Navigating the Multifamily Real Estate Market: Buying, Renting, and Beyond with Corey Reaves

Hey everybody, this is Craig with The Homeowner Show. I'm here with my buddy Corey Reeves. Dude, thank you so much for sitting down with us tonight.

Appreciate you having me.

Yeah, we, we're ready for tonight because Kevin's not here, which means we get to double down on our Astros celebration with the Bregman statue, which really irritates him. So I hope he's watching so that he can see all of the bobbley goodness happening with our, with our first place Astros right now.

I know, right?

Right now. And first time we, we brought gifts for you. So our good friend Tara, who's been on the show as well, uh, she's— she sent over, uh, that for you right there.

Nice.

I don't know what it is, but I was told to give it to you.

Well, um, it, uh, didn't come out of the dryer great. Um, it made it in the dryer and shouldn't have.

Uh-oh.

So, uh, ooh, she, uh, fixed our Uh, logo.

Oh, you got a Grant Cardone shirt going on there.

Yeah, we're heading there. Um, actually, we're heading back to Miami Thursday. So, um, where's that—

where's that going to be at?

In Miami.

In Miami.

Yeah, it's a 3-day business, um, I don't say networking event, but it's all business and it's, you know, it's scaling your business.

Yeah.

Um, how to go to next levels, diving into CRMs, all that kind of stuff.

And he has like that new investment package, right, where you can, you can You don't have to buy the property, but you can be part of the group that invests.

Correct. It's his revenue income sharing program.

Uh-huh. What's that, what's that, what's that program called? I don't— I forget.

It's, you know, revenue sharing program.

That's what it's called.

Okay. Yeah. So what you would do is there's different tiers and you can start at different levels. I mean, even as little as $3,000. But there's a difference between credited and unaccredited. And when you're dealing with multifamily, you want credited if you can afford it.

Yeah.

And that usually starts at $50,000 and up. So how that works is accredited means they have less vacancies in the complex. So that means you're going to make more return on investment.

Okay.

So your ROI is higher, right? So your unaccredited is going to have a lower amount of people, more vacancy, and your return might not be as high, but you can get in with a cheaper amount.

A little bit less, right? Yeah. So, and like, those are— these are platforms for people that have cash on hand, sure, but don't really have the capital to get into like full multifamily.

Doing it all on your own?

Yeah.

Yeah. So there's a lot of groups that are set up where you can put 10% down or 5% down. It's, it's kind of like that except on a gigantic scale.

Right.

So, and they'll call out and then they pay out revenues. Now, if you're dealing with the accredited side, they're going to be paying out even monthly.

Hear that over there?

On your dividends.

I told them to turn the volume down. They didn't listen.

Oh yeah, we're going to hear ourselves. So, um, anyway, make a long story short, on the accredited side, um, you could have monthly payouts.

Oh.

And then on the unaccredited side, it's quarterly payouts. So it just depends, it's different levels. But, um, and then they weren't— we're part of the business coaching program, so we have mentorship every day, we have accountability, uh, we have a coach once a week. Um, it also invites us to the different business classes down in Miami, and then they have one in Scottsdale, and we went to Vegas in February for the 10X Growth Con. Which was amazing. Yeah.

So yeah, those guys do such incredible stuff.

All right. So, I mean, we've met Tom Brady, you know, Mark Wahlberg. I mean, you name it. There was tons of people there. Yeah. It's invaluable, man. Well, you're rubbing shoulders and networking and it's real estate and people and—

It's just good to be around other good people.

Well, people that are entrepreneurs.

Yeah, absolutely. So, I mean, well, and speaking of multifamilies, I know that, I mean, because you, you, you kind of circle all the wagons of real estate. But I mean, like, multifamily is kind of big right now.

It is.

I mean, because there's so many people, I think, that are still waiting. They're, they're in their brains, they're going, I'm waiting for interest rates to come back down, and so I'm just going to rent. And so they either go to an apartment or they rent a house, right? Are you seeing a lot of that?

We do. And the thing about it is the people that are on the fence about, about selling their home are afraid about buying a home, right? So the thing about it is, is there are a lot of rentals right now. There's a rental market's hot, has been. And the people that aren't wanting the house, you know, the yard taken care of, that's apartment side, right? We don't really handle the rental part of it on the apartment side, right? We handle the residential side.

Yeah, right, right. Yeah. So, but I imagine you see a lot of people that, I mean, like, will choose a cheaper option with an apartment or something like that.

Well, apartment rates have gone up. So, um, we just, um, actually signed a deal today for a family that wanted more room and more space, and they're moving out of apartment into a house, and it's only costing them about $150 or $200 more a month to have a yard and more bedrooms and more square footage because apartment rates have gone up so high because of the supply and demand.

Yeah. So, which, I mean, which is why I think we see so many of them building right now.

Oh, absolutely. They're going up. I mean, every corner's got a new apartment complex going on.

Yeah. Yeah. I mean, literally around here. I mean, it's, it's crazy how many of them are going up and like, I, I have to believe that we're building too many.

You know, well, our population's growing too, right? So, and yeah, we're one of the fastest growing places in the United States right now.

But I mean, it's weird how we tend to react economically to these kinds of things. Like, okay, so people need more housing, they need cheap housing, so we're going to build cheap housing. And then we build too much cheap housing. And it, you know, it's just all cyclical. And I think that's what people need to realize is, yeah, the interest rates are higher than they were before, but they're not as high as they've ever been.

No, we can run an average on it and we can show everybody that's worried about interest rates that we're about normal. This is average. And this is not scary territory. This is where everybody makes money territory. If you stay at 2.5%, or 3%, your economy's not gonna survive it. It's too low. So 6% is a good medium, you know, and we're seeing anywhere from 5, you know, 5.75%, 5.75% up to 7.5%. It all depends on credit again and all, you know, what size loan and all that kind of stuff, terms, length, all that kind of stuff.

Right.

And that's why we refer to lenders. Hey, y'all do your gig. Let us know what we can work with. Right?

Right.

So, but the buyers that are afraid to go purchase right now are the people that are afraid to sell.

Yeah.

It's, it's a refinancing option because you can get a better deal on a house right now, if you go buy one, because you can get— you can run into some seller's concessions where you get money at the closing table to help you pay for closing. You can get some money off if it's geared right. It all depends. You got to work with a good real estate agent that knows the market, that knows how to negotiate for you and with you. And that's on the sell side and the buy side, right?

Yeah.

So it's all about making everybody happy. But you can get some good deals on purchases right now. Yes, interest rate's a little higher than it was during COVID but it's still not astronomically high. It's historically about average, to be honest with you.

Yeah.

And refi around the corner. And then what you do— well, I tell everybody is when you go buy a house, you can't ever get rid of the extra money that you paid for that house, right? But you can get rid of an interest rate.

Yeah, yeah. Which, I mean, that's, that's probably the more valuable thing to get rid of.

Absolutely. Yeah. You know, you refi and save yourself $200 or $300 a month. You can't— if you overpay for a house, which is what people were doing during COVID then you're stuck with that payment.

Yeah.

And then you're going to try to sell the house and recoup the money, hoping that it gained enough value that you can actually get it back.

Yeah.

Interest rate. So you pay a little bit more on interest rate, refinance it. Yeah.

Yeah. Well, like, I don't think people realize that. I mean, predatory lending still exists.

Yeah.

And I think it's happening more with cars right now. We recently tried to help a friend out who kind of got upside down on a car. And part of the reason was, is she was at— when she bought it, she was kind of in a bad situation.

Right.

Ended up paying like 29% interest on the loan on this car. Wow.

That's insane.

And just, I mean, like, literally you make payments on it and it just doesn't change the bottom line.

No.

And she like, so now she's got a car that's just not worth anything compared to what she owes on it and can't get away from it.

No, you're stuck with it.

Yeah. So, so we're like, we're not anywhere close to that kind of territory with, with housing.

We're not in that. We're not in the '80s, right?

Yeah.

So the '80s, we were seeing 12 to 18%, you know, and we're not even close. We're, we're 6%. If you average between the 5.25 and the 7.25, you're sitting somewhere between about 6.5, which is— I bought a house back in the early 2000s at 6.25. So it's not out of the ordinary. Yeah, it's just people— it's like sticker shock.

Well, I think part of it is, is like, we, we haven't— the prices haven't come back down from COVID all the way.

Yeah, they're not going to.

They're not. But I mean, it's just— I think it's just going to have to be the new normal.

It is.

So we're kind of on a tight window of time here. One of the things I want to, I want to ask you is, you know, in the past, and it may be the same now, but in the past it's always been kitchen and bathroom, kitchen and bathroom, kitchen and bathroom. That's what people are looking for, right? Have you seen that shift at all, or is it— or are people going into it going, okay, I'm more interested in the layout because I can remodel that kitchen and bathroom? Or do they just want to come in and just it be done?

Kitchen and bath will always be top. All right. Just because that's simply the kitchen is where you congregate. That's where everybody comes over for company. That's where you spend 90% of your time.

Yeah.

Is your kitchen. Yes, floor plan is important. Everybody's going to a more open style concept. Yep. Um, with, you know, hopefully the master or the primary on one side, and you have that secondaries on the other side, um, with somewhat of an open floor plan. The closed-off floor plans are kind of the thing, but, you know, older homes, people are leveling, you know, some of the walls inside and opening them up that way. Yeah. Um, but yeah, if you're looking, kitchens and baths are always going to be a hot topic. Yeah, looking for granite, looking for, you know, what color backsplash it's got.

And they want it ready to, ready to go out of the box.

Move-in ready. Yeah, you know, and that's because it's a big chunk of money to flip those things around and make them the way you want them. Absolutely. And that's one of the things that we do with our listings. The people that are listing with us is we work with contractors that actually will go in and add granite and paint cabinets and change sinks and upgrade that kitchen at a very reasonable price. And then the seller pays for it at closing. So that way everybody makes money and it doesn't come off their bottom line where it comes out of their checking account. And it improves the value of the house and it helps us sell it. And the return's better.

Fantastic.

We do, we do a lot of those for, for our customers with bathrooms and more typically kitchens.

So, I mean, I, I think I've— I mean, just in the few houses that I've owned and sold over the years, I mean, like, seems like I did the most remodeling as I was leaving.

Yeah, everybody does, you know. And then they look at you like— we deal with this all the time— and it's like, I wish I'd have done this years ago, right? Yeah, it's like, it looks so good.

I could have been enjoying this. Right. So if, if people are looking for a, a good real estate group to work with here in South Texas, how do they, how do they get ahold of you?

Uh, it's Reeves Real Estate Group out of Montgomery. And, uh, my name's Corey Reeves and it's 281-932-2423. And then, or you can go to reevesrg.com, which is our website. And then our emails are, uh, corey@reevesrg.com and then ashley@reevesrg.com.

And can they find you social media?

Oh yeah, I'm all over Facebook, Instagram. Put Corey Reeves in, you'll find me.

Awesome. Thank you guys so much for tuning in. Join us next time when we have another great guest. Thank you for sitting down and talking with us and sharing all that with us. Hope you enjoy this shirt.

Oh man, great.

Thanks, bud.

Appreciate it.

Yep, have a good one. Thank you guys.