 174, you know, has to come down. It's been on the market for 89 days. This has been on the market for 111 days. Now I know this market like the back of my hand. This, these two properties in Jacksonville, Arkansas, are right by the Air Force Base. Right by the Air Force Base, right by Cabot, right between Cabot and Little Rock, people are always going to be there. I have construction crews in these types of places right now. So if you look, keep on going down, we're still getting cash flow all the way down here. You know, we're not getting the all in, but we're getting cash flow. Like 121. You start to now the cash flow starts to dissipate about here. But what I'm looking at is these four-bed, two baths. This I'm not looking at. See how this is 299 days on market? These are gonna be on market a long time, anyways, because they don't have a garage. This right here, this right here, you negative 78, but you can negotiate. This is put on the market for 294 days. So I'm now gonna negotiate. How much do I have to put down to make a positive number? First off, I'm putting down 5%. And the reason why I'm putting down 5%, um, I want y'all to understand that um this is a tip. Navy Federal does have a program right now that is allowing people to get second home loans with no PMI for 5% down. So y'all check it out. If y'all were Navy Federal, check that out. So I'll say if I put down 5%, I'm still negative cash flow. Let's say I get something real aggressive and offer them 175. Now I'm still negative. So you can still keep going down. This is what I mean. Get aggressive with the offer, put the offer in and let them counter. A lot of people, if these people don't send nothing back, oh well, send out 50, 20, 20, 30, 40 offers in a day, in a in a day and see what you get back. But this has been on the market a long time. I wouldn't really target this. I'm gonna look at look at viewing on Redfin because it's three beds, two baths. It's a beautiful property. I the only thing I don't like, right off the bat, I'll tell you right now, they need to put a bath a fence up that has to get a fence. So I would ask them to fence this um and then come up with a low ball offer. You've been sitting almost a year. So these are the things I'm talking about. Like get real aggressive. You can get credits, everything else. So get aggressive, but you got to get like real pinpointed on what you want and just uh like this dashboard, you can create this in five minutes and claw it. I just told it, hey, uh pull the data from HUD. After you have the data in HUD, pull all the properties and tell me what their cash flow would be, and then I can just separate it by however I want it to be, and then I'm running it at a 7.625 interest rate with a 20% down payment, and I can change this to whatever I want it to be, right? See, look look how I'm changing it. I can change it here to 5% down, and then even at 5% down, that's still cash flows paying the sticker price, but I would not pay the sticker price for that. I would I would negotiate that down to like I would I would even try 150. And this is what I'm saying. If you're in these markets, see 150, you're cash flowing all in, and you're cash flowing just take away rent, take away P I T I. However, you gotta get aggressive like that. A lot of people aren't getting aggressive, they're afraid to get aggressive. And the reason why, you have to know what you want. Like I know for a fact this is a four-bed, two-bath, this will hit all day. Uh you you ain't gonna go wrong on this. And if you view this on Redfin, I go say, okay, it's clean. Boom, no fence. And the reason why a lot of these don't have fences, they got hit by tornadoes a few years ago. So I housed a lot of these people, and a lot of them just left their clouds. They were just like, I'll just take the money and leave. So I would tell them to fence that yard. So you have to get real aggressive. Now, let's flip the script. Now, here goes duplexes. I'll show you guys duplexes. Um the duplexes are wrong. So this is 2200. This would cash flow because that's 2200 for one side. So no, no. Is that 2200 for one side? Two-bed, two bath. No, it's not. That's not two-bed yet. This is no, the cat, this is right. So the 2200, so for a two-bed, two bath, section eight pays 1100. So this doesn't cash flow at 280. I would never touch this because it's a two-bed, two-bath. I would touch something like this that's six beds, two and a half baths. So that's like three beds, two and a half baths on each side, six beds, five baths. But you're gonna have to really come down and get aggressive with this number. Been on the market for 42 days. Yeah, you might not be able to get a deal out of that. So even at the like the um the uh duplexes, even their cash flow is starting to dwindle a little bit. You know what I mean? You start to see it. So here, here goes uh like I keep telling you guys about these three-bed, two-bath, duplex. This one's a four-bed, one bath on each side. I don't like that, and it doesn't have a yard. There's a lot of things I just wouldn't touch this duplex with duplex because of, but it does cash flow long term. You could, you know, grab that because I'm a midterm and you could midterm that. I just don't know what a four-one would do. I think it would do good, but I I just I don't like a one-bathroom. Um, but this is this is Arkansas. Now I'm gonna flip to Texas and I want y'all to take a look at this. Look at how everything just went red, and this is cash flow. Let's do clash flow P I T I only. This is just saying, hey, mortgage takeaway P I T I. We can't even find anything that cash flows. This is from built in 2016, 89 days on market. Nothing's cash flowing here. So in Texas, you better get super aggressive because nothing's cash flowing. You have to be able to do midterms, short terms, and get real aggressive with it and do it in an area where you can do it. As you can see, I have this marked on Grand Prairie. So these are where short terms and midterms are allowed as long as no HOA, and I have HOAs filtered out, but that just shows you what the market is doing right now. So if you're buying in Texas, you have to do like a midterm, short term. And I'm not really I'm not the type to invest like that. People do it, I work with people that do it. Um, and if you are gonna do it, just do it in an area where it's where short terms are allowed, and just do it where you see that nothing like laws aren't gonna affect you, and where you know what you can make a month. Like you're you're let's just say this, this is without negotiation, of course. Let's say your mortgages, your P ITI, you're at 4426 a month. That is kind of high because sometimes the people I I talk to, they're telling me they're they're buckling down their midterms to 5,500 a month. So you got to be real careful because if you know, let's say you're next to somebody who's been owning their property 10 plus years, uh, they're at a 3% interest rate. It kind of they can undercut you and price you out the market. You know what I mean? Uh in Arkansas that can happen too, but they're willing to come up because they've been owning a long time and they can take the extra profit, but they can still undercut you, but it's not as bad. Like here, if somebody's been on a property 10 years in Grand Prairie, bro, they can undercut you if you're they're doing short-term and midterm. So you just got to be real careful buying right now. But the main part of this episode, I really just wanted to show you guys that dashboard to kind of show you where with the kind of market we're in, because the market is definitely different, it's definitely changing. We have to be very, very strategic with our deals. Um, and I do think that the prices are gonna bottom out to the COVID levels. Another thing, too, you have to be investing for the future. So, all of those Arkansas places I showed you, most of them are on 10,000 square foot lots. And in the state of Arkansas, they have ADU by right. So, what is ADU by right? That says if you own a single family home in the state of Arkansas, you are allowed to build an ADU in the backyard. Now, what does that mean? mean is if I own a house that's on a 10,000 square foot lot, most of those houses are 1,500 square foot and under, and they do great as midterms because that's just what the market is there. And if you have anything that's like four bed, two bath, 2,000 square feet, you're gonna kill it. Like my mom's property did like 70,000 in less than a year our first year hosting it. But if you're gonna, you know, they're gonna be three bed, two bath, or four-bed, two bath with huge backyards. They're gonna be like a 10,000 square foot lot with a 1500 square foot home with that are that's four bed, two bath, you can build a ADU back there. And if you get one on the corner, you can kind of build like a sidewalk that goes back to the back of it. You know what I mean? Because they are some of them don't have fences so you can got to get real strategic with what you're doing. So that's another thing to consider. Make sure you're investing for the future. It's like Austin, I know they have ADUs um and there's little pockets in Dallas that have that are that are starting to allow ADUs but you just have to make sure it's gonna cash flow. So a lot of people are using ADUs to cash flow especially on the coast. But of course I've always said Texas I don't think they'll adopt ADUs in like a huge way like the coast like California Oregon Washington because we just have too much damn land. Let's just be real it's just too much land down here. But if you are you know see if you can get something on a bigger lot if for just for future future proofing right because I'm buying stuff with bigger lots too future proofing. But I just wanted to bring this episode to y'all show y'all that dashboard and that dashboard's very simple to make it's just simple clawed command. And you guys can like you know build that and just kind of see what's out there in the market run numbers on it. Because the only thing now the only thing I do see that really really matters in Texas that really hits in Texas is sub two. If you can get a good sub two deal um I seen one in Salina the other day that I sent to my client um but it was in I think it was in the HOA and I think you're gonna see a lot of like the HOA ones because you know these are homeowners that are trying to get out of properties. I think you're gonna see a lot of those so a lot of like sub two deals in that in that situation. And then you also have these people who are in these deals we talked about it a couple weeks ago me and Steve because we were listening to I think Robert Green um the guy used to do the podcast with uh with uh Brandon Turner Mr Green David Green um and he was talking about these these lenders these new homeowners these new construction builders what they're doing is they're they're offering these two one buy downs and these two one buy downs are killing a lot of these first time homeowners because they don't understand it. They don't understand like I'm gonna buy your interest rate down by two percent for the first year. So after year one your interest rate goes from that four to a six or that five to a seven your your payment goes up extremely or and they sometimes will be running the taxes on vacant land not including the current taxes so the next year the taxes skyrocket. So you got to be careful with those too so when you're doing new construction you got to be real careful as well. But yeah y'all uh let us know what y'all think uh hit us up in the fan mail we got fan mail now um but yeah thank y'all for continuing to listen to us hit us up on fan mail email us liveletrive at gmail.com continue to listen to us um send us the email inbox us we're on uh tick tock instagram um all that good stuff and Facebook as well yeah thank y'all for continue to listen just wanted to share that with y'all and yeah let me know what y'all think in the comments we are out thank you for tuning in to this week's episode of Live Let Thrive be sure to tune in next week for all the latest in the world of Airbnb and all that entails bye bye