Episode Summary:
Overview of Episode 82
The latest Real Investor Radio podcast explores key real estate market trends shaping 2025. Hosts Craig Fuhr and Jack BeVier, along with guest Brenton Hess, discuss market shifts, financing opportunities, and strategies for success.
Bond Market and Interest Rate Fluctuations
The bond market has seen major changes in 2025. The five-year Treasury rate recently dropped to around 3.8%, which is significantly lower than last year. As a result, borrowing costs have decreased, making debt service coverage ratio (DSCR) loans more affordable. This shift is opening up better opportunities for real estate investors.
Lower Treasury rates lead to lower DSCR loan rates, improving cash flow and profitability for investors.
Flipping vs Renting: Finding the Right Balance
Brenton Hess explains how he balances flipping and holding rental properties. He emphasizes that both strategies have benefits, but cash flow from rentals can take years to materialize. He advises that rental portfolios often remain cash flow negative in the early years.
A key insight is that most rental portfolios don’t produce significant cash flow until 10 years in.
Challenges in Real Estate Investing
Brenton outlines the three biggest challenges investors face:
- Acquisitions – Finding deals remains the hardest part.
- Construction – Managing contractors and costs is a constant challenge.
- Lending – While financing is more accessible, managing cash flow remains tricky.
Networking and Industry Trends
Brenton highlights the importance of attending events and building relationships with realtors and wholesalers. He has grown his business by creating a strong referral network and leveraging direct-to-seller deals.
Another key point is that building a trusted network helps secure off-market deals and better financing terms.
Maryland Investor Network Expansion
Brenton discusses the success of the Maryland Investor Network, which has grown from 17,000 to over 25,000 members. The group hosts events and matches investors with trusted vendors, helping to foster a stronger real estate community. As a result, more investors are finding reliable partners and better deals. Moreover, the network’s continued growth reflects the increasing demand for real estate investing resources.
Why Now Is the Time to Act
With Treasury rates down and lending terms improving, real estate investors have a rare opportunity to secure favorable financing. Therefore, understanding real estate market trends and acting quickly could set investors up for long-term success.
Taking advantage of lower rates and increased inventory could create a lasting advantage in 2025.
