Latest / Own More Doors / #52 Mid-Year Fourplex Market Update 2025 | What Just Happened?

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#52 Mid-Year Fourplex Market Update 2025 | What Just Happened? · Own More Doors

• 0:00
  SPEAKER_00: What's up, everyone?
• 0:01
  SPEAKER_00: It's Juan Weezar with another Own More Doors podcast.
• 0:04
  SPEAKER_00: Today's podcast, it's just going to be me on, and I'm going to be talking about mid-year review of the four-plex market in the city of Long Beach.
• 0:11
  SPEAKER_00: So I know this is very niche, very niche.
• 0:13
  SPEAKER_00: But listen, no one else is tracking this data.
• 0:16
  SPEAKER_00: So uh if you're someone who invests in Long Beach, who owns in Long Beach, this is this is the only place where you're going to get this data here because other people simply don't care or they don't want to spend the time or they're moving on to bigger, better properties.
• 0:29
  SPEAKER_00: But so today's show is going to be covering mid-year review of 2025 and going back and looking at 2024, 2023, and 2022 and letting you guys know from a fourplex perspective, specifically a fourplex, how the market is doing.
• 0:47
  SPEAKER_00: So here we go.
• 0:48
  SPEAKER_00: And I'm gonna this one's gonna be short and sweet, but I just want to let you know.
• 0:52
  SPEAKER_00: Okay.
• 0:54
  SPEAKER_00: Halfway through the year, how many fourplexes in Long Beach have sold?
• 1:00
  SPEAKER_00: Drum roll, please, 43.
• 1:03
  SPEAKER_00: We've had 43 fourplex sales the same time last year, mid-year review of 2024, how many fourplexes had sold?
• 1:13
  SPEAKER_00: 20.
• 1:15
  SPEAKER_00: In 2023, how many fourplex had sold?
• 1:18
  SPEAKER_00: 25.
• 1:20
  SPEAKER_00: And in 2022, how many fourplexes had sold?
• 1:22
  SPEAKER_00: That's 37.
• 1:24
  SPEAKER_00: So, folks, what we saw from 2022, we saw this scale down of fourplex uh selling.
• 1:32
  SPEAKER_00: Okay.
• 1:33
  SPEAKER_00: So in 2022 we had 37.
• 1:36
  SPEAKER_00: Again, this is just looking at the first half of the year.
• 1:38
  SPEAKER_00: In 2023, there was 25, and in 2024, there was 20.
• 1:42
  SPEAKER_00: And now we we have this massive increase of fourplexes selling.
• 1:47
  SPEAKER_00: Why is that?
• 1:47
  SPEAKER_00: Well, I'm gonna get into it.
• 1:49
  SPEAKER_00: The the short of it, I guess it's this investors are out there and they were waiting for massive price reductions.
• 1:57
  SPEAKER_00: Now, if you've been listening to me, there are massive price reductions, just not in the four four and under range.
• 2:05
  SPEAKER_00: It's in the five plus.
• 2:06
  SPEAKER_00: And so if you're looking for the best bang for your buck, the biggest price reduction, you're gonna be looking at five units and above.
• 2:14
  SPEAKER_00: But today's show is only about fourplexes.
• 2:17
  SPEAKER_00: And so, given that, we've seen this increase.
• 2:19
  SPEAKER_00: So sales are up.
• 2:20
  SPEAKER_00: So if you're a fourplex owner, what does this mean?
• 2:23
  SPEAKER_00: This is terrific news.
• 2:25
  SPEAKER_00: More fourplexes are selling now than they have in the last three years.
• 2:29
  SPEAKER_00: That's a plus.
• 2:30
  SPEAKER_00: If you're a seller, if you're an owner, you're thinking, wow, this is great.
• 2:35
  SPEAKER_00: More fourplexes are closing.
• 2:38
  SPEAKER_00: The reason why there was a slowdown in the last few years is because interest rates were high, investors were very cautious, and they were just waiting to see will the deals get better.
• 2:48
  SPEAKER_00: And in the fourplex market, because our financing is pretty much fixed for 30 years, there wasn't this mass fluctuation.
• 2:56
  SPEAKER_00: Another thing that I'm encountering is the popularity of DSCR loans.
• 3:01
  SPEAKER_00: And so traditionally, if you're looking to get a four-plex with um as an investment, you would have to come in in most cases.
• 3:08
  SPEAKER_00: And now they're in most cases, you're looking at 25% down if you're buying it as an investment.
• 3:15
  SPEAKER_00: Now, I get it.
• 3:16
  SPEAKER_00: Some people are gonna say, oh, but what if it's a VA loan, then zero down?
• 3:19
  SPEAKER_00: 100%.
• 3:20
  SPEAKER_00: So again, I'm just saying from an investment perspective, you typically need a 25% down.
• 3:25
  SPEAKER_00: The DSCR loans, and not every property is gonna qualify, but the ones that do, you could buy it with 15% down.
• 3:32
  SPEAKER_00: And so that's that most investors, like, and I've said this before in other shows, investors want to buy with as little down possible.
• 3:39
  SPEAKER_00: Okay, so good news.
• 3:42
  SPEAKER_00: Good news if you're a owner of a fourplex that sales are up, significantly up, and we should be uh happy about that.
• 3:52
  SPEAKER_00: And I think if you're a buyer and you were cautiously thinking, like, I don't know, like I don't know if this is the right time to buy.
• 3:59
  SPEAKER_00: I'm just really nervous.
• 4:00
  SPEAKER_00: This whole rent control thing, um I just don't think it's a good idea.
• 4:05
  SPEAKER_00: I think I should buy out of state.
• 4:07
  SPEAKER_00: This should tell you something that other buyers in your situation are deciding that, hey, it's still a good time to buy.
• 4:12
  SPEAKER_00: So I think um from a confidence perspective, what we're seeing here in the fourplex market is a plus.
• 4:19
  SPEAKER_00: Um, what I've been recommending people to do is sell your fourplex at a premium and so get top dollar for it and then go buy uh a five plus.
• 4:30
  SPEAKER_00: Go buy an eight unit building like I just did and buy it at 25% discount.
• 4:34
  SPEAKER_00: Okay.
• 4:34
  SPEAKER_00: Uh, or more.
• 4:36
  SPEAKER_00: That's really what I want you to do.
• 4:37
  SPEAKER_00: But not everyone's gonna do it, but that that's my professional opinion.
• 4:40
  SPEAKER_00: Okay, so moving on, average close price.
• 4:43
  SPEAKER_00: Um, what you're gonna see here.
• 4:44
  SPEAKER_00: Oh, and then for anyone uh listening to me on the podcast, um, I'm showing graphs.
• 4:49
  SPEAKER_00: And if it's easier, I believe it's gonna be easier.
• 4:52
  SPEAKER_00: I would just recommend go over to our YouTube channel, YouTube.com forward slash Sage Real Estate.
• 4:57
  SPEAKER_00: That is where our biggest platform, our biggest followers, that's where our biggest community of supporters, like-minded individuals, people who believe in building wealth through apartment ownership, this is where they're gonna be.
• 5:08
  SPEAKER_00: And so, yes, we're trying to grow our podcast, but with the podcast, we do have some limitations.
• 5:13
  SPEAKER_00: And so again, go over to the YouTube channel to see these graphs.
• 5:16
  SPEAKER_00: But if you're driving, just hear me out.
• 5:19
  SPEAKER_00: Okay, 2025, the average fourplex price on closed, okay, 1,439,000.
• 5:28
  SPEAKER_00: Okay, 1,439,000.
• 5:30
  SPEAKER_00: And so there's um there's 2,600 forplexes in the city of Long Beach, okay.
• 5:37
  SPEAKER_00: So that's great.
• 5:38
  SPEAKER_00: And so the average fourplex price.
• 5:41
  SPEAKER_00: So if you have a fourplex, and if you're average, now listen, some are average, some are below average.
• 5:46
  SPEAKER_00: Some, I mean, I sold one in Los Altos this year, a couple months ago, for over 2 million.
• 5:51
  SPEAKER_00: Uh, yeah, Los Altos is not average.
• 5:53
  SPEAKER_00: Los Altos is one of our better neighborhoods.
• 5:56
  SPEAKER_00: It's expensive to own a house there.
• 5:57
  SPEAKER_00: And so, yeah, the fourplex is going to go for a premium, especially this one because it was in great condition.
• 6:02
  SPEAKER_00: So um now we are up last year in 2024, the average fourplex price was 1,193,000.
• 6:12
  SPEAKER_00: Okay, so we're up significantly.
• 6:15
  SPEAKER_00: But one before you get too excited, you know, I want to show you that in 2022 and 2023, roughly more or less, and you'll look at the graph, the average sales price was 1.4 million.
• 6:25
  SPEAKER_00: Okay.
• 6:26
  SPEAKER_00: So again, in 2022, 2023, 2025, we're right around the$1,400,000 range for your typical fourplex.
• 6:35
  SPEAKER_00: And so 2024 was a down year, but like what we've seen.
• 6:39
  SPEAKER_00: So a couple things, folks.
• 6:41
  SPEAKER_00: Okay, if you're an owner, sales are up, that's a plus.
• 6:47
  SPEAKER_00: Average sales price is up, that's a plus.
• 6:49
  SPEAKER_00: That's good.
• 6:50
  SPEAKER_00: You guys are doing good.
• 6:51
  SPEAKER_00: Uh, that's something to celebrate, okay?
• 6:54
  SPEAKER_00: Uh, so those are very, very good things.
• 6:56
  SPEAKER_00: If you're a buyer, what the market is telling you is uh it's activated again.
• 7:03
  SPEAKER_00: Sales are up, other people in your situations are buying.
• 7:06
  SPEAKER_00: Not only are they buying, the prices, the average um price is back up.
• 7:11
  SPEAKER_00: What I've been seeing also, and this is this is kind of goes into well, why are prices up?
• 7:17
  SPEAKER_00: One of the reasons, and this could be it, if you were someone who was trying to buy a single-family home and the single family home market, for the most part, if priced right, those homes are still selling and there's more than one offer.
• 7:30
  SPEAKER_00: It's not crazy with 20 offers, but the market's still strong.
• 7:34
  SPEAKER_00: Okay.
• 7:34
  SPEAKER_00: A lot of these people that wanted to buy a house are getting priced out and they're thinking, geez, I could get a four-unit building, live in one, rent out the others, and that could be my entry level.
• 7:45
  SPEAKER_00: And we are seeing some people, listen, it's not everyone's dream to start off with a rental property for those that are looking into getting a house first, but it's a stepping stone.
• 7:57
  SPEAKER_00: Folks, let me remind you, my stepping stone uh was a condominium and Signal Hill was my first investment.
• 8:04
  SPEAKER_00: And I went through like six different condos that I lived in before I got my first house.
• 8:10
  SPEAKER_00: Because mom and dad, my mom and dad didn't have the money to give me to go buy me a house.
• 8:15
  SPEAKER_00: And for those that have that benefit, and we have we have friends that do, good for you.
• 8:20
  SPEAKER_00: You're lucky, you're fortunate, you should be grateful.
• 8:22
  SPEAKER_00: But a lot of us didn't have that.
• 8:24
  SPEAKER_00: So a lot of us, we have to start from the bottom.
• 8:27
  SPEAKER_00: And that's including myself.
• 8:29
  SPEAKER_00: And so um, sometimes in order to get that dream house, you have you got to go through.
• 8:34
  SPEAKER_00: Well, let me build some equity, let me not waste my money on on leasing and let me just start off with a rental property.
• 8:41
  SPEAKER_00: So that is another reason why why we've seen an uptick in both sales and in price.
• 8:47
  SPEAKER_00: Days on market.
• 8:48
  SPEAKER_00: Um, so I sell a lot of fourplexes.
• 8:51
  SPEAKER_00: In fact, we sell more fourplexes in Long Beach than anything uh, than than anyone else.
• 8:56
  SPEAKER_00: Uh, and part of it's because we're watching the market more than anybody else.
• 9:00
  SPEAKER_00: No one cares about, no one cares about playing in this playground.
• 9:04
  SPEAKER_00: They just don't care.
• 9:05
  SPEAKER_00: They could take it or leave it.
• 9:06
  SPEAKER_00: They either want to sell houses or they want to sell five plus units, which by the way, we sell a lot.
• 9:11
  SPEAKER_00: Currently, we have a 16-unit building, we have an 18-unit building that we're very proud of.
• 9:16
  SPEAKER_00: Uh, we just launched a seven-unit building in Bellflower.
• 9:18
  SPEAKER_00: And so we sell a lot of five plus, but we're not gonna neglect uh our bread and butter, and that's the fourplex market.
• 9:25
  SPEAKER_00: Because again, we believe, listen, the the title of my podcast is Own More Doors, but the original title that we came up with was Four Doors to More Doors.
• 9:36
  SPEAKER_00: Because I realized that the fourplex was kind of like the very first investment that people got comfortable with that people would buy.
• 9:44
  SPEAKER_00: And from that fourplex, they would realize this is not that hard.
• 9:48
  SPEAKER_00: There's a strong rental market, quality tenants.
• 9:51
  SPEAKER_00: I'm able to raise rents, I'm able to cash flow.
• 9:54
  SPEAKER_00: Oh my gosh, I've made money.
• 9:56
  SPEAKER_00: Hey, this thing's not that hard.
• 9:58
  SPEAKER_00: I could do bigger, big, bigger properties now.
• 10:01
  SPEAKER_00: And so again, four doors to more doors was the original long name, but then the name got too long.
• 10:07
  SPEAKER_00: And so we had to um shorten it down to own more doors.
• 10:10
  SPEAKER_00: But I'm a believer of the fourplex market.
• 10:13
  SPEAKER_00: What I teach is what I've done.
• 10:15
  SPEAKER_00: What I teach is the steps that I've followed.
• 10:18
  SPEAKER_00: And I learned this from Mark Milan, and who I've I've interviewed in the past, and that's uh a mentor of mine that taught me a lot of this stuff.
• 10:24
  SPEAKER_00: So I don't take credit for creating any of the things that I'm talking about.
• 10:28
  SPEAKER_00: Days on market.
• 10:29
  SPEAKER_00: If you're an owner, you want to know how long is it gonna take for me to sell my fourplex if I list with you one.
• 10:34
  SPEAKER_00: Now, I would say I could probably sell it faster than the stats, but here you go.
• 10:39
  SPEAKER_00: In 2025, mid-year review, first half of the year, 75 days on the market, up from 37 days last year.
• 10:47
  SPEAKER_00: So where sales are up, average sales prices up, it is taking us longer on the market.
• 10:52
  SPEAKER_00: I've described the last two months as sluggish.
• 10:55
  SPEAKER_00: It's been sluggish.
• 10:57
  SPEAKER_00: Although the numbers are up overall, I would say that it's sluggish.
• 11:01
  SPEAKER_00: And so in 2022, it took 52 days.
• 11:04
  SPEAKER_00: In 2023, it took 60 days, and in 2024, it was 37 days.
• 11:09
  SPEAKER_00: And so at this point, although we have two really awesome metrics, sales are up, average sales price is up, huge.
• 11:17
  SPEAKER_00: We also have a metric that's not so positive.
• 11:20
  SPEAKER_00: It's days on market is gonna be much, much longer.
• 11:23
  SPEAKER_00: I will tell you this also, and I don't have a graph for this.
• 11:26
  SPEAKER_00: Inventory is up.
• 11:27
  SPEAKER_00: And so, why is this important?
• 11:30
  SPEAKER_00: If I'm a buyer and we work with a lot of buyers, here's what I'm gonna tell them.
• 11:33
  SPEAKER_00: So I'm talking to you guys, okay?
• 11:35
  SPEAKER_00: Here you go.
• 11:36
  SPEAKER_00: There's more inventory.
• 11:38
  SPEAKER_00: So you have more buying options.
• 11:40
  SPEAKER_00: Uh, properties are sitting on the market longer.
• 11:42
  SPEAKER_00: That's gonna benefit you.
• 11:43
  SPEAKER_00: If you want to come in and if you're working with a company that specializes in multifamily, that company, whether it's us, I want it to be us, but you may not want to work with us, and that's fine too.
• 11:54
  SPEAKER_00: I'm glad you're still um listening in.
• 11:56
  SPEAKER_00: There's a lot of folks who, by the way, I appreciate you.
• 11:59
  SPEAKER_00: Whether whether you work with us or just listen to us, and you know, you're supporting us one way or the other.
• 12:04
  SPEAKER_00: So I just want to say thank you.
• 12:05
  SPEAKER_00: Thank you to our podcast listeners, and obviously thank you to all of our YouTube subscribers.
• 12:09
  SPEAKER_00: We appreciate you all.
• 12:11
  SPEAKER_00: If I'm a buyer and if I and if I'm uh equipped with this information, while Juan said there's more inventory, that's a plus.
• 12:19
  SPEAKER_00: That means you could compete.
• 12:21
  SPEAKER_00: Um, and they're sitting on the market longer.
• 12:23
  SPEAKER_00: Well, that's a plus.
• 12:24
  SPEAKER_00: You should also be able to compete.
• 12:25
  SPEAKER_00: Now, if if if you're working with someone who knows the stats that we're covering, no one's gonna know them because no one's following them as close as we are, but they could use the stats to help you negotiate.
• 12:36
  SPEAKER_00: They could use the stats to say, hey, this one's been on longer than 75 days.
• 12:41
  SPEAKER_00: What does that tell you?
• 12:42
  SPEAKER_00: There should be, there should be some flexibility in the price.
• 12:48
  SPEAKER_00: Um, now I get it.
• 12:50
  SPEAKER_00: It's a little different.
• 12:51
  SPEAKER_00: With the fourplex market, a lot of the sellers are in a position, and because I hear it and I and I and I believe it to be true, a lot of them will say, well, um if I don't, if I don't get my price, I don't have to sell it.
• 13:03
  SPEAKER_00: And that's a narrative that at the fourplex market, at the triplex, duplex market, we hear all the time.
• 13:08
  SPEAKER_00: If I don't get my price, I'm just gonna keep it.
• 13:09
  SPEAKER_00: And I I understand that.
• 13:10
  SPEAKER_00: I get it.
• 13:11
  SPEAKER_00: You could do that.
• 13:13
  SPEAKER_00: That's not the narrative that I'm hearing in the five plus market, where if they don't get their price, their interest rate is on the verge of uh, you know, it's a ticking time bomb.
• 13:23
  SPEAKER_00: It's gonna go from 3% to 6%.
• 13:25
  SPEAKER_00: And in some cases, they have to come in with um, in some cases, quarter million dollars,$300,000 to make the loan work uh from the commercial lending perspective.
• 13:34
  SPEAKER_00: And so there's other pressures in the five plus market, but let's not, let me not confuse you.
• 13:38
  SPEAKER_00: The four plus market, the the sellers, um, I would tell you that they, if they want to sell, they'll sell.
• 13:45
  SPEAKER_00: If they don't, then they don't have to.
• 13:48
  SPEAKER_00: Their insurance premiums have gone up.
• 13:49
  SPEAKER_00: So the pressure is is it harder for them to own now?
• 13:53
  SPEAKER_00: Yeah, it's harder because the insurance just went up.
• 13:55
  SPEAKER_00: Um, they have to get through the balcony inspection, which a lot of them don't even know that they have to do that.
• 14:01
  SPEAKER_00: Another thing that's coming down in a couple years is the um the soft story.
• 14:07
  SPEAKER_00: Um, meaning that if you have garages underneath the units, uh, chances are that it's been identified.
• 14:13
  SPEAKER_00: And in a few years, the city might, I say might, make you reinforce that.
• 14:17
  SPEAKER_00: I mean, that could be an expensive, a very costly.
• 14:20
  SPEAKER_00: This is like uh engineered to support that in case of an earthquake, um, it they call it a soft story because it's not fully supported because there's a garage underneath it, that that possibly the the units up above would um would be in jeopardy.
• 14:36
  SPEAKER_00: And so, anyhow, there's there's a couple big ticket items that are coming down.
• 14:41
  SPEAKER_00: The balcony inspection uh could be a big ticket item.
• 14:44
  SPEAKER_00: In some cases, it's just a big ticket item uh on the inspection part, you know.
• 14:50
  SPEAKER_00: So someone's gonna make money on just doing an inspection.
• 14:52
  SPEAKER_00: Not and not in every situation is it gonna need work, but there's a couple things coming down where um it could get a little more expensive.
• 15:00
  SPEAKER_00: And so that might squeeze the fourplex owner.
• 15:02
  SPEAKER_00: But all in all, the fourplex owner mindset is uh if I don't get my price and if I'm not that motivated, I don't have to sell.
• 15:09
  SPEAKER_00: And so, and so the market's unique in that way.
• 15:12
  SPEAKER_00: And so I hope you guys took away something with uh today's podcast.
• 15:17
  SPEAKER_00: If you're watching me on YouTube, make sure to like, comment, and subscribe.
• 15:21
  SPEAKER_00: For some of you, for some of you who are in the LA area, now I've had people come in from Santa Clarita, I've had people come in from San Diego who've listened to our podcast who appreciate it.
• 15:31
  SPEAKER_00: We do monthly meetups.
• 15:33
  SPEAKER_00: So I'm gonna recommend this Saturday, July 26th at 10 a.m., we're doing a very beginner-friendly meetup where we're gonna um have a lender here, Phoebe Tutoroff, our in-house lender, is gonna be here.
• 15:47
  SPEAKER_00: And and then also we're gonna be having the um um Teresa Cornwell, and we're gonna be talking about buying your first triplex, duplex, fourplex.
• 15:56
  SPEAKER_00: And so this would be a great time to come by.
• 15:58
  SPEAKER_00: If you can't make it in July, not to worry.
• 16:00
  SPEAKER_00: We're gonna be hosting them through the end of the year.
• 16:02
  SPEAKER_00: And so just go on to our website, SageRagroup.com forward slash meetup, RSVP, for our next meetup.
• 16:10
  SPEAKER_00: We have great guests, great turnout.
• 16:12
  SPEAKER_00: It's free.
• 16:13
  SPEAKER_00: Come network, come learn.
• 16:15
  SPEAKER_00: We're not gonna pitch you anything, we're not gonna sell you anything, but I hope that you learned that you leave a little motivated with and equipped with a little more information.
• 16:24
  SPEAKER_00: So there you have it.
• 16:25
  SPEAKER_00: Thanks for tuning in.
• 16:26
  SPEAKER_00: Until next time.