Real Estate Market Timing: Why Smart Investors Buy When Everyone Else Freezes

Dave Irwin (00:00)
Right now, so speaking to your younger investors, perhaps, my advice to them would be to buy a duplex. Live in one side, rent the other. Half of your rent payments covered. It’s a great start. When you get enough money or go up, you can move out. Now you got a duplex, then you get a single family and go from there. And VA loans, there’s no money down on VA loans. FHA works that way, just got to be on rock.

Cody Crabb (00:20)
deal.

Welcome back to the Real Estate Pros podcast by Investor Fuel. I’m your host, Cody Crabb. Today I’ve got Dave Irwin with me. Dave is based in Southwest Florida and he’s been in real estate for decades. He’s been an investor, advisor, former appraiser, and someone who’s seen the market through the boom years, through the crashes and back to the boom years again. So we’re going to talk about market timing, the lessons he’s learned the hard way and what newer investors should understand before they start making their big moves. Dave, thanks so much for hopping on today. It’s a pleasure.

Dave Irwin (02:27)
Thanks for having me. Glad to be here.

Cody Crabb (02:29)
Yeah, yeah, no problem. ⁓ So to start out, we were chatting a little bit about this in the the pre interview, but I’d love for you to give our audience a little background on how you got to where you are today. mean, you mentioned decades in real estate, ⁓ but it’s not just in one role. Is that right?

Dave Irwin (02:47)
That is correct. kind of started out as bought my first house at 20 years old, never rented and kind of started on from there, started buying some two families, four families while my friends were out buying big new fancy cars. I kind of felt bad, but that’s what you do. And then became an appraiser and then I my own business and moved to Florida in 02. And that’s when things really got crazy.

Moved to the best time possible in Florida, in 2002, by 2005, I think we sold 660 houses. I had accumulated a real estate portfolio of 11, 12 million, something like that. I put it all into, here’s the downside. I saw the market crash in middle of 2005.

But I didn’t sell because we had the largest investment club in LA. We sold 660 homes in one year, number nine in the country of Keller Williams and Wall Street Journal for amount of transactions. But the market collapsed. It wasn’t enough to sell it. So they moved me to Biloxi. I did a little bit, same thing up there, built up there. Came back from there. I think we built 75 homes after Katrina.

And then I kind of followed the market is what I do a little bit. So you couldn’t sell anything. So we started buying at the courthouse store. The ones we were selling for 220, we were buying for 65,000, putting 20K in them and selling for 85,000 for three, four, five years. And then the market just slowly got better. So we’ve been doing the investing thing for a long time.

Cody Crabb (04:22)
Yeah, no kid. Well, and you mentioned, I I mentioned at least three roles in the intro and you’ve mentioned at least a couple more than that to me. ⁓ Some people I talked to are like, no, you should never, you should never do that. You know, sometimes the market’s good, sometimes it’s bad, but like sometimes you just need to dig in and like you need to think of alternatives, certainly like within your lane, but also like you can’t go too far out. It’s and they call that shiny object syndrome. You’re chasing the newest shiny thing. So I’d be curious to

know like what you do not see it that way and I’d love to hear why.

Dave Irwin (05:42)
I would see the opposite of that. So just to say that I saw the market peak. We were a 45 % appreciation of Haas market in the country, Cape Coral in this area. So I took advantage of that. But when it started to turn, ⁓ it started to turn. So you can’t continue to do the same thing. So I started to move to duplexes and building duplexes and buying.

property at the courthouse door, that was the way to go. And you work with your same investors. These are all the people, I had probably six investors doing three or four a month, flipping and I was doing the same. But yeah, and then the next thing was new construction in Southwest Florida. So lots became hot. So now I got over 90 lots for sale. I own many waterfront lots and duplexes that we Airbnb.

And so it is a whole circle. kind of, whatever’s hot, you kind of do with that. And Airbnb is one of those hot ones.

Cody Crabb (06:42)
Yeah, yeah. Well, and I think something that I think that no one really talks about in this kind of area is, you you’ve heard of the expression, Jack of all trades, master of none, I’m sure. ⁓ But what maybe you haven’t heard is the full expression, ⁓ which I did not know that was until recently, that was not the whole expression. The whole expression is Jack of all trades, master of none, better than a master of one.

Dave Irwin (07:10)
There you go.

Cody Crabb (07:11)
Which I think I think that rings a lot more it’s complete it changes the meaning completely and I totally agree with it I think Because with with real estate it is you know, I think you’d agree is a pretty generally stable ⁓ Kind of field an area to invest in however, the crashes crash hard when they crash and so And when it goes way way up sometimes it goes way way down and so

Dave Irwin (07:34)
up must come down.

are in a down right now. So now’s a buyer’s market as they call it.

Cody Crabb (07:44)
Yeah, yeah, yeah. And I’ll ask you about that in just a second. ⁓ Something else ⁓ that I’d love to ask you about is, I often hear things like, the interest rates are so high. ⁓ So how could it possibly be a buyer’s market? What would your response to that be?

Dave Irwin (08:05)
Oh yeah, you gotta go with the numbers work. It’s all about the numbers. it’s projected income. Everybody should do their own projected income and expense sheet for everything before they buy it. And that’s why new construction, I have those sheets for like a duplex, how much income it’ll be in. If you did annual, if you did Airbnb and what the cost to build and all that and carry. And so that’s all that comes down to doing your right homework, I think, more than anything.

Cody Crabb (08:32)
Yeah, something I always talk to talk to people on this podcast about is like, really, I mean, we overcomplicate this, but it just comes down to math at the end of the day. Like, if did the numbers work? Yes, then OK, sounds like a good deal if they if it’s complicated, maybe look a little closer. I just I really doesn’t have to be that complicated. Well,

Dave Irwin (08:53)
Right now, so speaking to your younger investors, perhaps, my advice to them would be to buy a duplex. Live in one side, rent the other. Half of your rent payments covered. It’s a great start. When you get enough money or go up, you can move out. Now you got a duplex, then you get a single family and go from there. And VA loans, there’s no money down on VA loans. FHA works that way, just got to be on rock.

Cody Crabb (09:13)
deal.

That’s great. Yeah. think that the old house hack as they call it. Yeah. I think a lot of people, ⁓ a lot of people gravitate toward that for their first, for their first deal, just because it’s a way that you can start from basically not nothing, but basically nothing in investing, investing terms, ⁓ so

Dave Irwin (09:37)
To go

back to interest rates, though, I didn’t answer your question good on that, though. I I grew up in a 7 % interest rate age. And of course, we got down to all the way down to three. And now we’re up where we are. And that’s what’s caused our market to slow. It was the higher interest rates, which is gradually coming down. But you just got to go. You can’t wait. Because now is the time to buy. It’s raised a little high. Guess what? You refinance four and a half years down the road or whatever.

Well, I bought my farm. I remember buying a farm in the 70s or 80s. was 17 % interest rate and then it went to 12 refinance at the 12 then refinance to seven. You know, you just got to do what you did.

Cody Crabb (10:53)
Yeah. I’d love to also talk about ⁓ something that I’d love to get into with you ⁓ is ⁓ some of the struggles. mean, someone with your amount of experience, ⁓ people kind of look at people with this level of success or experience. They’re like they’re basically like mythical figures almost like they they’re like they can do no wrong. They’ve never messed up anything. ⁓ But I think we do ourselves a disservice sometimes by not getting into that a little bit.

So I’d love to hear a little bit about maybe a mistake you made or ⁓ an error in judgment or something and kind of what you learned from that. Because I think we tend to learn more from that stuff than any of our successes really.

Dave Irwin (11:35)
Well, there’s a big one. got a big one of those. So I moved down in Florida in 2002 and caught the market and as I mentioned, sold a lot of property, got the largest investment club in LA and the doctor of economics. He’s actually an economist. He taught us buy and hold, buy and hold, buy and hold. That’s what it was. And my mistake, I did do that. I bought, I had 14 single families. had four

20 acre commercial. We bought that thing for 4 million and a letter of intent for 21 million Zoning like they couldn’t write the zoning the markets going down. They’re writing the zoning to meet it We lost that property lost probably 9 million and profit

Cody Crabb (12:20)
And you know, and I think that’s a great lesson in you made the horrible mistake of following experts advice, right? Like that’s

Dave Irwin (12:28)
buy and hold if

I would have sold some and then held some, you would have had because the rents went from 1200 a month to 750. So if you got that 7 % interest rate, guess what? Now you’re losing money every month times 13 I had. So it was a tough time.

Cody Crabb (12:47)
Well, I mean and I think that does that’s not to say that like don’t listen to the experts, but I think that’s a good lesson in Sometimes you just can’t predict the market like it just doesn’t you know that it’s sometimes it just doesn’t work that way and ⁓ I’d love to hear you know you you’ve because you’ve hopped around so much How do you predict that market like where where do you see? Yeah, you’re looking way off in the distance and you’re seeing stuff I’d love to hear kind of the things that you see that make you start to react well

Dave Irwin (13:12)
If we

go in today, right now, new construction is hot. New construction, they’ve overbuilt, they continue to overbuild. You can buy a $200,000 brand new condo on a golf course right here in Southwest Florida. And we can buy brand new homes for 300,000 and that’s cheap for down here. ⁓ So new construction is the way to go now because why? Insurance, number one.

That’s the problem with Florida, why we’re in a buyer’s market. My insurance has doubled because of all the losses they have. But if you buy new, like I just built this brand new duplex where Airbnb in, 1,200 a year is all we’re paying there. Now I’m living in the house that I bought in 02 for 242, it’s worth say 650, but.

Cody Crabb (13:47)
Yeah.

Dave Irwin (14:01)
My insurance just went from $1,800 to $4,000 a year. So that’s a big deal, you So you got to watch what you buy in Florida too, because you want something built with the best hurricane codes. 2002 or after is when we took on the Miami hurricane.

Cody Crabb (14:17)
Yeah, I’d love to hear a little bit about that too, because I think ⁓ one thing that I like talking about with our different ⁓ our different viewer or different guests and to our different viewers. mean, we have got we have listeners across the country. And I think every single place that you everywhere you you go, you’re going to have a local quirk of I can’t remember where it was that we were talking about. But I just interviewed someone that was like, the the something something.

something fly that you got to be aware of the flight those particular flies and you got to build it with this and you got to but if you’re investing out of state you have just no way to possibly know that ⁓ so I’d love to hear like you know obviously the hurricane stuff is is important there locally but I’d love to hear are there are other local quirks where you are I mean I know Florida’s got a lot in particular

Dave Irwin (15:03)
Well, you got to watch HOA fees. You know, want to be on a nice golf course, you’re going to pay, you know, some people don’t, you know, don’t even want anything to do with HOA fees. ⁓ New construction, like I said, is really good. Now, find a good builder is the downside. It’s tough to find a good builder. They all take on too much. ⁓

Cody Crabb (15:22)
So how do you mean? When you say that, I’d be curious. What’s been your experience?

Dave Irwin (16:06)
I went through two builders to get the one to finish the place. even finish? Just to finish. The first one never even got started good. The second one did a terrible job and just took money and they had taken on too much business and didn’t know how to manage it basically. Sure, yeah. That’s a big thing to watch out for.

Cody Crabb (16:28)
Well, like you said, mean, in a hot market, that certainly is like, you know, they’re in demand. So. Yeah.

Dave Irwin (16:34)
Yes,

well, you you go back four years, you could, like I said, you could buy a hundred thousand dollar waterfront lot, put a three hundred thousand dollar house on it. It’d be worth five ninety nine when you’re done. But if you took two or three, four years, you might be losing the whole market as you’re doing that. So you got to get a builder that’s going to do it within a year or under a year and, ⁓ you know, certain things like that, I guess.

Cody Crabb (16:57)
Yeah, yeah, that’s that’s good. Yeah, because not everything is like hurricanes and alligators and stuff like some. Yeah, sometimes it’s just like local quirks, like local laws and stuff. mean, obviously you have states like California that have tons of regulations you need to be aware of and stuff like that. ⁓

Dave Irwin (17:13)
Well, it’s all about the weather here. It’s about the weather and the water.

Cody Crabb (17:16)
I’ve heard it’s the it’s the basements the guy are not not the basements because there are There are I gonna say there are no basements. Yeah But it’s that’s what I mean. Like it’s we actually

Dave Irwin (17:26)
We

to build our houses up. the first… So you might pay 20… So when you build a new house, a building permits 20,000. Oh, I might have to put 25,000 in dirt to bring in to put my slab on. If you want to sit up high enough, know, FEMA changes those. But we also have low taxes, no income tax. So that’s what drives a lot of people here. But really, you want to be on water. There’s lakes everywhere. They build lakes to…

Cody Crabb (17:28)
It’s the opposite of a basement.

Dave Irwin (17:53)
get the dirt out to build the houses on. So there’s a lot of waterfront property affordable, you know. So that’s a good thing. So now I would say new construction and I went, maybe we got another year of, you know, new construction. Like there’s a single family home. just opened up an email before we started talking 350 brand new home on a lake, you know, in Punta Gorda, Florida, you know.

Cody Crabb (17:58)
that.

Yeah, for sure. Wow. Yeah, I see some of these reality shows ⁓ like that, you know, there I want to say one’s called My Mom Loves Him. That’s I’ve kind of seen him in passing the buying the beach, I think is one is called where yeah, yeah, right on there, like literally in the water. Like, I mean, that’s believable. ⁓

Dave Irwin (18:33)
I forgot to tell

you that I was on a beachfront waterfront here in one of my listies.

Cody Crabb (18:40)
I mean, I can’t imagine the logistics. Like there’s probably a whole lot you have to think about there, but.

Dave Irwin (18:46)
Oh man, they shot us four hours and I think I got 45 seconds in the beach waterfront thing. But it was fun.

Cody Crabb (18:56)
Yeah, no kidding. Wow, that’s cool. ⁓ Well, this has been really great. mean, thank you so much for all the time you’ve given us. Just a couple more questions before we kind of head out. ⁓ You know, I’d love to hear, let’s say you’re at a conference or something.

for like newer investors, right? And you’re gonna, they’re gonna hand you the mic for a second and they just, they want you to give the best advice that you could possibly give to newer investors. You got just like one thought, like you don’t know time to pair anything. I’d love to hear what would your initial thought be?

Dave Irwin (19:33)
I think right now, as an initial investor, I would be looking at new property in Southwest Florida. I know about the rest of the country. would think new property, duplexes are mighty good too. Airbnb and duplexes is what I’m doing. I bought some waterfront lots and doing that, I would recommend doing that. Lots, you wanna, hey, start slow, you can buy a $15,000 lot down here and it’s gonna get.

increase in value as you know.

Cody Crabb (20:00)
They’re

really low. Yeah, no.

Dave Irwin (20:03)
But you want to start with some income and I kind of like those duplexes, you know, where you can go in and use an FHA loan, three and half percent down, VA loan, live in one side or a small conventional or maybe a five percent down conventional loan. You live in one side, you rent the other. You’re paying half of it. They’re paying most of your mortgage payment, this rent side, and you’re living there for a lot. And then later on, you’ll go out and get a new house or whatever and you’ll have a duplex too.

Take that payment. So you got to do one step at a time without overextending yourself. And ⁓ there’s lots of financing out there, creative financing. That’s really not a problem, especially with real estate. It’s all secured. I guess that would be the way I’d start, I guess.

Cody Crabb (20:49)
Yeah. Yeah. think, I think, ⁓ I think that hearing you say that, mean, something that sticks out to me is that you say you started out with right now, like there is no finite single answer to that because it’s going to change. And, know, I think that’s people that can pivot quickly. ⁓ I think you have an advantage certainly in, this industry, but also people that are

kind of can kind of think quick on their feet. mean, something that we didn’t even talk about was, you know, the jack of all trades thing really comes in handy when you need to pivot. I mean, if you already have experience in a bunch of other areas, if something really is not working with what you’re doing, you’ve got all this other experience you can pull on to maybe do something that will actually work. So I think that’s that’s an underrated strategy, which is kind of have some have some backups around the same

in the same field or so, because things like there’s always going to be people are always going to need mortgages, even if there’s not as many people are. So there’s things like that where I think it seems like it’s served me very well.

Dave Irwin (21:57)
And I would say the same thing to our audience. Look within yourself. If you’re handy or you’re a painter, you can do a lot of this or you can do a fix and flip. That might be what you want. ⁓ But there’s a lot of different ways to it. Airbnb is probably a real nice way. Evolve, I use Evolve for the management of the rental. That helps. ⁓

There’s a lot of good ways to start slowly and I think everybody should start slowly.

Cody Crabb (22:27)
Yeah, that’s it. But at the same time, mean, at what point are you just kind of stalling? Like, what would you say to those people?

Dave Irwin (22:34)
Well,

I’d say right now, because there’s so much inventory in our market and new constructions, prices are low. Rents are low too, because we’ve overbuilt. We will be reading about that for the next few years about everywhere you go, they’re building a new apartment complex. And that’s driving.

Cody Crabb (22:50)
I

feel like we’re not even, I feel like we weren’t even that short to begin with and I feel like that’s happening, yeah.

Dave Irwin (22:56)
So that’s driving rents down. so, guess what? They’ll come back up, you know, but ⁓ that’s something to keep in. You just got to look at the whole market as it is now, and then, then fit it to you. Okay, I could do this. I got this. I know somebody or my builder buddies over here. That’s what I got. I got a few builder buddies, you know, now.

Cody Crabb (23:17)
Well, and maybe you’re not even that handy, but maybe you’re really good at. don’t do any. Yeah, I was going to say maybe maybe you’re not even that handy, but maybe you’re good at like talking to you’re good at the schmoozing the the people with money. I mean, maybe that’s your role. So there’s lots of ways to kind of get into the this arena without even having a lot of cash on hand or.

Dave Irwin (23:35)
Conventional and unconventional ways. For sure. There’s a lot of people that do the construction of perm loan. You buy the lot at $15,000 a lot, say. And then that becomes your down payment when you build a house on it. So the lots were 25 three years later. Now you have 25 down on your thing. So build a house without putting any money down then.

Cody Crabb (23:57)
Yeah, it kind of sounds like it kind of sounds like being creative is a huge advantage. Yeah.

Dave Irwin (24:02)
So part of it. Financing

is a big thing. Yes, insurance is a big thing.

Cody Crabb (24:08)
Well, ⁓ thank you so much for all the time you’ve given us today. I think this has been really useful for our audience. If people wanna kinda get in touch with you or ask you questions or something, how could people find you online if they wanna follow you or learn more about what you do?

Dave Irwin (24:21)
Yeah, I’ve got a website that I haven’t updated in a while, but it’s www.swflinvest.com. You’re welcome to go there. Those are duplexes I just built myself. Or you can contact me 239-405-2537. I always answer my phone.

Cody Crabb (24:33)
Yes.

I love a good phone number. got it. That’s like it’s super old school. You’re just like, yeah, I hear it every time. It’s awesome.

Dave Irwin (24:48)
I can’t believe

yet. I called four realtors. You’re the only one that answered your phone.

Cody Crabb (24:54)
Yeah, I’m a millennial. I’m a millennial. So we’re kind of allergic to phone calls a little bit. We do the kind of the whole messaging thing, but that’s that’s pretty cool that like you’re that available. Well, again, thank you so much for sharing your experience with us. I think this has been really great. ⁓ And yeah, we’re we’re lucky to have you. Thank you so much for your time today. Thank you. And thank you, listeners, as well. If you got something out of today’s episode, go ahead and give us a like, subscribe, comment, all those things.

Dave Irwin (25:13)
I appreciate it.

Cody Crabb (25:21)
And don’t forget to review us on Apple podcasts so we can help more people get into their real estate journey. David, thanks once more. It’s been a real pleasure to talk to you today.

Dave Irwin (25:32)
Thank you sir, thank you Cody.