Jacob Marchini: Before we get started, I do just have to give a short disclaimer. The Entrust Group, Entrust, does not provide investment advice or endorse any investment products. All information and materials are for educational purposes only, and all parties are encouraged to consult with their attorneys, accountants, and financial advisors before entering any type of investment.
Jacob Marchini: Next slide.
Jacob Marchini: Here's a look at the topics that we'll be covering today during the presentation, after which there will be a Q&A session where you can ask us any clarifying questions about the material presented and how the Entrust Group can provide services directed to these types of investments.
Jacob Marchini: Next slide.
Jacob Marchini: Some information about myself. My name is Jacob Marchini. I've been with the Entrust Group for over 9 years. Matter of fact, over 10 years as of last month.
Jacob Marchini: My role here at the company is to provide service and support to new clients and referral partners, and I am CISP certified. That is, I have my Certified IRA Services Professional designation from the Bankers Association of America.
Jacob Marchini: Some brief information about the Entrust Group. We are self-directed IRA administrators. We provide financial services to our clients to use their IRA funds to invest in what we call alternative assets, things like private loans.
Jacob Marchini: private equity, precious metals, and real estate, like we'll be discussing today. We have many staff who have the same sort of CISP certification that I do, and we host monthly webinars for the education and benefit of our clients.
Jacob Marchini: Next slide.
Jacob Marchini: Some stats about the Entrust Group. We have over $5 billion of assets under management across 24,000 plus active investors. We have been in business for over 40 years since 1980, and we provide a single point of contact for the service of our new clients, if you decide to sign up today.
Jacob Marchini: And without further ado, I'll be turning things over to our presenter today, Mr. Neil Bauer with Grow Capitus.
Neal Bawa: Thank you, Jacob, and thank you, Entrust. You know, my association with Entrust has now reached 10 years. Bill used to come see my webinars in 2016, I remember that. And so we've had a, you know, we do this particular presentation every year, once in a year, usually in February or March.
Neal Bawa: And it's a data-driven, chart-heavy collection of insights, eye-popping insights, that hopefully will make… help you to make high-quality investment decisions in this very challenging environment, and then focus on opportunities
Neal Bawa: that the challenges in real estate have created. So, everything that you'll hear about today is focused, it's actionable, it's tangible, there's no upsell, there's no subscription.
Neal Bawa: There's no tier, we…
Neal Bawa: We may not even have a call to action, so this is pure content for fun, it's for learning.
Neal Bawa: And those of you that don't know me, I'm, Grow Capitals, we are quirky and opinionated amateur data scientists and technologists who buy and build large multifamily projects. A portfolio of, projects, 25 properties, is worth about $430 million, and over 1,300
Neal Bawa: data-driven and slightly nerdy investors have trusted us with their money. Dozens of them are Entrust customers, and we constantly get great feedback from Entrust because of their single point of contact methodology, which I wish other providers also adopted.
Neal Bawa: Here is roughly half of our portfolio. We use data science to invest in 8 different asset classes, so multifamily value-add, apartment new construction, single-family built to rent, fourplex built-to-rent.
Neal Bawa: Student housing, build-to-sell townhomes, self-storage, flex industrial. Each of these asset classes teaches us something different, and hopefully has made us better at our job, which is to protect our investors' investment.
Neal Bawa: And our investors, I mentioned, we have 1,350 of them. They love what we are doing. Here's Chong, she's a super experienced investor, and she compares us to much larger companies with a, you know, a lot more projects, and she thinks that we come out ahead.
Neal Bawa: Here's Brian, who invested in one of our projects, where we had to navigate through a very tough time during COVID, and we still managed to, you know, do well with his investment in 4 years, and also managed to offer him a 1031 exchange option at the end for tax saving.
Neal Bawa: Alright.
Neal Bawa: So, I know you heard from Brian, but I just want to mention that this webinar's for educational purposes only. I'm sharing my personal opinion. Doesn't mean you're guaranteed to make a fortune in real estate, so do your own research, consult professionals, and remember that investing, all kinds of investing.
Neal Bawa: is risky stuff. And, don't be shy to type in your questions. If there's a city that I don't talk about, plug it in, and I'll talk about it at the end.
Neal Bawa: Alright, this presentation each year starts with a review of how the U.S. economy did in the last year. After all, if the US economy isn't doing well, you're not going to make a lot of money in real estate, right? These two things are tied together. So let's take a quick look to see how we did.
Neal Bawa: And I like this graphic on the left, because to me, it shows some of the challenges that the economy faced in 2025. I felt like we were a race car economy that had one weird tire, right? And because of that weird tire, even though inflation was fairly flat, it was sticky, and oil prices were fairly low until now, which was awesome, right? And consumer spending was pretty good, while overall job creation was pretty bad, pretty awful.
Neal Bawa: Tariffs, by the way, might have had something to do with that as well.
Neal Bawa: And let's see how the global markets, right, all the different stock markets of the world did in 2025.
Neal Bawa: And here, you can see all of them, right? Note that the US is the thick green line, so that's us, right? So for the year, pretty much all of the markets did well, so India's up 9%, China's up 16%, the US is up 14%, Japan's up 24%. So all of the markets plunged right here when the tariffs came out, but over time, all of the markets did recover. So overall, for the stock markets.
Neal Bawa: Not a bad year at all.
Neal Bawa: The inflation picture for the year was sort of an odd picture.
Neal Bawa: On the left side here, you can see that inflation was actually on trend to go down. In February, March, April, it's on its way downwards, right? All the way down to 2.3%, yay! And then the tariffs hit, and then each month after that, all the way to September, inflation started to pick back up, primarily because of tariffs.
Neal Bawa: And since then, you know, it was sort of flat, so I guess that's the good news. After going up to 3%, it sort of flattened out around 2.7%. Went up it last month, which was February.
Neal Bawa: What about growth, or GDP, right? We use this measure called GDP. In 2025, the US grew at 2.2%,
Neal Bawa: Which, surprisingly, was faster than all the other economies that you're seeing on the page, right? So that's great, right? Keep in mind that the year before, 2024, we were at 2.8% growth. So our growth, while pretty decent, better than all these other guys.
Neal Bawa: was definitely slowing down already in 2025.
Neal Bawa: Now, we ended up with a very dramatic, very unusual job stall towards the end of 2025, last quarter. So I'll leave it for you to read these snippets from various sources.
Neal Bawa: The bottom line, job creation was extremely anemic, especially in the second half of 2025, and especially, especially in the last quarter of 2025.
Neal Bawa: But the whole year wasn't looked like that. So if you look at the jobs in the first 4 months of the year, right here, right? This section on the left, looks pretty normal, right? Nothing special, nothing abnormal about these months. Then we announced the whole tariffs thing.
Neal Bawa: Right? And take a look at what the rest of the year looks like, right? The economy simply couldn't decide whether it wanted more jobs or it wanted less jobs, and so with the year, we ended up with less than 600,000 jobs, right, created. And that's a one-decade low
Neal Bawa: Compared to the 2 million jobs that the economy created in 2024.
Neal Bawa: My friend John Chang, he and I often sit on… at conferences together, works for Marcus & Millichap, and he's got some thoughts about why the job market weakened. Let's take a look.
Audio shared by Neal Bawa: The weakening employment market isn't just being driven by tariffs. It's a combination of policy uncertainty, reduced immigration to the U.S, together without migration, and the growth of AI, which is starting to boost worker productivity.
Audio shared by Neal Bawa: As of the second quarter of 2025, the most recent data available, productivity was up about 5.4% compared to the beginning of 2023. So, the job creation tailwind that bolstered commercial real estate space demand over the last couple years is beginning to ebb.
Audio shared by Neal Bawa: Ominous words. Alright, it's time for Section 2. In the previous section, we looked at all the economic indicators, jobs and inflation and GDP for last year, for 2025. Now it's time to look at some of the forecasts for 2026. What does this year look like?
Neal Bawa: Let's dive into it.
Neal Bawa: Obviously, oil is the 2026 wildcard, right? So we've seen a 50% surge in the price of oil. In some countries, it's double. So, we're just talking about the US, but in the Philippines, oil is twice the price that it was before the war. In India, it's twice the war. In Pakistan, it's twice the war. So, when you look at the world economy.
Neal Bawa: we're not just looking at the 50% increase in U.S. prices, we're looking at the doubling worldwide. So, the Strait of Hormuz is 20% of global oil consumption. Some of the damage that's been done recently apparently will take months or years to recover.
Neal Bawa: And historically, when oil spikes, inflation follows, right? So, you know, that's just normal, because for every $10 increase in the price of oil, and we've seen a lot more than $10,
Neal Bawa: CPI goes up 0.2 to 0.4%. So if it was going to be 2%, it goes up to 2.2. Oil goes up another $10, 2.4. Another $10, 2.6. So this oil and inflation are extremely connected, because you would be shocked
Neal Bawa: that we… a huge portion of our food supply is oil. Like, there's a massive, massive amount of oil that we burn just for our food to be transported roughly 2,000 miles, 1,500 miles on average from the farm to… to basically your local food max.
Neal Bawa: It's also well known that
Neal Bawa: $100 oil for any extended amount of time is a growth killer. So, you know, annual change in real GDP from a short-term conflict is, you know.
Neal Bawa: not that much, right? But longer than 3 months, you see what happens, and then longer than 3 months and lasting damage to oil infrastructure. Maybe not, like, the 1-month kind of damage, but the kind of damage that takes 3 months or 3 years to repair, then you're seeing a very, very substantial damage, to both the U.S. and the world economy. The other challenge is, this challenge is not… this scenario here on the right side.
Neal Bawa: is not just a challenge about lower growth, it's also a challenge about higher growth. So we could have, you know, inflation over 4% combined with low growth.
Neal Bawa: Oil also tends to have a, you know, sort of rate cut delaying effect, so the, the, pie that I want to see here is, on the left is, this is FedWatch in Feb, before the war.
Neal Bawa: This is FedWatch after the war started. Obviously, we've gone from 22% of the people saying, you know, we're gonna have high interest rates, to 41% of the people saying, we're gonna have high interest rates. So basically, it translates into a wait-and-watch scenario.
Neal Bawa: So, These are the numbers that we had for the year before Feb 26th, right?
Neal Bawa: And so we were pretty much looking at a pretty awesome year, right? GDP growth at 2%, not great, but it's okay, we'll take it. Unemployment rate of 4.5%, definitely take that. Inflation at 2.5%, and job growth, unfortunately, was still going to be very low.
Neal Bawa: Now, with the last, you know, 3…
Neal Bawa: three and a half weeks, all of these GDP growth numbers are being moved downwards to 1.5%. Some groups are saying 1%, and this unemployment rate looks like it's going to go up to 5%. Job growth for the year may be zero, right? So we'll see how long the war lasts, but this is obviously the challenge that we're facing.
Neal Bawa: I'm gonna skip past this slide, because the war sort of invalidated this slide a lot.
Neal Bawa: And… same for that slide.
Audio shared by Neal Bawa: So a couple of those slides don't make sense anymore, given what's happened in the last 3 weeks.
Audio shared by Neal Bawa: Now let's dive into real estate.
Audio shared by Neal Bawa: Right? I'm done with all the dense economic stuff.
Neal Bawa: Let's go into the business of forecasting single-family and multi-family performance in 2026.
Neal Bawa: So…
Neal Bawa: The Trump administration is doing a number of things when it comes to real estate, right? Six different things. And I'm going to break these down for you. Some of these are positives for real estate, some are negative, right? I'll start with the one that has the biggest positive effect, and that's something known as bonus depreciation. It allows you to take a truckload more depreciation in the first year.
Neal Bawa: when you buy real estate, than you would normally be entitled to do, and makes people want to invest in real estate. So definitely, by far, the biggest booster of real estate on this page.
Neal Bawa: Next, I'll point out that the immigration policy means that there are going to be labor shortages, right? So between a fourth and a third of all construction workers in the U.S. are undocumented, which means that, as you can imagine, there's now a shortage of these people, which means less homes can be built, less apartments can be built.
Neal Bawa: If you're building homes, or investing in building homes, you know, it's bad news. But if you're a landlord, that means that over the next few years, we'll build less, because we have less workers, which means existing homes will have greater value.
Neal Bawa: The same applies to construction costs. Because of tariffs, and I know tariffs were invalidated, but, you know, Trump's gonna find ways to put them back.
Neal Bawa: So, because of tariffs, the cost of building new homes and apartments is going to go up a lot. So we're going to build less, which is good news for existing landlords, and so that means that rents will be stronger. Not this year, not in 2026, but in 27, 28, 29.
Neal Bawa: Now, for the one that's creating some hype, but is ultimately useless. We've been told that the administration wants to ban big Wall Street players from buying single-family homes as rentals.
Neal Bawa: Just so you guys know, big buyers in the US have been buying less and less homes, because they're really expensive. Even at their peak, they owned less than 2% of all homes in the US. It simply is not a good business model, so very few brick players are doing it, so banning them is really not a big deal.
Neal Bawa: I'm sure Trump will get lots of political kudo points, but it's not going to move the real estate market.
Neal Bawa: Moving on from Trumponomics, let's talk about where mortgage rates are likely to land in 2026. This is all pre-war, right? So all of these smart groups are forecasting where the rates go, and they're in a very tight band, except for Fannie Mae, which is very bullish here on the left, right? They think that rates are gonna go down.
Neal Bawa: The median's about 6.3%. Now, since the war started, we are up 0.3%, quite a bit, right? That's a big swing in such a short amount of time. So, once again, I'm not sure the rates stay up unless inflation stays up.
Neal Bawa: Longer war would have a huge impact on this page. This median number, 6.3, if I was to poll people today, it probably is going to be 6.6 or 6.7, because now people are thinking, well, the war may not end in the next few weeks.
Neal Bawa: These are mortgage predictions. Let's talk about home price predictions in 2026. So all these smart people on the page think that home prices are going to go up pre-war, with the exception of the Mortgage Bankers Association. So, you know, everything… everyone thinks that there's going to be some home price increase, but in a very tight band.
Neal Bawa: I think if I was to go and poll all of these people again today, I think you would see that median 1.7 increase actually being flat.
Neal Bawa: Right? Flat home prices. That's my message. You know, the war happened, I think home prices are going to be flat.
Neal Bawa: But home prices, they tend to vary a lot by state, right? So some states will see a decrease in prices, others will see an increase in prices. One of the 11 states that's projected to have a more than 5% increase is the state of Arkansas. And you're going to hear more about Arkansas later in this presentation.
Neal Bawa: I'm really surprised to see Connecticut up there, to be honest, but not at all surprised to see Kansas.
Neal Bawa: You know what's different in this list? For the first time since this list has been published, not a single Sunbelt state is in the list anymore, because all of those Sunbelt states are seeing negative rent growth.
Neal Bawa: There's a lot of incentive for people to rent, right? Which means it's hard for them to get home price growth.
Neal Bawa: All right, so we show this slide every year in this presentation, and every year, unfortunately, it gets worse. Notice that, until here, 2021, the actual median income and the income to qualify for a median home was about the same, right? So sort of in sync, but starting from here, things broke down in America.
Neal Bawa: Right? Things broke. No one noticed, right? This is really terrible, because today the qualified income to afford a typical home is $121,000.
Neal Bawa: But the median household income is $84,000. So now there is a ridiculous $37,000 shortfall that's opened up in the last 5 years, right? And it's not getting any better.
Neal Bawa: And this slide's not the sexiest, but it sort of ties together the previous slides. The gray line is the median monthly mortgage payment in the U.S.
Neal Bawa: The blue line is the median multifamily rent, right? So take a look from the left here, and you notice that until 2021, these lines were pretty much tracking each other, right? So what the F happens after COVID? Well, at this point, the gap between mortgage payments and rents just goes crazy. It's incredibly large, right?
Neal Bawa: If anyone tells me that after looking at this graph, they can't figure out why they should be a landlord.
Neal Bawa: then I'm gonna send you a free pack of Ritalin, because I think you need it.
Neal Bawa: The affordability gap in the U.S. is astonishing. We have never seen anything like this.
Neal Bawa: And if that last slide was not enough to convince you that you should be a landlord, this next one will.
Neal Bawa: As interest rates spiked, it became very difficult to build in America, right? Interest went up, especially to build apartments. So as you can see, there's been a stunning decline in multifamily starts of 72% from peak.
Neal Bawa: This is based on permits being pulled, so if we continue building under-building apartments, then at some point in the future, maybe a year, two years, three years from now.
Neal Bawa: We're gonna see very strong rent growth, right? It's inevitable, right? Nobody knows when it's going to happen, but it's inevitable that we see strong rent growth if we don't build more apartments.
Neal Bawa: So with that record gap between buying and renting, and with multifamily permits down 72% from peak, you would think, you would think, that every market would be doing awesome with rents. They should probably be spiking.
Neal Bawa: Completely wrong. Rent growth in the US was at 0% last year. 0% flat. Which means that on an inflation-adjusted basis, rents were negative, because inflation was about 3%.
Neal Bawa: A big reason for that, right? That you saw that huge spike in this last slide here, you see this huge spike in apartment construction, right? And that huge spike
Neal Bawa: has basically caused a glut in the marketplace. These apartments are delivering, they're flooding the market, and that's forcing both new apartments and old apartments to cut their rents. This is especially a huge problem in the Sun Belt, right? So you see all of these markets on the screen, especially the ones at the top, like Charlotte and Phoenix.
Neal Bawa: They have such a huge amount of inventory coming in that pretty much all of these markets have negative rent growth.
Neal Bawa: Never happens.
Neal Bawa: And… That's when you should buy.
Neal Bawa: when there's negative rent growth. Because when there's negative rent growth, properties sell for a lower price, because income is down, right? Rentals are based on income. Income goes down, the price that you're paying goes down. And this buying opportunity should hang about for the entire year of 2026, and even into 2027.
Neal Bawa: Why? Because we are projecting that concessions, you know, 1 month free, 2 months free, that kind of stuff.
Neal Bawa: which have been incredibly high in the last year, are actually going to go higher in 2026, right? They're, you know, 34% of all apartments in America were offering concessions last year. This year, we think half of them.
Neal Bawa: in the Sun Belt, it's going to be 100%, right? So, that last supply wave is going to drive up concessions even further, and that's going to drive down the net operating income of apartments, making them even cheaper to purchase. They're already 20-30% cheaper than they were in 2022, right? So once the supply wave ends next year, we do expect these concessions to drop back to maybe here, somewhere in the middle here.
Neal Bawa: Which is why, once again, we think this is a great time to buy multifamily in certain markets in the US. Why not single-family? Well, because there's been no price reduction of single-family in the last 4 years, where multifamily has dropped 25 to 30%.
Neal Bawa: Here are some of the rent growth projections that look like for 2026. I usually have some markets in the 3s and 4s and fives every single year, but not this year. No market's going gangbusters, right? But most of those Sunbelt markets will eventually return to, let's call it, 0% rent growth.
Neal Bawa: Right? But Phoenix and Austin are still exceptions. They're gonna continue having negative rent growth in 2026, because there's so much incoming supply.
Neal Bawa: Done with rents, some of you are more technical, so you're like, what about cap rates, Neil? Well, those of you that understand cap rates understand that when cap rates go up, prices go down.
Neal Bawa: When cap rates… and cap rates have been going up, so prices have been going down. So, as you can see, in 2022, cap rates dropped to an all-time low, and they've increased from there on, and there's been an increase of 130 basis points.
Neal Bawa: Which roughly means a 20-25% decline in pricing. So, this, for those of you that understand this, this is a great time to buy because they've basically plateaued at this point. They're not going up any longer.
Neal Bawa: To summarize, I don't think it's a good time to buy single-family rentals, because single-family has not course-corrected, even though interest rates have more… almost doubled, right? These three bad years, 2023, 24, 25,
Neal Bawa: No change in single-family prices. They haven't gone up much, but they haven't gone down.
Neal Bawa: And single-family prices are actually about
Neal Bawa: 20% higher than they were in 2021, right? So, it doesn't make sense. My math for single-family doesn't make sense, and I'm a single-family buyer myself, so I don't have a bias there. On the other hand, multifamily is now 20-30% cheaper than the peak.
Neal Bawa: And so our summary is that rates will probably only fall once a year. We were going to say twice a year, but now once a year because of the war. And the economy should be stable, unless the war drags on for a while. If it does, you should… you will see negative rent growth.
Audio shared by Neal Bawa: Alright.
Neal Bawa: It's now time for our city-by-city shootout, and I know lots of you are here for that, you know, because every year we talk about the different cities to invest in. So let's get started. But before that, I want to highlight one of my projects. I am so worried about affordability in the United States for people that make less than 100 grand.
Neal Bawa: We always start the shootout with U-Haul, so if you've been following my presentations, you've seen this slide for the last 12 years, and the winner this year was not surprising, it was Texas, so it jumped up a spot from 2 to 1. Florida jumped up from number 4 to 2, North Carolina stayed at 3, Tennessee bumped up a spot, but South Carolina went down from number 1 to number 5.
Neal Bawa: My personal favorite is Idaho, which went up from number 10 to number 8. Also interesting to see Alabama jump into the top 10, because I haven't seen it before. Of course, their biggest losers are always the same two states every single year for the last 10 years. The biggest losers are Illinois and California.
Neal Bawa: Those are the states, right? What about the cities? So, no surprises here, the top 3 cities are the big cities in Texas, and they're simply there because they're so huge, right? Most of the cities have been in this list for a while, though it's nice to see Charleston, South Carolina come in.
Neal Bawa: The big surprise is McAllen, Texas, which seems to be benefiting from its closeness to Mexico, because we're trying to get closer to Mexico, far away from China, right? And so it's… that's… McAllen is benefiting because all the major freeways from Mexico
Neal Bawa: come in through McKellen.
Neal Bawa: My favorite annual report, for 12 years I've been reading this report is the Milken Institute report. And each year, they rank cities in the US, and they do a great job, and this year, their best performing large city is a cluster of cities in Northwest Arkansas, Bentonville, Rogers, Fayetteville. And all parts of these cluster, amazing cluster, half a million people are just doing everything right. So I highly, highly recommend you look at Northwest Arkansas.
Neal Bawa: Huntsville is pretty awesome, but it also has a huge amount of supply, so you might want to wait for 6 to 12 months.
Neal Bawa: The other cities that we constantly see in this list, year after year, are Boise, Raleigh, Provo, Salt Lake. They show up every year.
Neal Bawa: Alright, so those are large cities, but what about small cities? Often the smaller cities have better cash flow, that's what I like.
Neal Bawa: And less competition, that's what I like. And so I'm very proud to see St. George, Utah, at the top of the list. We have built a beautiful community of 118 apartments there a few years ago. I'm even more proud to see Idaho Falls at number 2. It's been a winner twice in the last 5 years, and Idaho Falls has more projects for us than any other market in the US.
Neal Bawa: Pocatello at number 5 is only 40 miles from Idaho Falls, Logan at number 8 is 100 miles from Idaho Falls. So I'm very impressed right now with this corridor of growth that goes from, Provo, up to Salt Lake, up to Ogden, then to Logan, then to Pocodello, then to Idaho Falls, then to Boise. So it's about 400 or 500 miles long, and I think savvy investors might want to look at that corridor.
Neal Bawa: Moving on from Milken, let's take a look at the top rankings from Realtor.com. The winner in a number of rankings this year is Hartford, Connecticut. It's come up a great deal. I don't know much about it, but it seems to be at the top of every list, so something good is happening there. Don't ask me.
Neal Bawa: In previous years, you've heard me talk a lot about Grand Rapids, Michigan, and it shows up again at number 7.
Neal Bawa: Alright, that last list, that was a single-family market list, but what about multi-family, if you're interested in apartments?
Neal Bawa: Well, San Jose is doing really well because of the AI boom, so is San Francisco, but those are expensive markets, right? Amongst the more reasonably priced markets, I want to draw your attention to Indianapolis at number 5, and Philadelphia at number 6. Those are two very interesting, reasonably priced markets, so we've been tracking them for a while. I'm particularly impressed with Indy.
Neal Bawa: Done with the city list, so it is my long-standing tradition to finish this presentation with me sticking my neck out and making two predictions, right? So I pick the best up-and-coming market in the US, usually smaller markets, and then I pick what I consider to be the best market for real estate investment in 2026.
Audio shared by Neal Bawa: Ready?
Neal Bawa: Our pick for best up-and-coming market is… Philadelphia. Surprised.
Neal Bawa: Philly used to be one of the three biggest cities in America at one point, hundreds of years ago, and this amazing metro has much potential, and only now is it finally beginning to move in the right direction and live up to its potential. Yes, it's deeply bureaucratic, and that's something that you will live with.
Neal Bawa: But there's actually a lot of good stuff going on in Philly, so check out this up-and-coming market.
Neal Bawa: And now for our best market of the year, and it is, no surprise.
Neal Bawa: Northwest Arkansas. Number one in the Milken reports. We're very proud. We picked this market several weeks before Milken came out with their report. We also have a project in there that we bought in 2025.
Neal Bawa: Right? You might say, come on, you picked it from the report. Yeah, but the report came out 4 weeks ago. I already paid $2.5 million for a piece of land.
Neal Bawa: 7 or 8 months before that.
Neal Bawa: So, so much is happening here. America's richest family, the Waltons, live here. As they get older, they're in their 70s and 80s and 90s, they're getting more and more philanthropic. Walmart itself is continuing to grow, and, you know, earlier this month, Walmart became the first traditional retailers to be worth a trillion dollars.
Neal Bawa: Right? That's $1,000 billion. So Walmart is headquartered in northwest Arkansas, in Benton Mill. They're continuously expanding and growing. There's a lot of other great businesses here today. Very scenic market, very young population. Just about everything that is… can go right is going right for this area. So check it out, it's truly worth the trip. It's very pretty.
Neal Bawa: And that is our show today, folks. Hope you liked it.
Neal Bawa: And what you learned today is a tiny fraction of the incredible and always free information that we have on multifamilyu.com slash club, so if you're interested, we are planning 6 webinars this year, so keep coming, and hopefully we can place a link in the chat. And now,
Neal Bawa: please, you know, any questions that you have for the content, or even questions that weren't in the content, or is, you know, I'm happy to… to answer those questions.
Jacob Marchini: Thank you very much, Neil.
Jacob Marchini: Okay, so…
Neal Bawa: You wanna do your wrap-up first, Jacob?
Jacob Marchini: Yes, let's go ahead and move on to the next slide.
Neal Bawa: wrap up while people, go ahead and type in your questions while Jacob does the wrap-up, wrap-up.
Jacob Marchini: So yeah, we can move on to the next step. So, just for those of you who might be attending today.
Jacob Marchini: for the first time, who might not have a lot of information about the Entrust Group, if you have enjoyed this information, you've got a lot of ideas for how to use
Jacob Marchini: your retirement funds, IRA funds to invest in real estate. You can get started with us by following these steps. First, you would want to open an Entrust Group account. You can do that easily by going to our website.
Jacob Marchini: And just filling out an application.
Jacob Marchini: Next step would be for you to fund your account, to move money from your previous retirement accounts at, you know, any other 401Ks, IRAs, or other type of retirement plans you might have. You can usually move
Jacob Marchini: assets or money from those accounts to an Entrust Group account, and then you can direct us to purchase your investment by filling out some paperwork, and we'll, of course, walk you through that step of the process.
Jacob Marchini: So you provide us with everything we need to make that investment.
Jacob Marchini: Nope.
Jacob Marchini: Next steps for this presentation, we will be sending you a replay and additional resources via email for everything that was covered here. You'll have, you know, the slides for this presentation that Neil has given us.
Jacob Marchini: As well as, you know, a video replay, more education, etc. And you can… well, this project… this webinar was supposed to happen last month, but had to be rescheduled, so the next.
Jacob Marchini: The next webinar in April will be for Stop Overpaying, The New Strategy for Smarter Roth Conversions, as a informational webinar.
Jacob Marchini: Right? And if you have any more questions about self-directed IRAs, please feel free to ask me directly, but you can also find information on our website and on our social media channels.
Jacob Marchini: All right, and that is it. We'll be moving on to the question and answer session. If you move on to the next slide there, Neil, your information and mine should be right there on screen, so anybody who has any questions that we might not get to during the Q&A session, or if you want to ask us a different sort of question after the presentation, please feel free to reach out to either of us directly at these.
Jacob Marchini: Different informations here, as displayed on the screen.
Jacob Marchini: Alright, so moving right into the question and answers here, Christian Frey asks, I noticed that Detroit has some very attractively valued properties, albeit with commensurately low-ish rents, but based on my Zillow feed.
Jacob Marchini: There seem to be a lot of price cuts and unsold inventory, which seems at odds with other urban markets. Do you know what's driving this, and do you have a view on that market, Neil?
Neal Bawa: Yes, actually, Detroit is one of the markets that I get asked about the most, because of the fact that they have these low-priced homes available, much lower than almost any other market in the US. So I just want to tell you this, Detroit, in 1959 was the second largest city in America, right? So it was Motor City.
Neal Bawa: And since then, it has lost 1.5 million people in population. It continues to bleed, it continues to lose population, and the metro isn't losing population, the city is.
Neal Bawa: So there's very nice…
Neal Bawa: neighborhoods in Detroit. One of the things that's known in real estate circles is, if you don't understand the metro of Detroit, do not invest in it. One of the reasons why a lot of these properties are so cheap is that people have bought them, and they're trying to get rid of them by selling them to you, because Detroit tends to have very high expense ratios. Expense ratios, most people, you know, investors don't understand them, they're everything.
Neal Bawa: Your property taxes, your insurance, and all of the breakage varies by metro. Believe it or not, Idaho Falls is the lowest expense ratio in the United States of all major markets.
Neal Bawa: Detroit is very much on the high side, so your property taxes, insurance, basically kill your profits in a large number of cases. Tenant quality is also low in most markets, most parts of Detroit, especially in the city, though a lot of the suburbs are good. So what I would say is this.
Neal Bawa: when it comes to Detroit, if it looks too good to be true, it usually is too good to be true. But there are high-quality
Neal Bawa: neighborhoods, yes, the prices there are much more expensive, but if I was foretold, you know, here's a gun on your head, you're forced to buy in Detroit, I would buy in those high-quality, higher-priced metros that are around the periphery of Detroit, I would not buy in the middle.
Jacob Marchini: Moving on to another question by James Moraf. What do you think of the Chattanooga, Tennessee market, Neil?
Neal Bawa: So we follow four markets in Tennessee, right? Obviously, Nashville is the biggest, and Knoxville is the second largest.
Neal Bawa: And then there's Memphis, which I am not at all fond of. And then there's Chattanooga. Chattanooga's about 500,000 people, so Memphis is a little bit larger than Knoxville, and Nashville's the biggest market. Nashville's really expensive, so it's a great market that I don't want to buy in because, you know, I like some cash flow. Knoxville's sort of okay, so is, you know, Chattanooga. So Knoxville, Chattanooga, second and third markets, they're sort of next to each other in terms of
Neal Bawa: investability. I want to let you know that there are many markets in Chattanooga that have… still have a huge amount of supply. So what I would say is, I like Chattanooga.
Neal Bawa: you may not want to buy for the next 6 to 9 months, because there's still a lot of pain happening because of the supply delivery. The good news on Chattanooga is, after the supply delivery, which all of it comes in in 2026,
Neal Bawa: there's nothing being built for the next 3 years. That's pretty awesome for, you know, for rental. So, I like Chattanooga. Memphis, even though it's a larger market, just continues to lose population, and the crime is too high, so I can't recommend Memphis. I'd take Chattanooga over it.
Jacob Marchini: And then James also follows up with, I presume you take non-IRA money. Sorry, Entrust. You win some, you lose.
Neal Bawa: Oh, no, we take IRA money. I mean, 20% of all of the money invested in our projects, about $350 million total, about 20% of that has been IRA money. I mean, we have so many Entrust customers, so many.
Jacob Marchini: Yeah, but I think the… I think the question here was, you take money that doesn't come from IRAs in your projects, correct? Neil? You take private investors as well as…
Neal Bawa: 80% of our money is private cash money, 20% is IRA and 401K.
Jacob Marchini: Well, there you go.
Jacob Marchini: All right, and then Gordana Vukhotic, says, Neil highlighted Philadelphia. I saw Chicago on his list, also Wisconsin. Can he speak to some… to this some more as far as investment?
Neal Bawa: Sure. Just because a city is on that list doesn't mean that I'm recommending it. These lists are from, you know, high-quality providers, and a lot of them basically have
Neal Bawa: metrics and numbers and whatever it spits out, they throw it out there. My role is, I've been doing this presentation for 10 years and looking at all of these lists for 10 years, and I try to point out the ones that are rising, because, you know, you want a city on the rise.
Neal Bawa: Or, repeat, right? So, do I think Chicago is a good city to invest in? Heck no. Do I think Wisconsin is? Kinda, but there are better options, right? I gave you basically a dozen cities that potentially could be better than Wisconsin.
Neal Bawa: But would I invest in Chicago? Absolutely not, right? In the real estate market, we basically say, Chicago has 3 options.
Neal Bawa: Bankruptcy in 1 year, bankruptcy in 2 years, or bankruptcy in 3 years.
Jacob Marchini: There we have it.
Jacob Marchini: Alright.
Jacob Marchini: And then Gordona appreciates your question.
Neal Bawa: Welcome.
Jacob Marchini: there.
Neal Bawa: Welcome.
Jacob Marchini: So, that appears to be all the questions that have been asked so far, so a short Q&A session there, unless anybody has anything else.
Neal Bawa: We're good?
Jacob Marchini: Seems like it. So, for those of you who might think of something a little bit later, as happens so often, again, our information is right here on screen.
Jacob Marchini: We have one additional question from Carlos Contreras. Any suggestion where AI is developing?
Neal Bawa: Just the usual places that have a lot of technology. So I… you'd go to ChatGPT and say, what are the 10
Neal Bawa: big markets and the 10 small markets in the US, where, you know, that are heavy with technology. We're just seeing AI develop along the same line. Obviously, by far the largest amount of AI investment, by far, is in the San Francisco Bay Area. So, which is the most expensive market in the U.S. for a reason. I don't expect it to get cheaper anytime soon, I expect it to get more expensive.
Neal Bawa: But amongst, you know, cheaper markets, Burlington, Vermont might be a good one. Don't build there. But, Burlington is a market that's doing really well for AI. A smaller market, about 250,000 people. Bernie Sanders is from Burlington, Vermont.
Neal Bawa: And Dallas is a great market, but please note that Dallas has had negative rent growth for 10 quarters, and it is expected to have negative rent growth for the next 4 quarters as well. Overall, if I simply look at the fundamentals from a 10-year perspective, the best market in America is Dallas.
Neal Bawa: Why would you want to buy now when you can just skip the one year of negative rent growth? Dallas probably have positive net rent growth next year. So, I just say, hold on, Reginald, wait for a year. Dallas is not going to become the second best market in America next year. It will still be the best market in America, right, from a 10-year perspective.
Neal Bawa: But why go in now? You're gonna have negative rent growth.
Jacob Marchini: And there you have it.
Jacob Marchini: Alright, that appears to be it for the…
Jacob Marchini: Last several questions that were answered, so we'll give folks just a little bit more time, just a, you know, 30 more seconds to see if anything pops up.
Jacob Marchini: But if nothing happens in just a little bit, I think we can call that Q&A session.
Neal Bawa: Awesome.
Jacob Marchini: All right. Well, Neil, thank you so much for your time, as always. We're looking forward to another one next year with another interesting and informative presentation.
Jacob Marchini: For those of you, again, who might have any questions after this presentation ends, you can reach out directly to either Neil or myself for information. Thank you all very much for coming to our webinar today.
Neal Bawa: Thanks so much.