Kiavi and John Burns Research and Consulting (JBREC) recently joined forces to share what's potentially in store for real estate investors (REIs) and brokers in 2025. By combining savvy market analysis and creative investing strategies, industry experts Alex Thomas, Senior Research Analyst at JBREC, and Charles Goodwin, Vice President of Sales at Kiavi, shared their take on how emerging trends could redefine the real estate industry this year.
A pressing issue for many, Alex Thomas opened the discussion by exploring how future government policies could significantly affect the prices of real estate projects. Proposed tariffs on imports from countries such as China, Mexico, and Canada could elevate prices for essential building materials. At the same time, stricter immigration enforcement could shrink the flow of foreign-born construction workers—a crucial labor force segment—potentially ratcheting project costs.
Utilizing JBREC data, Alex illustrated that the tariffs enforced in 2018 almost immediately caused the prices of washing machines and other appliances to rise sharply. Although the potential policy changes in 2025 differ from 2018, this example highlights how even minor regulatory adjustments could create significant, unforeseen ripples in the real estate market.
Keeping an eye on these potential developments could give real estate investors and brokers an advantage over their competition. A solid understanding of macro policy changes could allow for quick adjustments to project budgets and timelines that turn potential pitfalls into opportunities.
Armed with data from the JBREC quarterly fix-and-flip survey, Alex explained that the cost of acquiring real estate properties is rising. Inventory shortages and rising rates could also make it more difficult for would-be real estate investors and potential buyers to enter the market. Given these dynamics, REIs may consider diversifying their portfolios with build-to-rent properties to reach buyers priced out of long-term homeownership.
Alex also highlighted a geographic difference discovered in the Q3'24 JBREC fix-and-flip survey. A much higher share of Midwest and Northeastern REIs reported strong sales relative to expected seasonal norms. At the same time, just 25% of flippers in Florida and 18% in Texas claimed strong performances.
But why would this geographic data matter to REIs? Real estate investors who continue to adapt their investment strategies by exploring new geographic markets could find profitable opportunities as well as diversify their portfolios, mitigate risks, and set themselves up for more sustainable growth.
Alex and Charles had much to say about single-family rental (SFR) opportunities in 2025. The major takeaway? Tracking possible market shifts and obtaining smart financing should remain a priority for REIs. Alex noted that rent growth is slowing in places like Austin, San Antonio, and Phoenix, where rental inventory is continuing to accumulate. On the flipside, cities like Chicago, Miami, and Columbus are experiencing stronger rent growth due to lower inventory.
In regards to financing, Charles reinforced how the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat) is still a go-to strategy. By utilizing bridge loans for the purchase and renovation, followed by a DSCR loan for refinancing, REIs can expand their rental portfolios by freeing up more capital for future investments. Given homeownership affordability challenges and low housing inventory, demand for rentals is likely to remain strong in 2025.
In 2025, REIs will have more avenues for locating and financing real estate properties, and Charles shared several of his favorite methods. With banks and credit unions expected to reduce their exposure to investment property financing, private lenders like Kiavi are becoming the go-to option. Other financing methods are also available, such as private individuals, self-funding, and local hard money lenders (there is no one-size-fits-all in this space). The secret is acquiring fast, flexible financing that will prioritize the deal rather than lengthy paperwork or personal financial history.
Finding a personalized balance between off-market and on-market strategies could help REIs optimize their deal flow. By leveraging direct-to-seller outreach strategies like cold calling, direct mailers, and PPC ads alongside MLS opportunities, real estate investors could create a well-rounded approach and generate more leads.
Networking has been and will continue to be a powerful success factor in real estate investing. Regarding resources for learning negotiation tactics, finding off-market deals, and building strong industry relationships, Charles suggested joining Mastermind groups, Facebook communities, and local meetups. REIs who continue to nurture and engage with their network will have a better chance to adjust, discover opportunities, and prepare for 2025 and beyond.
Now that 2025 is in full swing, REIs should stay on top of potential changes in the real estate market, financing opportunities, and ways to connect with their peers. Real estate investors who adapt to policy shifts, balance on-market and off-market purchases, and tap into flexible financing may be better equipped to stay ahead of their competition.
For those who want to enjoy the webinar in its entirety—we obviously can't recap every drop of knowledge Alex Thomas and Charles Goodwin delivered—be sure to watch it on-demand and download the full presentation.