This Could Be the Best Real Estate “Buy” of 2026

Dave:
Every time we start to think that the market is getting a little less confusing or a little more predictable, some wrench gets thrown into it and everything just feels totally up in the air again. And that can make it difficult to figure out what is actually working in real estate right now. What strategies and what tactics should you be using amongst the constantly changing environment that we’re in. But we can help you answer this question. Today, we are bringing on our dear friend, regular panelist, James Dayner, to walk us through what’s actually working. If you’re a regular here, you already know James. He’s on the show all the time. He’s the host of the A&E show, Million Dollar Zombie Flip, and he is one of the only investors I know who does every kind of investing. He flips, he does buy and hold, he does development, he’s a lender, he does a little bit of everything.
And that gives him a unique ability to help us understand what is actually working in this weird and confusing market. Because even though things seem less certain than usual, which is true, things are absolutely still working as James is about to share with us. And by listening to James and understanding what he’s doing with his business, you too can figure out how to grow your portfolio and achieve your financial goals even during this confusing market. Let’s bring on James. James, man, thanks for being here. I’m excited to pick your brain because as everyone knows right now, it’s been a weird, confusing year in real estate, but you do everything, right? You flip, you do buy and hold, you do burs, you do development, you do private lending, you do everything. And so I just kind of want to understand from you and have a conversation about what’s working, what’s not, and what our audience should be thinking about right now.
So maybe let’s just start with like, what are you feeling about the market today, at least where you operate in Washington?

James:
I feel like ever since the pandemic cooled … Once rates went up, the market’s kind of gone into this weird hills and valleys where it just kind of goes like this. And so- It’s moody.

Dave:
It’s just a moody teenager. I just feel like it goes up and down, but not that much, but it’s just like you never get consistency.

James:
No. Yeah. A moody teenager’s right. You don’t know what you’re going to get. And I will say every year by the end of the year, I’m completely surprised out of all of our businesses, what you’re doing the best and what you’re doing the worst.

Dave:
What surprised you last year? What did you think was going to work the best in 25 and what actually worked the best?

James:
I thought flipping was going to be one of the best years to flip in because we kind of came off this kind of little down in compression and inventory was really low 12 months ago. And going in the spring, I remember even talking to you, I was like, “There’s nothing for sale. Things are pulling up even with rates. And if you have the right product, it just goes out the door.” And all of a sudden, once those tariffs got announced, it slowed down dramatically. And the debt really strangled the deals, market timing. And so flipping ended the flattest by the end of the year. That has been one of the most shocking ones. And I think all the short-term investment and development heavy value add was a lot of transitioning, but I thought this was going to be a little bit of a slower spring and we’ve sold everything.

Dave:
This spring already.

James:
Oh, everything is sold. It’s all gone.

Dave:
That’s so weird. I think

James:
The biggest thing you have to factor into underwriting now is when you’re looking at things. It’s not that the actual facts of the economy, it’s how do people feel about the economy? But then how do you make feelings on underwriting? It’s like the checkbox. Are people happy, sad, or confident? Does that go into your underwriting adjusted returns? But I would say that’s been the hardest part is we have this kind of ever-changing market and the most random things come out of nowhere like tariffs. I wasn’t expecting that. And it just kind of shocks the market and you have to pivot and change your plan. The thing is, everything’s fixable, but you always have to write out whatever inventory you have.

Dave:
So what was that like for you, James? You said last year wasn’t great. Did you have to sell some inventory at a loss, just lower profit margin? And how have your margins now shifted into 2026 when it sounds like things are selling at least faster?

James:
Things are definitely faster. And the good thing is when you go through a transitioning market, like we kind of just went through, you change your underwriting. So when things do sell faster, the deals get a lot better because you’re kind of factoring worst case scenario. But what had happened when the market slowed down, I would say one of the biggest mistakes I made was I was being very reactionary because of what we had seen over the last 12 months because the previous 12 months, when anything would happen, it would kind of slow down, but then always kind of roll back up. And what we saw after the tariffs is it kind of came down and then flattened and just stayed steady. There was no kind of rollback up until this early spring. And that was probably one of the biggest things is not be so reactionary and add more debt cost into these deals going forward.

Dave:
Just for holding.

James:
Just for holding because it’s what eats up the deal. Even the deal that we did, pretty flat. And if you look at the performa, our budget was not very much over and we upgraded it and we hit our ARV

Dave:
Because

James:
Our performa ARV was one, four, five.

Dave:
That’s exactly what we hit, right?

James:
It’s what we hit, but the middle part, the debt cost killed us on that deal.

Dave:
Yeah. Took too long to sell. Exactly.

James:
But we definitely took some losses on some houses because that’s just part of the game. I would say the most random, the deals I thought we would be the worst deals were the best deals and the deals I thought were the best deals were the worst deals. But you just have to kind of make your pivots. And I would say flipping wasn’t great. Development was even worse in 2025.

Dave:
Oh, really?

James:
When buyers become more selective, density is not wanted. People want space. And when there’s a limited buyer pool, a lot of sites that have too many units on one site, they’re hard to sell because they’re just not that attractive for buyers.

Dave:
Yeah. Just for everyone to understand, in Seattle where James operates and where I live, a lot of the development is building ADUs or taking lots and putting town homes on them. So what he means is you’re not doing single family development, right? You’re doing much more density. And that’s why you see that in every market when things start to slow down, those are the kind of things that get hit a little bit. So you’re not doing single family development, are you?

James:
Oh, we do some. So those- Oh, really? The best, actually.

Dave:
Really? So it’s the density thing.

James:
The density was no good. When you’re underwriting development in general, you’re always going, “Okay, well, how many units can I get on here? What’s your average price per square foot?” And it kind of starts to give you the value of the site. So the more units you have, more square footage, the better the deal looks, but it doesn’t tell you how livable and how much people want it. And so going forward, if we’re doing development, we’re focusing on taking a unit off the site. We don’t need to build everything. We need to build what’s livable, and that’s how we have to underwrite it.

Dave:
So when you say development was even worse, were you losing money on those deals and have you been able to get rid of them?

James:
Yes, we’ve gotten rid of almost all of them. We have some sites coming up, but it definitely made us kind of pivot. Now we had some home run deals too. We had one where we did a town home site in Bellevue and our original proforma was at ARV and a sell price of 1.9 million, and we sell them for 2.5.

Dave:
Ooh, that’ll cover up for a couple losses.

James:
It’s a great deal. It took a long time because it was a full permit, heavy density, Bellevue, but it was the right product and got the right price. And so I guess my message to always investors is there’s always going to be the bad deal, but you have to look at the whole picture. If you’re doing a certain amount of deals in development, is it working as a whole or is it not? And so what we’ve narrowed in is we’ve just crossed a lot of stuff off our buy box. No more super dense sites. It’s got to be livable and they have to be in the right locations. But I would say development, yeah, we took a big hit on a town home site because too many units, not livable, no parking, lack of amenities. And this is about a 400 grand clip on that deal.

Dave:
So what would you say then to people who are maybe just doing less volume than you? Is it a bad time to be a kind of person who does one flip a year because you might not be able to balance out a bad deal with a home run like you did?

James:
Yeah. When you have all your chips on one deal, you either look really good if you hit the right market or it can really hurt if you hit the wrong market. And a lot of people buy that way, they’re doing one to two projects at a time. And there’s nothing wrong with that. You just got to make sure when you’re going through more of a transitioning market or a market that’s a little moody, little teenage like, you got to reduce the risk, which is buy what you’re good at and what your contractors are good at. And that’s one thing we really did for 2026 is we have this many contractors, they’re good at these projects. That’s what dictates my buy box, not the performance.

Dave:
So just in summary, you’ve talked about tariffs, we’ve talked about the Moody market, but it sounds to me what you’re saying is it’s not actually the cost increases from tariffs that are impacting the business. It’s more just like the psychological effect that is impacting demand more than your input costs. Is that right?

James:
It’s a combination. I mean, we definitely felt some increases in prices, but the thing about increasing prices is you just change your next budget for your next deal. So you just make it a little bit bigger. And so those are all fixable things. What you don’t know is you don’t know if a war is going to pop off and people get freaked out or there’s supply chain issues. And those are the things that really will make this market moody. And that’s where you just have to go for higher return. But it’s hard in this market to get a very consistent return out of certain asset classes, which are the development and the flipping.

Dave:
Yeah, it’s super hard. I mean, I don’t do a lot of that, but I just see other people. Disposition is hard right now. It changes week to week. It changes month to month. You don’t know what environment you’re going to be selling into. If you asked me four weeks ago, is a good time to sell, I would’ve said yes. End of February, right? We were touching 5.9 in mortgage rates, four weeks later at six six again. And yeah, for some people that’s a financial burden, especially expensive stuff here in Seattle. That’s a big change in your monthly payment, but it’s just the psychology of it. That is going to slow down the market. People, they just had something with a five in front of it. Now seeing a six six, it doesn’t feel great. I mean, I feel the same way. So I don’t blame it.
I actually personally think we’re going to be in for a very slow spring season, but I’m glad to hear things are selling for

James:
You. That’s the thing that is so hard about this and why it’s so hard to get consistent returns because in all reality, buyers should have been buying a lot more in August because the rates were lower and pricing was lower. Now pricing’s up a little bit in the springtime and the rates are higher and we’re still selling. That’s what the logic has gone.

Dave:
Well, this has been super helpful on sort of the development flipping side. Let’s turn and talk about some buy and hold stuff because you do that as well, but we got to take a quick break. We’ll be right back. Welcome back to On the Market. James and I are here talking about how things are going, what to do in this confusing market, what strategies are up, what are down. We talked a little bit before the break about flipping and development, how they’ve been hard. It sounds like you’ve navigated your way through them, James, but what’s your read on the buy and hold market right now?

James:
The buy and hold market, I actually think there’s a lot of potential there, but it all depends on your strategy. And the thing that I’ve seen recently is like the Burr single families are back as far as a strategy goes, you just have to put another step in. And so for 2026, I’m actually trying to pick up 10 BRRR properties.

Dave:
What’s the extra step?

James:
The extra step is you don’t cash flow for the first 10. You just have to be prepared to factor a small negative in to create the equity. And so what I’m doing is I want to pick up some more units, but I want to keep my capital. So I’m going through and trying to pick up BERS and as long as they’re within $100 to $200 negative per property, I’m okay because the goal is to create the 20% equity and there is opportunity right now on especially little small, cheap, heavy fixers. And then I’m really just house banking them and I’m going to build up 10 and then do a giant 1031 exchange because it can get me into that next asset class, which we’re seeing the best buys on. And that’s your small multifamily, like 15 to 25 units heavy value add. Those have been the best buys of 2025.

Dave:
Oh, interesting. Okay. So let me just recap this strategy. So you’re saying you’re going to go and buy 10 buy and hold properties, and you think you get a 20% equity return on each of those?

James:
If it doesn’t hit the 20% equity return, I’m not buying it.

Dave:
Okay. So that’s your goal. And so basically if you do 10 of those, even though you’ll be losing across these a thousand bucks, 2,000 bucks a month, if you do 10 of them, so you’re going to be losing 15, 25 grand, whatever it is, something like that per year, doing 20% equity bumps on these projects, which I assume, I mean, what are you buying them for?

James:
Typically, it’s about 350. That’s about the purchase price. What we’re trying, I would say the average exit when we’re done fixing them, they’re 450 to 550 is the range I’m trying to stay in because that’s kind of the magical number to be in that couple hundred dollar a month negative.

Dave:
Okay. And then what would you walk with? You sell all 10 of these and do a 1031, how much equity you got?

James:
So after selling costs, so the goal is if I can get 10 homes at an average value of 500 grand with 20% equity position. And the goal is to try to get 25%. That’s really the number I’m chasing because that’s a flip return. But if I can get to 20 even, which is 5% less than I want to be, that can create a million dollars in equity. And that million dollars in equity after sell cost is really more like 600 grand. But what that does is it gives me 600 grand to go buy a $2 million apartment deal.

Dave:
Tax free.

James:
Tax free and at the deepest discount that will cash flow because that’s where we see is no man’s land in Seattle.

Dave:
So just for our audience, because I think for regular, you’re not a regular person. For regular people who buy 10 properties in a year, probably not going to do that. Can someone, like you just said, the sweet spots, 12, 20 units, should people be looking at just going straight into that if they have the capital or maybe doing a 1031 from something in their existing portfolio? Asking for a friend, because I have two 1031s coming

James:
Up. Yeah, that is where we’ve seen the least amount of competition. And so I think the key to going in any transitioning market is chase what no one else is chasing. Right now, people want to build daddoes, they want to do density on houses. Everyone’s chasing the single family lot, especially with their new upzoning, whereas I’m going, well, who wants to buy not great cashflow? Because when you look at these, they’re not great cashflow because you have to put so much cash down, but if I can defer and move the money over, the cashflow becomes real. And most importantly, I can create a very big equity position because once you start creating 20% on a $3 million building, I mean, that’s 600 grand you can create just by renovating a building.

Dave:
That’s the sweet spot you’re saying you’re going to try and make 600 grand by buying a 12 to 20 unit.

James:
Yeah. So the goal would be to get BERS, create the 20% equity, create 600 grand in down payment money, then 1031 into another building that I can then create another 20% equity. So those Burrs can double its money over a 24-month period.

Dave:
I mean, that’s very good. I would love to see that. But for people who aren’t going to do all these BERS, do you think this small multifamily is a good move regardless of how you fund it?

James:
Oh, for sure. I mean, that is another no man’s land. Two to four units right now. Mathematically, they don’t really pencil that well.

Dave:
No, they’re terrible. It’s BiggerPocket’s fault. We ruined it.

James:
It’s not good. When you look around, even when you see it and you’re like, “That’s a great price.” You run the numbers, you’re like, “Ooh, this is terrible.”

Dave:
Dude, I was doing it yesterday with a package of five of them or something, and it is a good price. The cap rate’s good, but when you do the numbers, it’s just not exciting enough. It’s not worth the effort or the risk. So I’m seeing the same thing. I see better deals. They are getting better, but they’re still not good, I would say. It’s kind of the way I’ve been why I’m trying to be patient, but you’re not the only person who said this. We’ve had Brian Burke on quite a few times who’s famously timed the market very well with multifamily. And he says right now he thinks the eight to 25 unit is the sweet spot. So it sounds like you guys agree on that. Do you have any advice on how to go out and find those? Because what you look at on CoStar isn’t great.
Are you finding these deals off market?

James:
The best way you can find those kind of deals is to network with commercial brokers

Dave:
Because

James:
They are always out there pounding the phone. I don’t even worry about wholesalers at that point because it’s really … Commercial brokers know how to look at things and they really do follow up with the same neighborhoods. And so the best thing you do is get teed up with 10 to 15 commercial brokers that sell multifamily and they’ll float you stuff all the time. I mean, I probably get 10 to 12 deals sent to me a month out of market at least that I would say is the best way to do it or honestly expired listings.

Dave:
Yeah, even on commercial.

James:
I would say expired and canceled listings was I can’t even believe is coming out of my mouth because everyone talks about that off market and it’s typically a waste of time in my opinion, but that has been one of the best places to look because people want to sell. They just didn’t get the offer.

Dave:
It’s crazy. The one we worked on together that was flat, we basically broke even on it. It’s crazy to me that no one made us an offer. No one even made us an insulting offer for six months. Isn’t that unusual? Are people just scared to do that now?

James:
Yeah, I don’t know. It’s like they don’t really know if they want it or not. Either they’re gung-ho and they’ll throw you the most offensive offer.

Dave:
Yeah. Well,

James:
You know what? It’s not even offensive. I’m always like, “Oh, this offer’s really low.” I’m like, “I can’t blame them for asking.”

Dave:
Yeah, right.

James:
But yeah, that was what was so weird and that’s where you get frozen because I’m like, I don’t want to cut price just to get low offers because we’re just trying to leave where we’re at so we can drag the offer in. And so that’s where you can kind of get stalled out.

Dave:
Okay. So that’s James’s thoughts about buy and hold right now. It sounds like you agree with Brian Burke. It’s commercial real estate, so it’s above four units, but it’s not big enough that you’re getting the institutional people in. That’s kind of the sweet spot that I think we’ve been talking about a lot and that is super interesting. But I want to get some advice from you for newer investors because this kind of stuff, taking down a big project like that, doing 10 Burrs at a time, probably not for a new investor. So let’s hear your advice on that right after this quick break. Welcome back to On The Market. James and I are just talking shop. Want to understand what’s going on, what’s working, what’s not. We’ve gotten his advice on flipping development, buy and hold, but let’s talk about newer investors. If you saved up some money, you got one deal to do in 2026, give me two examples.
One in an expensive market like Seattle or one if you live in a cheaper market somewhere in the Southeast or the Midwest.

James:
The most juice that you’re going to get, I mean, it goes back to flipping. It’s just that it gets the highest possible return in the shortest amount of time if you buy the right deal. You can leverage it to where even if you have 50 grand, you can make that stretch. And if you hit that deal right, you can make a 30, 40% return on your money in a six-month period.

Dave:
Even in this market though?

James:
Oh, even in this market, because it’s all about how you set up the leverage too. You can hit those returns. What I would say is for a new flipper, you don’t have to buy a heavy fixer. If you’re putting in 50 grand in a house and you’re making 20, that’s a good return. That’s

Dave:
A great return. That’s fantastic. I take that all day.

James:
And those deals are doable in the Midwest everywhere. And the good thing about today’s market is leverage and hard money lenders a lot more aggressive, so you put less cash in and you can make 15 to 20 grand and that’s going to give you the highest kick on your investment or flip it with another operator because if you don’t know what you’re doing, partner with someone. And if you’re making half of that and you’re making 30 to 40%, you’re still making 15 to 20% return and you’re doing it passively. Well,

Dave:
That’s very good advice. I can’t disagree. I’m sort of a slow and steady kind of investor, but if you want to get into the business and make some moves, I agree with you. I think also learning, I’ve talked about it a lot. It’s why we’re doing this value add conference in Seattle this week is because I regret not getting good at this kind of stuff earlier in my investing career. And whether you flip or do buy and hold or do development, it’s just a skill that you want to learn as a real estate investor too. So obviously do this conservatively and in a way to protect yourself, but it can be a great way to start your investing career.

James:
Yeah. And another thing that people can do, they can work their way into it is just become a lender. If you’re going to do a passive flip and you can make a 40% return and you get half of that, you’re making 20% of your money. Still comes down to market timing, right? Are you hitting the market right? You might get a little bit more, you hit it wrong, you might get a little bit less. When you can lend out money at 12% and two points or more and get a guarantee out of it to where it’s a lot less risky and you can still make a really good return.

Dave:
Absolutely. I love lending. It’s been great. I do it in funds, but it still makes a lot of sense and a great way to … It’s the best way to get cash flow right now. I don’t know a better way to get cashflow, do

James:
You? I would say out of every investment engine I had in 2025, being a private lender was by far my most profitable because it’s consistent. You’re not going to hit these spikes, but you just don’t have the lows. And what I’ve learned, like the stock market, consistency wins, and it definitely gave me a much higher return on my cash than any other thing. All

Dave:
Right, man. Well, thank you so much for being here. This was a lot of fun. Always appreciate your insights. You’re one of few people I know who does every kind of real estate investing. So you have really the background and the experience to help people understand what’s working and how to navigate this Moody teenage market that we’re in. So thanks, man.

James:
Yeah, no, for sure. Biggest tip for everyone though, in a Moody market, stick to what you know or partner with people if you want to expand out, because that’s where you can really get clipped.

Dave:
Absolutely. Makes a lot of sense. Not the time to take unnecessary risk to try new things, stick to what you know is excellent advice. I had to talk myself into that the other day. I was going to sort of stretch for something and I was like, “Nah, not the time.” Not the time. When you got market tailwinds, that’s when you do it. That’s when you take a flyer.

James:
Dave, I got to know. What is it? What was it?

Dave:
Oh, it was a huge out- of-state, massive gut renovation job. I just was like, “You know what? You would’ve loved it. I should

James:
Have called you.

Dave:
We should have done it together.” Yeah.

James:
If I’m going out of state, I’m following your blueprint on that where … Can you imagine you hire the wrong contractor in a different state and it just goes

Dave:
Sideways? Oh, that’s terrible. Yeah. You need someone there every day. I liked the deal and it was going … The more I did due diligence, it was like every layer of the onion you peeled back, you’re like, okay, now it need … The rental budget just kept going up and up and up and up, but the upside was huge. You get at a good price, but I decided not to. It’s just not the time to do it.

James:
You know what? I think that’s probably the right call.

Dave:
I know, but I was trying to channel you and get the juice.

James:
Let’s do it in our backyard.

Dave:
Yeah, exactly. All right. Well, thank you all so much for listening to this episode of On The Market. By the time this comes out, you’ll have missed our awesome Seattle value ad conference that James is hosting. But if you like the idea of that, hit us up in the comments because we’re going to do more of these things. We want to know what you want to learn and where you want it to be. Put that in the comments for us and maybe we’ll make it happen. James, thanks again.

James:
Yep, thanks.

Dave:
Thanks again everyone for being here and for listening to this episode of On The Market. I’m Dave Meyer. See you next time.