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Today, we’re delighted to welcome back Neal Bawa, 
a recognized expert in data-driven real estate investing. Neal is widely known for cutting through market hype and using objective data to guide his macroeconomic outlooks and investment strategies. His background in computer science and passion for data science brings a refreshing perspective to an industry often influenced by speculation and headlines.
On this episode of Wealth Strategy Secrets of the Ultra Wealthy, host Dave Wolcott teams up with Neal to kick off 2026 with clarity and deep market insight. Neal shares his crystal ball predictions, taking listeners beyond mainstream media narratives by focusing on the fundamental trends that will shape the next 12 to 24 months in real estate. Drawing on his robust research and practical experience, Neal offers practical advice for investors navigating uncertain markets, including commercial multifamily, single-family housing, cryptocurrency, and more.
Neal opens up about recent shifts in multifamily markets, why supply and demand imbalances may set the stage for both challenges and opportunities, and how external forces like immigration and interest rates are impacting market conditions. Beyond the numbers, he shares contrarian views on cash flow, the evolving role of tax efficiency, and why energy and artificial intelligence are quickly becoming major drivers of real estate value.
In This Episode
- The macroeconomic outlook for single-family and multifamily housing in 2026
- How immigration, supply, and interest rates are reshaping market opportunities
- Neal’s contrarian take on cash flow versus tax efficiency in real estate
- The hidden role of energy and AI in driving future real estate investments
People have gotten wiser in terms of really looking at property taxes and the impact of property taxes and insurance on Sunbelt markets. So you may want to look at Sunbelt markets where property taxes and insurance are not so bad, like Raleigh, for example. Neither property taxes nor insurance are anywhere near as bad as Texas, so that might be a market to look at.
Welcome to the Wealth Strategy Secrets of the Ultra Wealthy podcast, where we help entrepreneurs like you exponentially build wealth through passive income to live a life of freedom and prosperity. Are you tired of paying too much in taxes, gambling your future on the stock market, and want to learn about hidden strategies for making your money work for you? And now, your host, Dave Wolcott, serial entrepreneur and author of the bestselling book, The Holistic Wealth Strategy.
Hey everyone. Welcome back to Wealth Strategy Secrets of the Ultra Wealthy. We’re kicking off 2026, and if you’re an investor trying to make smart decisions this year, you’re probably asking the same questions everyone is: Where are the real opportunities? What should we avoid? And what’s the macro backdrop that’s going to shape markets over the next 12 to 24 months?
Well, that’s why today’s episode is so timely. Neal Bawa is back on the show. Neal’s known for his data-driven, no-hype approach to macroeconomics and real estate investing, cutting through the headlines to focus on what the numbers actually say. And today, he brings the crystal ball for 2026.
In this conversation, we unpack the shifting dynamics in single-family housing, why multifamily’s “survive to ’25” thesis didn’t play out the way the industry expected, and what 2026 could mean as supply, immigration, refinancing pressure, and interest rates collide.
We also get Neal’s contrarian take on cash flow versus tax efficiency, where he’s bullish across U.S. markets, and why AI and energy—yep, energy—is actually the hidden driver behind the next wave of real estate winners. Plus, we’ll hit his current outlook on Bitcoin, precious metals, and why Airbnb may be facing its toughest environment yet. If you’re allocating capital in 2026 and want a sharper lens for reading the tea leaves, you’re going to get a ton of value from this.
Neal, welcome back.
Thanks for having me on the show again. It’s a pleasure to be back, Dave.
Yeah, Neal, always a pleasure to have a discussion with you. And this discussion is going to be particularly timely as we really kick off 2026. I’m really curious about your outlook on the macroeconomics. What are you seeing in terms of fundamentals? Where could there be some opportunities, as well as areas that we need to avoid?
So I know that I’ve asked you to bring your crystal ball today, and we won’t hold you to that. But I think getting different perspectives is really a great way to actually form our own perspective, right? And especially avoiding some of the typical media outlets and that sensational stuff. And what I love about your approach is really this data-driven type of approach—to look at objective data, try to quantify that, and see where we can find opportunities. How can we read the tea leaves best?
So since you’re a repeat guest, Neal, for the listeners, feel free to go back and hear Neal’s origin story of his tech journey and all of the great accomplishments. But today, let’s kick off. Why don’t we start at that macro view and really talk about what you’re seeing for 2026?
Getting different persperctive is really a great way to actually form our own perspective.
Sure. Well, for those of your viewers that don’t know, I’m a computer science graduate. Data science is my area of interest. I call myself an amateur data scientist, and my goal is to sort of try reading the tea leaves and try not to react to the sensationalism of the media.
Right. Everyone’s got an agenda. I’ve got an agenda too. But what I’m trying to do is to reduce that agenda down and filter it down. So it helps to basically look back at 2025 before we start looking at 2026 so we can contrast it. 2025 was an okay year for home prices. So when we’re looking at single-family, it was an okay year for home prices that went up about 2%, 2.5%, 3%. So basically, home prices went up with inflation.
And the single-family market continued to be highly resilient, unlike commercial, the multifamily office space, which has seen significant price declines—20%, some markets up to 30%. We have not seen a home price decline since interest rates started going up. So home prices peaked in 2022. Since then, they’ve been increasing, but sort of with inflation. So I suppose you could say they’re still at peak, adjusted for inflation. And so we haven’t seen huge increases in home prices, but they haven’t gone down.
Now we’re beginning to see some cracks emerge in that, and I’ll give you the reason why. So nationwide inventory was really, really low in 2023, 2024, and in the first half of 2025. And the big reason for that was the lock-in effect, right? So people like me, who refinanced in 2021, 2022—I have 1.75% on a big home, on an expensive home, right?
If I was to basically sell my home and buy it back myself and get a new loan today, I’d go from 1.75% to 6.5%. And so my mortgage payment goes up $5,000 a month—60 grand a year. So obviously, I don’t want to do that. So I’m locked in. I can’t leave. And so a lot of people were locked in. In fact, a very significant portion of all loans in the United States were under 5% in the last three years.
Now, that can’t go forever, because people move for reasons of death and divorce and jobs and things like that. So now we’re beginning to see, very clearly over the last 12 months, more and more people moving, and the percentage of people with low interest rates going down. So that’s going down, and that means that there’s more incentive for people to move. And so the inventory in the housing market has increased dramatically in some markets—very dramatically.
And so now we’re beginning to see many metros in the U.S., even some of the big metros, have negative home prices. So we’re beginning to see home prices drop in places like Austin, San Antonio, and a number of other hot markets. And what we’re seeing is that there’s just more and more inventory coming home, staying on the market longer. So it’s possible that we might see a home price drop in 2026.
When I look at all of the major providers of information, whether it’s Fannie Mae, Freddie Mac, National Association of Realtors—all the usual guys that predict home prices—they’re still predicting a small increase in home prices. Some are saying 1%, some are saying 2%. Nobody’s really saying 3%, which would be over inflation.
So on an inflation-adjusted basis, I think home prices in 2026 could actually be under inflation. So on an inflation-adjusted basis, you might actually see a slight, very small decline, but nothing spectacular. Now, with that sort of background, we look at what happened in 2025 in multifamily. When we used to go to conferences in 2023 and 2024, I’d stand up on stage and I would repeat something that I believed, and a whole bunch of other people in the industry believed.
There were three words, and the words were: survive to 2025. Because we knew bad things were happening in the multifamily space. In ’23 and ’24, prices were falling. Eventually, prices for multifamily—for apartments—fell in some markets up to 30%. And so our hope was that 2025 would be the turnaround year where we would see a reduction in concessions, an increase in rents.
Well, we were wrong. The industry was wrong. 2025 was not in any way a turnaround year in apartments. Because a lot of the last part of the supply—right, there was this big supply cliff—and the first cliff hit in ’23, and the second one hit in 2024, and the third one hit in… Well, the first and second cliffs did have to deal with the declining values. But overall, rents stayed solid.
So rent growth was positive—very small, but positive—in ’23, positive in ’24. And we also saw occupancy staying up high. So until the end of 2024, we were still around 94–95% occupied. But in 2025, that final set of supply, that final wave of supply, it hammered the rents. So for the year 2025—and there’s different sources, and so the numbers are slightly different—Yardi Matrix says we had no rent growth. So 0% across the board for the U.S., negative for markets in the Sunbelt.
So Sunbelt markets, whether it’s Orlando or Dallas or Austin, those kinds of markets were negative. Overall, the U.S. was flat, and Rust Belt markets were positive. So that sort of evened out the number at about 0%. Rent growth is not horrible. Obviously, your rents are not falling, right? Unless you’re in the Sunbelt, they’re not falling. They just didn’t rise this year. But you have to remember that inflation for the year was at 2.7%. So on an inflation-adjusted basis, we as landlords lost 2.7% of our rents because our payroll went up, our insurance cost went up, all of our property taxes went up.
So we still had to deal with a negative year. What was worse was that unlike ’23 and ’24, where occupancy was strong, this year, in the second half of 2025, we saw a drop in occupancy. So nationwide occupancy, depending upon which vendor’s numbers you’re looking at, has dropped by roughly 1% or a little less than 1% this year. And we were hoping that 2025 would be the year where occupancy would go up 1%.
So as it goes, 2025 was a very depressing year. The only thing that we can say that was positive that came out of it was that we had either three or four—for the moment, I can’t remember—I think it was 425 basis point interest rate cuts. And on that basis, something good did happen in 2025 in that cap rates stopped decompressing everywhere in the United States.
So remember for your listeners: when cap rates go up, prices go down. Cap rates up, prices down. And so cap rates were going up in ’23, up in ’24. In ’25, they didn’t go up at all. They stayed at that end-of-2024 level. And in some markets, they started to fall, which is a good trend, right?
Prices go up when these cap rates fall. So selected markets saw cap rate drops. Overall for the U.S., cap rates were flat or maybe a little bit down, which is good. And so on the cap rate side, we started to see the light at the end of the tunnel in 2025. But it wasn’t the turnaround year that everyone was hoping for.
Now, when we’re looking forward to 2026, of course it’s now the great white hope of a turnaround in the multifamily market. But there’s negatives and there’s positives. On the positive side, there’s less supply in 2026 of new apartments than 2025. On the negative side, there’s less demand.
Because we’ve basically now shipped off, you know, maybe a quarter million to a half million immigrants to their respective countries. We get to have their jobs, but the demand for housing goes down because they’re not living in apartments anymore. Because all of these immigrants, they mostly didn’t live in single-family homes. They lived in apartments, usually Class B, Class C apartments. And if they’re not here, then nobody’s living in their apartments.
So we’ve seen that impact of the immigration crackdown on occupancies in the second half of this year. Mostly, occupancies were falling. And we don’t know how many more of these people are going to be shipped back next year. Maybe not so many. Maybe we sort of are done with this wave—but who knows, right? Unless we’re ICE, we don’t know what the numbers are going to look like.
And so assuming that the immigration crackdown continues at the same pace as 2025, we may see negative rent growth in certain markets that are very sensitive to immigration—certain markets that have a very high number of immigrants. So Texas obviously is an example of markets like that. Florida has a lot of immigrants, and markets that are not sanctuary states.
Because sanctuary states are slowing down the sort of… with immigrants leaving using various methodologies, like California is doing it and so is Massachusetts. But we’re not seeing non-sanctuary red states follow those practices. So a lot of people are leaving, and that is affecting their occupancy, and that’s affecting their rent growth. So there’s that negative there.
On the positive side, we think that the U.S. economy could grow a bit faster than 2025, so that might create some demand. We certainly see some green shoots there. I’ll say that this recent thing with Greenland has sort of rattled me, but apart from that, I was actually pleased about the fact that tariffs didn’t take down the U.S. economy. Tariffs are a one-time hit. You sort of take a hit over the six months following the tariffs being implemented, and then things sort of even out after that.
So I was actually very pleased with how the U.S. economy did in the second half of the year absorbing the tariffs. And so hopefully this Greenland thing does not develop into a new tariff war, because if it doesn’t, then I think that we did quite well with the tariffs piece. Again, pros and cons, I don’t have a very clear outlook on how multifamily will do in 2026. There is one last piece for multifamily that’s not tied to occupancy or rents or GDP growth.
We have a lot of properties, including some of mine, where you can’t kick the can down the road anymore. We kicked the can down the road in terms of refinancing those properties instead of selling them at a loss. We did that in ’23, we did that in ’24, and we did it surprisingly well in 2025.
2025 was supposed to be the year where you couldn’t kick the can down the road. Banks have been friendly. Some banks have even basically just made up an extension that they didn’t even have on their docs. But I think 2026 is that reckoning year where a lot of properties come to market. I have a property that’s coming to market, and that is selling at a price that I don’t even want to mention. But I kicked the can down as far as I could, and I couldn’t kick it down any further.
And I think many others—you know, tens of thousands of properties—are going to be in that place.
So from a pricing perspective, that’s going to put a cap on pricing. I don’t think prices go down, but I think they don’t go up, because there’s a lot of supply that’s going going to come to the market. But from a rental growth perspective, if we can not get into another trade war, I think that we might see some positive green shoots in various markets, especially in the second half of 2026.
I think we struggle in the first half, and then we see some positive signs in the second half, because most of the inventory—that last wave of inventory—came to market in ’25, but it’s still getting leased up. It takes a while. Everyone’s offering concessions, and then towards the end of 2026, when you’re getting to 70, 80, 90% occupancy, you pull back on the concessions, and all of a sudden people can raise rents.
So what about from a supply and demand perspective?
Right.
You mentioned the immigrants being a significant part on that demand side, really moving off. But there’s still a lot of people talking about a huge shortage in terms of overall housing for the country. I know this is specific to particular markets and everything, but there’s definitely a thesis out there that is still saying that we have a big shortage in terms of home availability. So how would you really distinguish that?
So I think one of the key things is this: there’s things that people say just because they’re in the trade and they want that trade to look good. When the United States says we are 4.7 million homes short, or Fannie Mae and Freddie Mac say we are 5.5 million homes short, you notice that they’re using a word called homes. They’re not saying apartments, right?
So when you go to the National Association of Realtors, they’re using a home terminology. They’re not talking about apartments. So I think that the shortage of apartments is not the same as a shortage of homes, and those numbers are often mixed together. Basically, people imply that just because we are 4.7 or 5.5 million homes short, we’re 4.7 or 5.5 million apartments short. That’s, you know, in some ways, obviously there’s a connection there, but it’s not actually as relevant as you might think. So it’s not a direct connection.
In other words, I think in terms of apartment shortage, we are somewhere between 1 million and 2 million units short, right? So if you go to the NMHC conferences, the numbers that they use are much more reasonable. But that shortage is different from the glut that we have. So you can simultaneously have a shortage and you can have a glut.
The shortage is long-term. It’s systemic. We haven’t really found a way to fix that 1 to 2 million apartment shortage. But in a very short amount of time, if you bring a large number of apartments into a particular market—let’s say Dallas, San Antonio—these are good examples. San Antonio and Austin are perfect examples.
If you bring a large amount of supply into a great market—and by the way, San Antonio and Austin are both phenomenal markets for a 10-year investment perspective, incredible markets, great prospects—but in the short amount of time, if you bring in a very large amount of supply, as we’ve done to Austin, you can have concessions basically kill rents, and you can have negative rent growth, not just in Class A properties, but in B and C as well.
So we are seeing a short-term gluttony across the United States, with the last portion of that delivery being in 2026. This doesn’t change the fact, Dave, that what you’re talking about—a systemic shortage of apartments—does occur. And that’s going to help us with significant rent growth in ’27, ’28, and ’29.
It’s clear now that 2027, 2028, and 2029 are shaping up as the three years of insufficient supply. Insufficient supply. I’ll give you one example. San Antonio’s multifamily permits, as measured recently, were 90% down from their peak in 2022. Ninety percent down. Now, it’s reasonable to assume that that peak in 2022 was way above demand, right? It was just too much. But it’s also equally reasonable to assume that San Antonio’s demand hasn’t just dropped off a cliff.
It’s actually one of the brightest prospects for growth from a 10-year perspective in the U.S., because Dallas is getting expensive and Austin’s already expensive. And so a lot of people run towards San Antonio.
And so what we are seeing is that while San Antonio has been unquestionably building too many units in the last few years—which is unfortunate, I’m part of that process, but we were one of the developers who got caught in that—there’s also green shoots. Because I think San Antonio is doing too little permitting at this point in 2026. And it’s possible that that creates a demand gap in ’27 or ’28 or ’29.
So those three years are looking to be interesting, with 2026 being that in-between year. So I was writing a presentation for a conference, and I called it Three Years of Pain, Three Years of Gain, which sounds like a catchy sort of title.
But the real title was three years of pain, a gap year, and then three years of gain. So 2026 is shaping up to be that gap year.
Yeah, interesting way to look at it. And then what about from a market perspective?
The Sunbelt was typically a favorite over the past five years for multifamily, just really strong as the dynamics from people just moving to better climates, better growth opportunities. Where would you say are some of the best markets to kind of look at then in the next three years?
So one of the key things is that investors who got disillusioned with the Sunbelt started looking at the Rust Belt. Because before, there was no reason to look at the Rust Belt. The Sunbelt was doing great. Prices were still reasonable in the Sunbelt until the last three or four years. Until that 2021, 2022 spike, prices were pretty reasonable in the Sunbelt. The growth was there, the profits were there, the cap rates were compressing.
And so the Sunbelt story until 2022 was pretty flawless. Obviously, in 2023, things turned around and people were like, what else is out there? And also what happened is, as the Sunbelt got more and more expensive for rents, and some of the Sunbelt markets started to become the unaffordable markets instead of being that attraction, we started to see people leave. Right.
So if you look at U-Haul trends, Texas and Florida are still very strong, but now we’re seeing more trends in markets like North Carolina and South Carolina. Those markets are basically becoming strong. Idaho is becoming strong because Boise is still reasonably priced. So we’re now starting to see some alternate markets.
So I’ll mention both—Sunbelt-ish markets. You know, Idaho is not part of the Sunbelt, but Sunbelt-ish markets are… You know, there’s markets in Utah, there’s markets in Idaho. So Boise is a great market. Idaho Falls is a great market. Salt Lake City is currently still dealing with that overwhelming supply, but if you could give it a gap year, I think SLC is a phenomenal market, and everyone should be looking at Salt Lake City.
And then, you know, when you’re looking at Rust Belt—or sort of the Midwest, if you prefer to call it that—Indianapolis and Kansas City definitely look very good. Oklahoma City, which is not a market that has been a favorite of mine, I have to basically admit that that’s a market that is doing well. We haven’t seen much population growth in Tulsa, but we’ve seen more in Oklahoma City.
So I’m starting to say, yeah, Oklahoma City might be a market to look at. Crime’s still an issue there, but obviously there’s pockets in Oklahoma City that are good. Indianapolis is a success story. Again, pockets are good. Other pockets have high crime. I’d probably look at the northeast quadrant of Indianapolis, where the city of Carmel is.
That area seems to be very good.
Noblesville, Carmel.Those are really strong markets and our growth markets. And then we’re beginning to see some interest in markets like St. Louis. I don’t think of St. Louis as a growth market, but certainly there seems to be some institutional interest not coming from me. But there’s no doubt that institutional money is starting to go into St. Louis. We’re also seeing money going to Detroit, which I think has to do with one guy.
There’s this billionaire that ran a real estate.com company. I can’t remember what it is. Dan somebody. Right?
His first name is Dan. And he’s basically revitalizing downtown Detroit and sort of creating some hype around it. So Detroit, Indianapolis, Salt Lake— not Salt Lake— Kansas City and Oklahoma City are interesting ones to look at if you want to look beyond the Sun Belt. And I’m not saying that the Sun Belt is a bad story. I’m saying people have gotten wiser in terms of really looking at property taxes and the impact of property taxes and insurance on Sun Belt markets. You may want to look at Sun Belt markets where property taxes and insurance are not so bad, like Raleigh, for example.
Neither property taxes nor insurance are anywhere near as bad as Texas. So that might be a market to look at.
Neil, you’ve also done a great deal of data-driven, really objective perspective and analysis on the Fed and interest rates. What would your view be kind of going forward here into 2026?
So, I mean, here’s the thing. That crystal ball doesn’t work because for the first time we are seeing broad-scale manipulation of the Fed. So I don’t think that the Fed should be cutting interest rates, but I think that the Fed will cut interest rates. Because the Fed has become, for the first time in its history, politicized. We now have a person on the Fed that has no right to be there, no reason to be there, but he’s there and he’s basically talking about four interest rate cuts all the time in the media. And that’s very unfortunate. I think that the independence of the Fed was one of the greatest things about America. I think it’ll hurt us in the long run.
But the fact that the Fed is now a political body and a tweet can actually change the direction of the Fed means that they’re not going to be as data-driven. And so I think that the Fed will cut rates two or three times a year. I think they should be maybe cutting once, not more than that. I think we’ve found this sort of that middling model economy where you don’t cut too much, but at the same time you’ve got inflation in control. I think the real risk is that—
If the Fed cuts three times, I—Don’t know what happens to inflation. Towards the end of the year, you could start seeing some inflationary issues. The other big problem that I’m seeing is that currently, if we don’t back out from this whole Greenland, get into a NATO conflict madness, we are seeing other countries dumping Treasuries. And so we have seen sharp increases in interest rates in the last week—That since, you know, before this podcast was recorded. And I hope it’s only temporary.
I pray it’s only temporary, but I—Don’t know if it’s going to be temporary.
Yeah, interesting. And you know, would you say from just your overall thesis standpoint, right, with the continued inflation, however you want to look at it, inflation devaluation really of the dollar fiat currency that, you know, your thesis still holds up in terms of buying real assets, looking for cash flow, looking for tax efficiency. Do you still believe in, you know, commercial real estate as one of your, you know, core asset classes to combat that?
I believe in 2/3 of that thesis. I don’t believe in the cash flow part. I think that that bus has sailed, or that that ship has sailed. I believe in the tax benefits. If anything, the tax benefits are incredibly strong because of the BBB, the new bill. The tax benefits are phenomenal. So are the opportunity zone benefits. For those people that are not aware, the opportunity zone bill is back in a new format called OZ2, and it is even better than the previous time.
And I thought the first time it was pretty phenomenal. The second time it’s better. You don’t have to hold onto a property for 10 years to get the benefits. You can do it in five, which is a typical life cycle for a project. So I think OZ benefits are incredible. The bonus depreciation benefits are incredible. So if anything, that’s just a 10 out of 10. And I think that the long-term devaluation of the dollar, long-term inflationary trends are definitely pointing in the upward direction.
So having real assets is very beneficial. I just think that the cash flow part of the situation is so badly affected that we would need very substantial rent growth, to be honest, and say yes, this is a cash flow business.
Yeah. Interesting. And what are your views on cryptocurrency right now?
I’m bullish on cryptocurrencies because I think that the reason that Bitcoin’s gone from a dollar to $100,000, there’s only one real reason, right? So there’s one smaller reason, one bigger reason. The smaller reason is crypto is easier to use for people doing illegal stuff, you know, whether it’s drugs or guns. You know, crypto is just a great haven for those kinds of people. But the bigger reason is that every government in the world continues to spend more money than they make. So this is not a US thing. We’re actually not even the worst at it. I mean, China’s the worst at printing money that they don’t have. Japan’s pretty bad at it.
The US is actually getting worse at it. Let’s just put it that way. We were pretty decent at it until about 2010. In the last 15 years, we’ve been pretty bad at spending money that we don’t have. But the bottom line is that everyone’s spending money that they don’t have. No one has a plan. And so if you look at it, the global economy is a Ponzi scheme.
And this is a Ponzi scheme that’s very hard to break because it’s a sovereign Ponzi scheme as opposed to some individual investor’s Ponzi scheme, which can be broken. Sovereign Ponzi schemes take a very long time to break, and they have God knows how much more runway we have. I don’t know. But I think in the end everyone ends up like Argentina or Pakistan, and we are all going in that direction. And I like to say, I used to say that we, the United States, are the best-looking pig in the pig sty. And I just can’t make that assertion anymore. So I’ll just say we’re one of the better-looking pigs in the pigsty.
Yeah. Interesting. And do you have a belief in your portfolio for precious metals, especially gold, silver right now?
Same reason as Bitcoin. I think if you think about it, gold and silver, I own both. And I own physical gold and silver. I don’t buy ETFs. I actually physically hold silver in bank lockers. They’re very analogous at this point with Bitcoin though, there tend to be— the fluctuations don’t always match each other. Meaning sometimes you’ll see gold going up and Bitcoin going down at the same time. It doesn’t matter.
I think that gold, Bitcoin— these are 10-year holds. I think when people start thinking of these as short-term investments or speculative investments, that’s when you go wrong. I have not purchased gold or silver for 10 years. I had a substantial amount, but I’ve not sold any. And I have no intentions of selling my gold or silver. I have not bought Bitcoin, with some small exceptions, for 10 years. And I’m not interested in selling my Bitcoin either. I think these are great insurances for the potential of a worldwide reset, which could occur in the coming decade.
They’re phenomenal for those instances, but they’re not the best investments. I consider them to be insurance that may go up in value. Obviously, I can say that until about two years ago, my gold and silver were, from an investment perspective, pretty bad. That’s not the case today. As we’re recording this in 2026, we’re seeing shockingly high numbers for silver. Gold’s doing really well too. So basically, over the last 10 years, it’s now become a decent investment. Not quite great, but decent.
Double-digit maybe. But I still don’t look at it as an investment. I’m simply looking at it as I now have more insurance.
There’s been a lot of talk and probably a lot of the listeners out there that really got into, say, multifamily syndications over the past five years, right? And prior to that, you know, 15 years, you know, was a super strong run. You couldn’t, you couldn’t really go wrong with multifamily. And so I think a lot of people are really probably trying to scratch their head and figure out, you know, what were, what is really the core systemic issue of what happened really in multifamily or commercial real estate. How do they get their arms around that problem and really learn from that experience so that if they come back into the market, what is going to be the right circumstances with which they come back in?
I think the systemic issue was that the industry, the multifamily industry, didn’t have an issue. It’s the development industry that became over-bullish and overbuilt, right? And I was one of those developers. So I think that the multifamily industry failed to understand that supply is a bigger factor than demand. And when you have too much supply, you can have that holistic long-term demand-supply gap, and you can still have negative rent growth, huge concessions, and expanding cap rates. Also, the multifamily industry really did not factor in just how big a deal interest rates are. And also the fact that there’s nothing magical or special about the multifamily industry.
It’s like any other industry. When interest rates go up, your price—
Per unit is going to go down. And I think that there was a belief that the industry may be special, that it may be exempt from some of the laws of money. I have to say, in 2021, there are times when I felt that, and there was a portion of my head saying, no, no, no, that’s not right. And maybe there was a portion of—
Everybody’s health saying, no, no, that’s not right. And now people are, they fully understand it’s a business. And if your costs of interest are going to go up, your prices are going to go down. So in an odd way, I think that the multifamily industry has matured.
In an odd way, I think that—People are much less likely to make aggressive claims. So I personally think that it’s a better industry to invest in in 2026 than in 2022, even if you’re investing— With the same guy or gal.
Yeah. That’s a really good way to look at it.
Right.
Because I think people need to really, you know, kind of come at it from the 30,000-foot level and really, you know, really truly make an assessment, right? And the debt component is so much, right, of the overall investment. And I think, you know, the use of floating rate debt, I mean, look, let’s face it, I mean, the banks were all underwriting these loans as well, right? And you’ve got KPs supporting this and everything.
So, so the, as you say, the entire industry was actually supporting the growth, and it seemed quite unstoppable at the time. In fact, it was even hard to get access to even get into opportunities. But I think, you know, that being said now, as we kind of look back with hindsight, with wisdom, I like that perspective, right, of saying that the entire industry has matured, right? So, so the banks have now, you know, changed, right, underwriting for that.
We’ve changed, you know, due diligence and underwriting and how we look at deals, different types of criteria, right? And changed all of that.
So rent growth projections are lower, right?
Yeah.
Cap rate exit projections are more reasonable.
Yeah.
You know, expense ratios have come into line where people are saying, hey, our expenses are not going to grow one and a half percent a year. They’re going to go up two and a half or even three percent a year. So I think that there’s a, you know, maturity comes when there’s problems. Maturity doesn’t come when everything’s going well. So there’s, there’s a maturation of the, of the industry. And yes, you know, the overall profits may be much lower than the, the, you know, 10-year period leading up to 2022, but it’s still significantly higher than other comparable industries. So we have to basically understand that, that cash flow is just a smaller component of this business today.
Maturity comes when there’s problems – maturity doesn’t come when everything’s going well.
Yeah, for sure. Neil, what do you think in terms of how would you share your advice really around investing in 2026? And if, like, you know, let’s say someone had a million dollars to deploy right now, right, and so they’re deploying it in 2026, it’s easily got a five-year horizon to it, plus—
Right.
But they need to make that capital allocated in a smart way, right? How would you be really thinking about that?
Well, I’ll give you a slightly facetious answer, but I mean, if I had a million dollars, I’d probably put it all in Idaho Falls. And the reason for that is AI. Artificial intelligence at this point is what’s driving the stock market. Wouldn’t you say that, Dave? I mean, the stock market is basically an AI market, correct? So the biggest phenomenon of our times is AI, and the biggest bottleneck to AI is energy, power. What’s the number one bottleneck that prevents us from having data centers everywhere in the world? It’s not land. We’ve got plenty of land, right?
It’s power. There’s no energy. And there’s so much resistance right now, massive resistance to people understanding that if you build a data center in their neighborhood, their power cost is going to double. So nobody wants a data center in their, in their, in their market. And as a result, power— the data center— the companies that are doing AI, whether it’s Nvidia or Meta or Microsoft, Google, they understand that they have to get into the business of power. And they’ve understood this very well. If you haven’t heard of this, please understand that Google is now in the business of power.
Microsoft is in the business of power. Microsoft bought Three Mile Island, right, which has been closed for a long time, and paid Constellation billions of dollars to restart that nuclear reactor. Google bought a nuclear reactor, I think it was in Indiana, and that’s a 500-gigawatt – 500-megawatt reactor that they’re restarting, and they’re actually building new reactors next to it. So Meta is doing it. So if you look at all of these companies, everyone understands that for AI to continue along its path, and for their market caps to keep increasing by trillions of dollars, they have to invest billions and billions and billions of dollars into energy. And the kind of energy that makes the most amount of sense is nuclear.
Because nuclear is not, you know, it used to be that nuclear was bad for the climate lobby.
But eventually those people wised up, and now as far as they’re concerned, they realize that nuclear is emissions-free. So it’s not it. There’s no emissions with nuclear. And also nuclear has a track record that’s pretty good in terms of safety, at least in the US. And so everyone on the climate side is all of a sudden like, yay nuclear. And everyone on the Republican side is nuclear because it supports the growth of AI.
And the best place in America to be to invest in is if there was only one place in America that can certify nuclear reactors, and that is Idaho National Labs. If you are building any kind of nuclear plant, small, big, tiny, you’ve got to go to INL to certify that reactor. So this sleepy little lab all of a sudden needs thousands and thousands and thousands of PhDs. And it would probably take two decades, three decades to replicate INL somewhere else in the US, so the chances of that happening in the short term.
I mean, you can’t just build a nuclear lab in a year or five years. You’d need at least, what, 5,000 PhDs. Where are you going to find 5,000 PhDs that understand nuclear physics, right? So it’s not a short-term fix. So everyone basically has to go to INL. So Idaho— in my mind, Idaho Falls has a very unique advantage over the next 10 years because you can’t build a nuclear pilot nuclear plant unless you’re connected to Idaho National Labs. So that’s my facetious answer.
Now I’m going to expand it into like, you know, I’m not talking about Idaho Falls anymore. I’m basically talking about where, where it makes sense to go.
I think it makes sense to go to places that are somehow tied to AI. Once again. Unfortunately, there’s the bad side of technology, the hype. Like places like Austin got hyped up, and did you know, the reality didn’t match the hype, right? But the same thing’s happening again with AI. So if we’re going to spend two or three trillion dollars in AI, you need to go to markets that are seeing that boost. So maybe smaller markets like Burlington, Vermont, or bigger markets like Phoenix, Austin again.
So there’s a lot of these markets that are benefiting. Raleigh, I think, is a very unique example because it doesn’t have the property tax and insurance problems of some of these other markets, but it has a huge network of universities. And so I think it’s seen as an early leader in AI. So those are the markets. And unfortunately, it goes back to some of these being Sun Belt markets.
Yes, I know all the bad stuff that happened, but it doesn’t change the fact that a bunch of the AI money is going to go in there. There’s one other market that actually has benefits that I want to mention, and that’s Reno. So Reno and I’m going to say this in a way that hopefully people get it.
It’s a joke. Reno is the cheapest Californian market in Nevada. Cheapest Californian market in Nevada, right? So the biggest boom that’s happening in AI is happening in the San Francisco Bay Area.
I live in Silicon Valley, so I know, right? So I mean, just home prices are going crazy, occupancy is through the roof, rent growth is back. All the good stuff that the boom times, they’re happening right now in the—
San Francisco Bay Area, right?
But this is really expensive. And so you’ve got to have some kind of an outlet, something that’s cheaper. And so the venture capital folks that basically drive the Bay Area’s economy have already decided they need to have a place that’s outside of California. California, with its nutty crazy tax regime and its super stupid ideas for what they want to do going forward, that they need to have an outlet, but they still need to be in the best market in the world, which is Silicon Valley. Well, the best thing to do is to basically build a location in Reno or in Carson City.
And that’s why so many of the VCs now have a location there, and they do their accounting out of there. So they can afford to basically move their taxes to Nevada, which is no local tax or no state tax state, and still be close enough. So what we are seeing is this crazy trend on Friday evenings in the San Francisco Bay Area. If you’re driving up Highway 680 or 80, it’s this relentless stream of cars all heading for Tahoe, where they ski on Saturday, and then they go on Sunday to Reno and Carson City, to their VC offices.
And then Sunday evening they come back to the Bay Area. So Reno is very unusual in its benefits right now because it’s so close to California.
Wow. Really great insights, Neil. Appreciate your time as always, and coming on the show, especially timely again for this type of year and how we should be really be thinking about some of the different events that are happening. So many dynamics, of course. If people would like to connect with you, what is the best place?
So we love giving away data. We believe like we want to be the Wikipedia of real estate commercial data. And so we do six webinars a year. Thousands of people attend these webinars. They’re completely free. There’s no subscription, there’s no upsell, there’s no gold tier. It’s completely free and always meant to be free. And it’s available at multifamilyu.com, so that’s multifamily followed by the letter u dot com club.
If you go there, you’ll see all of our content. And I like to do content on things that have nothing to do with real estate, just touching. Like for example, there’s AI webinars there, there’s climate change webinars, there’s webinars on Airbnb, webinars on industrial. So, you know, just anything that sort of touches commercial real estate and has an impact on it, we like to do webinars on these. And these are 60, 70-slide data-driven, fun webinars. They’re about 75 minutes long, so check them out. And some, some people actually just watch the shorter versions of them that are like 10 or 15 minutes for insight. So multifamilyu.com club. Great last question for you.
What, what is your view on Airbnb going forward? I’ve heard a lot of, you know, mixed thoughts, and we clearly just finished the year out, so a lot of people looking for that, you know, short-term rental tax loophole. So what are your thoughts on Airbnb moving forward?
My general sort of 30,000-foot national overview is that it is a bad market. It has very, very low cash flow, very high risk. There are individual pockets, obviously, that are phenomenal based on certain premises, people moving from one place to the other, that kind of stuff. So lots of pockets for Airbnb, but as in national markets, I have never seen Airbnb margins be worse.
Interesting. Awesome. We’ll leave it at that. Neil, thanks again for coming in.
Thanks for having me on the show.
Thanks for listening to this episode of Wealth Strategy Secrets. If you’d like to get a free copy of the book, go to holisticwealthstrategy.com, that’s holisticwealthstrategy.com. If you’d like to learn more about upcoming opportunities at Pantheon, please visit pantheoninvest.com, that’s pantheoninvest.com.