BiggerPockets Real Estate Podcast - Scott Trench’s $1,000,000 Bet on Real Estate (Update)

Episode Date: January 21, 2026

Last year, Scott Trench, former BiggerPockets CEO, made a big bet on real estate—selling $1,000,000 in stocks to buy rentals instead. A year later, he’s on the show, and we’ve got one crucial question to ask him. Was it worth it? The man behind the mustache (yes, he’s still got it!) is joining us today to give a life update and share how his huge financial decision played out. But a lot has changed in the past year, markets aside. Scott stepped down as BiggerPockets CEO and is now fully dedicated to BiggerPockets Money, helping as many people as possible find their own version of financial freedom. We’ll go over his $1,000,000 stock sell-off, how his investments have been performing since then, his 2026 outlook, and why he believes many investors will be proven wrong about the housing market and real estate investments. Scott believes the next three years will be an “absorption” phase for real estate, but what does that mean for your property values, rent prices, and cash flow? And don’t worry, Scott also shares what he’s been doing since stepping away from 100-hour weeks as BiggerPockets CEO. In This Episode We Cover Was selling worth it? The results of Scott’s $1,000,000 bet on rentals  Scott’s growing fear about the stock market and AI-led price rallies  Scott’s investment portfolio in 2026 and why he still has so much of his net worth in the stock market  The “absorption” phase begins, and Scott’s 2026 rent price growth prediction Stocks vs. real estate: Are either truly safe in an economy like this? And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/real-estate-1229 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Should you invest in real estate or pour your money into the stock market? It's a question you're probably asking yourself right now as you create your financial plans for the year and work on building wealth. So today we're digging into it. Should you put a down payment on that local property or buy more into the S&P 500? Hey everyone, I'm Dave Meyer. Welcome to the Bigger Pockets podcast. Today's episode is a follow-up to one of our most popular shows from a year ago.

we've got former Bigger Pocket CEO, Scott Trench. A year ago on this show, he proclaimed himself a big bear on the stock market, and he announced he was selling $1 million from his stock portfolio to reposition that capital into real estate in Denver. Now, a year later, S&P is up. It's up 15% from that conversation. And Scott is back, and I'll get an update on his life since stepping away as CEO of Bigger Pockets.

recent work hosting the Bigger Pockets Money podcast, and then I'll ask him if he has any regrets about that big financial decision he made last year. But more importantly, I'm also going to get his take on the markets, stock and real estate and more, for the rest of 2026. I want to find out is Scott doubling down on real estate and continuing to sell off equities? Or maybe he's changed his outlook and he's back to stockpiling ETFs for the next 12 months. And I'm curious what he recommends for other investors striving towards the same level of financial. freedom that he's achieved himself. So let's find out. Scott Trench, welcome back to the Bigger Pockets podcast. It's so good to see you. Thanks for being here. Good to see you as well, Dave.

It's been a while, and I'm sure the audience is eager to hear. For those of you who don't know, Scott graduated successfully, financially free now, and stepped away as Bigger Pockets CEO a couple months ago. So tell us what you've been up to. Yeah, I've been doing a lot of lifting weights, a lot a hiking. I got a ski pass for the first time and since 2017. Dude, that is way too long. Living in Colorado. That's yeah. But this year the goal is to go 10 times. So I got a ski trip planned for two or three weeks from now. And yeah, just been hanging out, enjoying, enjoying life and been doing the Bigger Pockets Money podcast and having a blast doing that. It's been really fun. Nice. What's been going on over at Money? What are you guys focusing on these days? Yeah, we're

basically the goal is to build a DIY financial planning toolkit. So I think it's very frustrating that you can't even find like a basic spreadsheet to put in your financial position if you are somewhat sophisticated investor with some kind of complexity. So just like creating, there's a basic personal financial statement. Here's a goal setting template. Here's some calculators that can help you make very basic decisions around there. And eventually what I'd like to do is I'd like to put out about 25 different financials. plans for fake people that others might find familiar. Oh, I'm a real estate investor with a complex portfolio.

I'm a broke at 50 trying to catch up to retirement and just kind of like, oh, you should do something different in this situation than over here and provide those kind of templates so people can make their own plans and maybe bring them to an advisor. I'd love to see them. I absolutely understand this pain point. It is very difficult to find these things. I am pretty good at this stuff. and I've struggled even to make my own like financial planning stuff in Excel because it really

it's especially when you're in real estate it is difficult to build that into, you know, a traditional retirement plan, figure out where you want to allocate resources. So please send them my way once they are done. And we'll share them with the audience, of course. But we are here today because I want to understand. I always enjoy sort of just talking to you and about the market and what you're doing and strategy. I think that's something. you're always been great at and it's fun to talk to you about. So we're going to get to that. We're going to hear about Scott's 26 predictions approach to investing, but we've got to hold you accountable to your 2025 goals because you were here a year ago doing this. So let's go through

your 2025 predictions. Well, just to kind of start the conversation here, one of the reasons I've got it into vibe coding is because I'm awful at the prediction. So this was a disaster, right, From a prediction standpoint, right? So last year, I put together a deck call. I get irrational exuberance 3.0. And I'm like, the stock market, you know, the S&P 500 in particular, is at all-time highs or close to all-time highs from a Cape or Schiller PE ratio. That's crazy.

I don't understand that. I'm not taking a part in that. You know, I was like, gold is surged recently. I don't understand Bitcoin. I'm not taking a part of that. Bonds are too low. Where do you go for all this stuff? And so my move at that time was to sell portions of my stockport.

portfolio and move it into paid off real estate. Because I'm like, I can get a 6, 7% cap rate deal here in Denver, all cash right now, and go with that. And so that's what I did. I ended up selling a million dollars of S&P 500 and putting that into a quadplex. I actually sold a little bit more than that, and I bought another duplex a few months later. And so that quadplex, I underwrote to a 6.5% cap rate. and I just did my taxes and annualized, it was almost exactly that, like, 6.4%

or 2% with property management. So I got what I was looking for with that quadplex. The duplex has some work, so I'm finishing up stabilizing that. There's a tenant in place, and so I began to work three or four months post-closed. So we'll have to come back next year to see what that cap rate ends up being, but it should be higher. Yeah. That was what I did with those funds. And so I got my cap rate, and depending on how, you know, depending on how,

what you want to assume for appreciation on an illiquid asset, some appreciation there. And then I missed out on like the 12% growth from February when I sold to the end of the year. Yeah. We're recorded this in the early January of the S&P 500 plus whatever yield came from it. So that was like a $100,000 loss on those on those moves compared to what I would have gotten if I just stayed in the S&P 500. Right. Over the course of the year. Now, who knows what the S&P 500 will do this year. Maybe it goes up even more. And, that move looks even worse. Maybe it immediately crashes or doesn't go anywhere for a while and that ends up. So, you know, time will tell how that ends up looking. But from year one perspective,

doesn't look so good on that front. Well, I love the honesty, but it's like, you know, you're still up. You're just perhaps up on paper as of today less than it would be. We'll see. No one knows. Yeah. But I'm curious just like from a philosophical perspective, is that something you regret or beat yourself up or like, how do you think about that kind of decision? No, the first property every single month, every single month I'm able to transfer five and a half, $6,000. You know, some months is a little less when I have like property taxes or insurance. Yeah.

There's a reserve in there for CAPEX, you know, but I'm able to just transfer that and I spend it. Yeah. It's great. Pays from my life, right? Second one, you know, again, for the first three or four months it did. And I knew I had this project in there that was all factored into my underwriting. So once I get that stabilized, that should do the same, a little bit lower, like four and a half to five thousand on that.

And that just feels great between those two properties alone, not to mention the rest of my rental portfolio, and that still half of my net worth that is in the stock market in investments that are either the S&P 500 directly or in other stock market ownership. Yeah. I think that's the right way to look at it because it's obviously it can be easy and somewhat tempting to say, oh, I should have done this, I should have done that. But I made a similar decision. I did not sell nearly as much stock, but I sold some stock at the beginning of last year, too, just because I felt like there was risk. And I don't necessarily think the stock market

was going to crash, but I think the probability of the crash is going up. And I'd rather just take risk off the board. And the way I think about that is like, I'm willing to give up some potential gains to take risk off the board. And sometimes that works out where, yeah, you don't realize as many gains as you would have in the stock market. But like a year ago, who knew which way the wind was going to blow? And I think it's a totally rational decision to try and hedge your risk in real estate, I think, just more of a sure thing, at least in the last year or so. And I would argue going into this year as well. Yeah. I felt and feel way better about it in terms of like, I can, I'm spending that money, right? That's the difference.

If I was saying, oh, I'm going to wait 30 years and just to accumulate, then I, you know, then maybe that's different, but I'm actually spending the cash flows generated by this rental property to fund my lifestyle. That's a major improvement for me in this particular situation, although it clearly has cost me somewhere approaching six figures-ish. But again, we'll see. I guess that's a good transition to what we're looking forward to in 2026. How are you feeling about the stock market this year? One of the things this year, I'm going to, with my humble pie in, and I'm not going to be using words like irrational exuberance 3.0 or anything like that. And I'm not even going to pretend or like have any input at all on any asset class outside of real estate.

I feel like by real estate, my real estate takes over the years have been generally fairly close. I've never been like wildly like crazy in the wrong direction on those in my time at Bigger Pockets. Yeah. So I feel comfortable talking about that. But like I have no idea what the hell is going to happen with Bitcoin. I don't know, I don't understand gold and all this stuff, the dollarization, like if that's going to continue or just revert, revert wildly.

Like, I think I could flip up a coin and come up with something on those items there. You know, the S&P 500, the same stuff I was talking about last year continues to scare me. You know, and there, it's like, hey, it's trading. It's like a 40 times cape ratio. Some people don't like cape. It's at the highest ever price to sales ratio in history. It's trading out of highly elevated price to forward earnings in their very high trailing earnings. One thing that I've been noodling on is AI spend.

AI CAPEX alone is like $400, $430 billion is where they're going to shake out in 2025. And it's going to be $600 billion next year. And what's interesting about that is I'm sure you notice this, but I use AI all the time now. Of course, yeah. I'm switching between these vibe coding apps all the time. It's free or very low. cost each time I use it. And every three months, the model I'm using is made obsolete by the next one developed by some competitor. Right. And so I'm like, what's interesting about that is,

as I believe that the bulk of that is capitalized by these companies. So it's not showing up in your price to earnings report when you look at global S&P 500 price to earnings for a trailing basis. But it's spend. It's not capital expenditure. It's spend because of how rapidly it becomes obsolete. in my view. So I think that's like even like another thing on there that I'm like, okay, I'm interested in. But at the same time, it truly is making things more productive. It's truly making life easier and faster and making everything easier for me as an individual. So surely that's going to show up on the scoreboard somewhere in profits or earnings or revenue or individual incomes somewhere in the world that's going to show up on the scoreboard,

making the world a better place or people more productive at least. Yeah. But it's just like, is that all going to translate to corporate profits for these, you know, the mag, mag seven or the fangs? I don't know how that'll play out. So I only have questions this year. And I'm like, I'm sitting very comfortable with my diversified, safe, boring portfolio, you know, large cash position of like two, two and a half years of spending and my paid off rentals. And I'll probably miss out on something. But I just have no idea where it's going to be. Yeah. Where that next piece is going to come from. And I think that there's still plenty of risk. on the table. So that's my take this year. And next year, we can count the next, you know, 200,000 that I miss out on on this particular move. I'm sort of in a similar headspace as you that's like, I'm at a point in my career, luckily, where I don't need to maximize profits. And part of me just wants to just kind of like protect what I got and glows, keep going,

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Make it happen with PropStream. Welcome back to the Bigger Pockets podcast. I'm here with Scott Trench talking about his takes on In 2026, we talked a little bit about 2025. Scott, you sort of hit on, you know, we've sort of been circling around this idea of like portfolio allocation, how much money you put where. And this is a tough question for people. You alluded to this when you're talking about sort of financial planning. How do you think about allocating capital? And maybe you're willing to share some of how your portfolio is allocated, at least in percentage points right now.

Sure. I mean, my portfolio is very straightforward. About 40. 45% is in real estate equity here in Denver, Colorado, in multifamily properties that I own. And I have a property manager, but could operate here. And that's what I know. I'm kind of like digging my heels in for a slog on that front for a little bit. But it's, you know, with the low leverage, I'm generating pretty good cash flow from that. Almost entirely alone funds my lifestyle. And then the other 55% of my wealth is spread across various retirement accounts, free tax retirement accounts like my 401ks or equivalence, post tax like the Roth, my HSAs, my aftertax brokerage accounts. And that position includes a two and a half year cash reserve and then is allocated into

fairly aggressive stock investments. Generally speaking, my new investments, the new cash that I put into it when I do have cash inflows is tend to go into value stocks right now. Particularly, I like these relatively low fee, actively managed value funds from Avantis, both domestic, international, and emerging market. Why is such a big cash position? Just several reasons. One is I have a real estate investor. Two, is I'm no longer the CEO of a big company. So I don't have that this large income coming in.

And then third, I wrote a book called Set for Life. and I think it would be particularly embarrassing to go bankrupt after having authored such a book. So I keep a particularly large cash position, even if it is a drag in my overall portfolio returns. See, people don't talk about the unexpected, the hidden consequences of being an author or a public personality. You have to hedge against going bankrupt. Everyone needs to, but you need to do it a little bit more. It's pretty funny. All right.

Well, cool. Thank you for sharing that because I think, you know, sometimes I talk to real estate investors on this show. like, you know, Henry, James Dator, people you know as well. Like, they're 100% in real estate. And you clearly believe in real estate. So why so much in the stock market then? Well, I'm 35, but I won, right? I'm very lucky.

I got what I wanted out of my financial portfolio. I do what I want with my day at this point. And so, you know, I just want to maintain that position on an indefinite basis and be able to harvest my portfolio. I'm a little bit even more conservative probably than this like three and a half, like three and a half, three point seven five percent safe withdrawal rate for my portfolio. So it's that diversification across these different stock portfolios to make sure that the growth is there long term to sustain that position. Well, good for you. And congratulations.

It's an incredible place to be being able to say that you've won at 35, I think is the dream for pretty much everyone. So let's turn our attention to real estate because obviously we all want to hear your take on real estate. You alluded to a slog. So what are you seeing in the market right now? For real estate, I'm going to just dive in there. And I think that the word I'm going to use to describe what's going to take place over the next three years is absorption. That's it. That's the theme I've got here. And I think that that is really going to be the main driver of what happens in the real estate market across the nation. Now, every region is different. But I think in most regions around the country, on average, you saw rents not go up very much,

maybe decline a little bit. And that's really a problem for real estate investors who are really betting on inflation implicitly on housing costs as part of the core thesis behind the investment. And the reason you didn't see that. We've talked about this for years is the onslaught of multifamily supply. We're specifically talking about the residential market right now. And the historic deliveries in 2024 and in the first half of 2025. So we talked about that for years and those abated, right? And the second half of 2025 and now heading in 2026, we're going to see relatively low net new deliveries of multifamily across the nation. And what is going to happen, I think, in 2026 is that vacancy rate is just going to come creeping down, right? It's going to go, it's going to come down maybe 200, 300 basis points in some of these markets, like a Denver, right? And what that's going to do is that's going to drive rent growth. Two years ago, I would have said red growth was going to be very high. in Denver in 2026. And the reason I'm going to say it's going to be more muted absorption this year

is because the demand side of the equation has changed in a lot of these places with a lot less movement. And I think a big part of that is the huge change in immigration policy in this country. For sure. And for the record, I think it's a good thing to have the border under control in there. You know, we won't get into more politics than that. But just that alone is stopping, you know, several hundred thousand net new illegal immigrant arrivals on a monthly basis, right? On top of that, you have deportations. I really don't know what source to believe on deportation data. At this point, I think it's actually wild, wild how hard it is to get believable data on that point. And these are either voluntary or involuntary. But no matter how you slice it, you're getting

close to about half a percent or maybe even a little bit more than that in terms of population differences nationally versus what you would have forecast two years ago, if you just expected those numbers to continue. So there's other forces I play with that, but I think that alone is actually going to have a fairly reasonable impact on and slowing absorption rates over what you might have otherwise thought was going to happen into at this point, zero-all vacancy, and it's going to compound each year. So I think you're going to see that rent growth that I thought was going to be really high in 2026, 27, and 28 two years ago. I think you're going to see it much more muted.

I think you're going to see, you know, something in the 3 to 4% range for rent growth in in 2026. And I think you're going to see something a little bit higher than that in 227 and higher yet again in 2028. So it's still going to be strong rent growth, but it's not going to be, I was putting up some big, big forecast numbers. Like I thought we were going to be bump in double digits in 27 for rent growth, at least in some markets. And I think that that number needs to be tempered now because the demand side is just a little

lower. Rent growth is common, but it's not going to be the party. that in rent growth that I think landlords were thinking was going to happen two or three years ago based on this delivery curve on the supply side. I'm a little more pessimistic than you are, to be honest. Like on a national basis, I think it's going to stay close to flat, maybe one to two percent. No way. No, no, you're going to see, because you're going to see net absorption.

I'm just worried about household formation. I just think the demand side, I, maybe I'm too pessimistic, but I worry about how stretched people are. Like the rent burden numbers are really high. The wage growth numbers are starting to come down. The unemployment rate for young people is really high. So obviously it will be market to market, but on a national basis, I think if I had to bet, I'd say it's between zero and two, not up to four. But we'll come back next year. Hold this to this. I'll go a little bit more optimistic than that. I'd say it's going to be in a three to four range. Okay. Three point zero percent to 4.5% somewhere in that range.

Well, I started around BPCon last year calling this like era that we're in like the great stall. It just feels like everything is stuck, right? And like prices are kind of flat. Rent's kind of flat. Like, what do you think this means one for prices? And then

perhaps more importantly, strategically for our audience. Like, what do you do about this? I don't know. From the pricing, but pricing is so difficult for me because, you know, I look at the Denver total pricing. And I would have said, I would have said there's no way I'm not coming on this podcast here in January 2025, not under contract on my next rental property.

It's deploying another round of that liquidity that I have. And I look around the market in the last three months, two months, and I don't see, I don't see very many deals to buy compared to what I saw in June and January, February last year. This is small multifamily in Denver, so it's a subsector of that. But I'm like, I'm like, why is it actually harder for me to buy? unlevered property right now at a great deal or price point than it was this time last year. I would have expected either that rent growth to start propelling, and that's why I'm finding

that challenge, or I expected the prices to continue going down, and I'm buying that whole curve down a pricing perspective. So that didn't happen either from a pricing perspective. I'm not seeing the prices go down. I'm just seeing stuff not really sell. A lot of people put something on the market and then take it down. But I think that that's the real problem here is nobody really. needs to sell.

Yep. And that may not be the case for a long time. Well, especially in residential, right? Because people have fixed rate debt, so they're just going to hold on. Yeah, a third of properties are own free and clear, right? Or some crazy number like that. It's like 40. Yeah, it's crazy.

Yeah. But I think, I guess the only forcing function could be if rents keep not going up, but, you know, taxes are going up. Insurance are going up, maintenance and repair. So your margins could get compressed, even though things are, kind of stable from a price perspective. And so that might be an impetus for some people to sell. Yeah. Like there should be, in theory, reasons to sell, right? People move. People get divorced. People die. People get sick. People, you know, have problems at their properties or whatever. But,

I mean, it just doesn't seem to be happening yet. So I think that's going to be a challenge here. I don't really know what to make of it. Did you know your house gets bored when you leave? I can't actually prove that, but it probably misses out on the action, the footsteps, the late-night fridge raids. Yeah, when you're gone, your place is basically on unpaid leave. It's sitting there in the dark thinking, I could be contributing right now. Your side room wants a side hustle. Even your Wi-Fi is like, we could be networking. You're on vacation, spending money like it's a sport while your staircase at home is fully capable of sending your income upwards.

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it sounds like, but just not finding the right deals. Yes. And to you, a good deal, you're buying for cash. So you're looking for a 6.5% cap rate.

That's like, I mean, it's a good cap rate in Denver. But is that sort of your buy box? Last year, my moves were really made because I'm leaving my position here.

I need income or I want more income to make, make sure that I feel, feel really good about defending my day-to-day lifestyle. Now it's more like, okay, I'm actually chasing yield if I do this. And I'm just not finding the opportunity that I would have, I would a guess would be here at this point. Yeah, it's interesting. I still look at the Denver market. I'm willing to buy. I haven't bought something in Denver since 2018. And it doesn't look that good to me, to be honest. But other parts of the country, I do feel like we're getting more inventory. Like when

I look at properties in the Midwest, it's starting to open up for the first time in two or three years. I was looking at properties in the northeast in the southeast. It really, I think, is just market-to-market specific, which is how real estate is supposed to be. But it makes it kind of hard, right? Especially for newer investors. Like, what do you recommend to people? Like, do you wait? Do you just, like, set a strict buy box and be patient? Like, what's your advice? I think that the core challenge right now for folks that are not buying all cash is negative leverage, right? And so when you have, when you're when you're buying even a six cap using six and a half percent debt, fixed for 30 years, that is a really, that's a pretty all-in bet on

appreciation and on rent growth, right? And so I think that's the challenge is you really've got to wait. You've really got to hunt for those deals that don't have that negative leverage if you're going to use that or you've got to force value. The opportunities are probably still there for very creative and very ambitious and folks who are willing to kind of rent by the room, do short-term rental work, or find, you know, live in that property where they're sharing with roommates

or find that assumable mortgage. But I think you've got to have a really great deal, great financing, or one of these other cash flow strategies to really get the same advantage, the relative advantage, out of house hacking that I got with a simple duplex purchase.

Yeah. There was a time for most of the 2010s where if someone asked me, where to get started, I just say house hacking, no doubt. like no questions asked. But there's some limitations to it now, especially in really expensive markets, Denver, Seattle, San Francisco. Renting is better. Even house hacking. I think you and I, you and I collaborated on a house hacking calculator once and buying and renting and stuff. And I've put it in

and, you know, renting is cheaper in a lot of places. I would, for certain people, recommend renting and making sure you still invest that money into something like either in an index fund or into a cash-filling rental somewhere else. But yeah, I don't think it is as simple as it used to be. But in a lot of less expensive markets, it does, I think, still makes sense. It might not be as good. But as I've talked about a lot on the show, I think trying to compare your returns now to 2014 doesn't really make sense.

What makes sense is, is this the best use of my time and money today? And for some people, that is still true. But, again, in those expensive markets, that might not be true anymore. Yeah. This brings us in a circle, a wonderful circle, to two things. So you say renting is better, and they're not building new housing. So is rent going to really go down? Like, that's like core to that thesis of like rent should grow over the next three years in particular. And then the second thing, I think the other question I think that someone, you know, I'd be asking myself is, man, like, I believe in index fund investing. I believe in buying U.S. stocks and holding on for the long term.

And I also believe that price does matter at some point. And price in terms of stocks is not just the absolute price or whether it's an all-time high. Who cares if it's an all-time high? It's the ratio, the amount of income you're buying per dollar that you invest. And right now you're paying as much as you've ever paid for that in U.S. history other than a point in time around 1999 or 2000. And that's, I think, the other challenge to this is what are your alternatives? in terms of building wealth. And I think that that's what's confusing me and you,

it sounds like last year, you know, and worries me to a certain degree and maybe worries other people who listen to this. And that's the challenge investors have to figure out. For me, the answer has been diversification, and that's maybe sleep better at night, but it certainly didn't put more points on the board in 2025. I think diversification is the only way to go in this kind of economy.

No one knows. It is as hard to predict or to guess what's going to happen probably as it's ever been. Maybe people always said that, but it does feel that way that a lot of the rules are different now, or there's a lot of variables we haven't had to contend with in the past. And so it just feels super confusing. So I get it. But I find myself gravitating. I've always gravitated towards real estate. But, you know, when I think about what I'm doing in 2026, it just feels less volatile to be. Like, if I can find a good deal, I feel pretty good about buying that and that it's going to be. good. Finding a deal is hard, but I don't have the same level of like nervousness about it that I do with the stock market where I'm like, it's totally out of my control. Like there are forces of AI that I really don't understand. But like real estate, it's like, finding a deal is harder than it used to be. But when you find one, like, I feel pretty good that I can operate that and that my performance

is going to be what I expected to be. Sounds like you hit yours on the head as well. And that's sort of what gives me comfort about real estate in this kind of a climate. Yeah. So, I mean, again, I sleep better at night with it, but I'm not putting more points on the board. So I don't know what that looks like. I think that this year it's kind of like irrationally confused. Or irrationally confused.

Maybe it is rational just to be confused right now. But yeah, I'm not confident there's going to be very large price changes on a national basis for housing in this country in terms of the asset value. I agree. I do believe I'm a little bit more bullish on rent growth than you because of the very low supply that we're expecting in 2026. You know, interest rates are anybody's guess. So on the supply side, low, demand side, still low, but not as low as the supply side. I think you're going to see rent growth.

And then I think interest rates are the wildcard. You know, maybe a new Fed share comes in and lowers rates or maybe they lower rates and we still can't lower interest rates because other things increase treasury yields for various reasons. So I don't know what's going to happen on that front. And then, you know, I think that the stock market, it sounds like price to earnings and price to sales and none of those things matter anymore because AI is just going to come in and blow things up so far and so high that none of the old rules matter. And it just goes to the moon on stocks. Yeah, for sure. Well, thank you, Scott, for being here. It's always fun catching up with you.

Congrats on the family and everything seems to be going well. And we'd love to see all the progress that you're making over at money. when you're ready to share it with us. Yeah, absolutely. Just go over there anytime at biggerpocketsmoney.com and check it out. And Dave, congratulations, another great year with bigger pockets and, you know, more booming business for you in your real estate portfolio. Well, thank you. Thank you. And we'll definitely have you back on soon, Scott.

Thanks for being here. Yeah, let's talk about how wrong I am with that rent forecast. Yeah, we'll see which one is right. We might both be totally wrong. Well, thank you all so much for listening to this episode of the Bigger Pockets podcast. I'm Dave Meyer. Scott Trench. We'll see you next time. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify,

or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K, copywriting is by Calicoke content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.com.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. Bigger Pocket's LLC disclaims all liability for direct, indirect, consequential or other damages arising from a reliance on information presented in this podcast. Getting ready for a game means being ready for anything. Like packing a spare stick. I like to be prepared.

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