Why 2026 is a GREAT TIME TO BUY REAL ESTATE

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Michael Zuber (0:31)

2026 is an amazing time to buy real estate. Now, again, you have to have the right mindset. You have to be willing to do the work. But don't believe the do-mers.

I believe with every fiber of my body that 2026 is an amazing time to buy real estate. You will get better deals than you have likely seen in the last 12 years.

This buyer's market, which does not come around a lot, is causing a tremendous amount of opportunity if you are looking in the right places and if you are consistent with doing the work. Of course, on Mondays, we talk to the one and only Cody Davis. Cody, what's going on, man?

Cody Davis (1:11)

Mike, I've got more deals out there than I can buy. And coming from the guy that buys with no money, that's saying a lot.

It's literally an operational restraint at this point. There are more deals to do, to structure, to buy. I got one accepted with a seller finance second mortgage at zero interest. And I've been getting more and more deals like that accepted recently, which is just incredible.

Michael Zuber (1:38)

Yeah, so let's talk about that a little bit, because I think the deal you just put on the contract, if I remember right, it's a 42-unit building, getting bank financing, then the seller stepping into a second position for a decent chunk at 0%.

So any payment is completely principal. Awesome deal.

Getting a combined loan to value, probably something over 80%, you can share with us. But again, I want people to realize, the reason you are seeing these deals, the reason, frankly, you are creating these deals is because you're in the market. You are looking for opportunity. Your head is not in the ground. You're not running around saying, the world's on fire. You're out there talking to people, putting up offers together, and you're taking your shots, right?

Cody Davis (2:20)

Yeah. And I got that one at 91 percent combined loan to value. The bank is putting up 1.4 million, the seller is financing 532,500, and it's just shy of a $2.1 million purchase for 45 units. So is it the cosmohall of assets? No, not at 40 something a door, but it happens to be adjacent to a bunch of other real estate that I own. And so it's part of a bigger long-term picture, and I can buy it for like 9 percent down.

My total payment on 45 units is like 10.5 grand a month. It's nothing.

Michael Zuber (2:54)

So what do you think gross rents will be on that, like 30 grand?

Cody Davis (3:00)

It should be between 33 and 35 a month. And so you figure OPEX on that will probably be around 12 to 14 stabilized.

Michael Zuber (3:10)

Sure.

Cody Davis (3:11)

And then with a payment of 10.5, I think it's 10,700 and something. I've got plenty of room for margin, and it should come in to like a 50 percent, a little bit north of that cash on cash return, for those who care about that stuff.

Michael Zuber (3:29)

Yeah, it's funny. I've been talking with Stephen Dow from Velocity Mortgage, because they offer 90 percent CLTV loans. We always talk about what's called a 50-40-10, 50-first, 40-seller-second, and 10 percent down. You're doing a version of that, actually a little bit better, 91 percent. And again, people don't understand that in order to get one of these deals to work, the seller has to step in the second. And what people don't understand about seller seconds is they're completely negotiable. They're not bank financing. You can get, in your case, zero percent interest. You could delay payments.

You could do 30 year AMs. You could do 10 year AMs. You can do all kinds of things. So just talk about the power of understanding seller seconds.

Cody Davis (4:13)

Well, it's all about getting your total cost of capital down. And this is why deals right now will be better in 2026 and going into 27, than probably any year of my investing career. If I structure a deal where I have a very little payment for a large portion of the money, my cash on cash return can go up to where I get all my money out. Well, yeah, because on that loan, I'm going to round down for a second, half a million dollars at zero interest.