Hot Trends in Demographics and Single Family Rentals

Whether you invest on Wall Street or Main Street, we know you want to know which way the cashflow is going. (We’ve never met an investor who DIDN’T make an effort to take note of current trends in the marketplace.)

In this episode of The Real Estate Guys™, we invited multi-market investor Aaron Adams to give us his insight into the hottest trends in today’s market.

Aaron is an active investor AND property manager in multiple single-family markets across the nation. His broad experience and expertise allow him to operate at a high level … and we like that he’s still down to earth.

Listen in to the show today to hear from:

  • Your keeping-up-with-the-trends host, Robert Helms
  • His trying-to-keep-up co-host, Russell Gray
  • Single-family home expert, Aaron Adams



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From high school teacher to millionaire

In the early 2000s, Aaron Adams was a high-school history teacher making $40,000 a year. One night, watching an infomercial, he had a realization … he could make good money just by buying and selling houses.

He knew real estate was complex. So being an academic, he checked out every real estate investing book in the library.

The first book that really lit his passion for real estate was Robert Kiyosaki’s Rich Dad, Poor Dad. “I lost sleep from that book,” remembers Aaron.

From that point on, Aaron was absorbed in soaking up as much new knowledge as he could. It wasn’t long before he took action, buying his first house and flipping it for a $50,000 profit.

Those first earnings were empowering, especially when Aaron realized he could make more from flipping one house than he did in a year at his teaching job. Over the next four years, Aaron flipped about 60 more properties. He also continued his real estate education, eventually getting his broker’s license.

These days, Aaron’s no longer teaching. Instead, he manages properties all over the nation. We asked him how he made the jump from flipping to property management.

He told us his interest in property management stemmed from an interest in reinvesting. By that point, he’d made over a million dollars.

Aaron used a four-point criteria to examine potential markets, eventually landing on Indianapolis, Indiana. With a couple of partners, he started Alpine Property Management, eventually expanding to Dallas, Kansas City, Las Vegas, Charlotte, and locations in California.

Most property managers stick to one location, but Aaron’s specialized market knowledge guided his strategic decisions about where to invest in properties.

Aaron told us his unique business model stems from a desire to control the deals he makes and the outcomes he gets.

Aaron controls the whole process … from construction and renovation, to property management and upkeep. This allows Aaron to ensure the viability of his assets … for himself AND his investors.

“Outsourcing creates a volatility point,” says Aaron. Although running a business this way is harder and takes more time, it also offers Aaron more control. “I can really guarantee the numbers,” notes Aaron.

Big-picture trends

In today’s market, almost anyone can make money flipping houses. But there’s a lot of uncertainty when we consider what’s going to happen to our investments in the long run.

We asked Aaron about his mindset in today’s flush (and volatile) market.

Aaron noted that if you’re investing for rental income, rents actually go up in a downturn. They’re not tied to your property value.

His take on things? One of the best hedges for market fluctuations is rental income.

So how do you figure out which markets will get you the best rental incomes? Aaron told us the two main things he looks for … PEOPLE and JOBS.

More specifically, he looks for a high rate of population growth and a low rate of unemployment.

We also asked Aaron for his insight on general macro trends in the market right now. He noted that while the stock market is going up, home ownership has been decreasing … and that’s never happened before.

What does this mean for YOU? For one thing, “There’s never been a better time to be a landlord,” as Aaron puts it.

More people are renting than ever before, whether they’re millennials with high student debt or aging baby boomers who were hit hard by the recession.

Aaron sees unprecedented interest by Wall Street in the real estate investing game over the past several years. More and more, Wall Street investors agree that real estate is a great place to park their money.

Aaron himself partnered with a fund, providing his know-how in operations management in exchange for funding. That partnership has provided a source of liquidity for his clients.

Another big trend Aaron’s noticed is the undersupply of new construction.

There’s a predictable number of new houses that need to be built every year to sustain the U.S. population: about 1.7 million. Over the last four years, as a nation we’ve underbuilt by almost 4 million properties.

Aaron sees incredible opportunity in those numbers. “There’s never been a better time to build in blue-collar working-class neighborhoods,” he says.

Those entry-level homes are the kind of properties that sell well to investors. And if you think about it, property is ALWAYS going to be in demand … everyone needs a place to sleep at night.

Blue-collar neighborhoods provide an additional advantage … the working class tenants in these neighborhoods rarely find themselves in a position to buy homes, provide a stable stream of great tenants.

Aaron’s figured out how to turn this to his advantage AND provide blue-collar workers the opportunity to buy their first home. His program converts rentals to seller-financed loans. Investors go from landlords to bankers … and lock in appreciation with tenants they already know and trust.

Aaron’s factors for success in local markets

We asked Aaron how the macro trends affect the markets he invests in. He gave us a lot of insight.

First and foremost, Aaron never stays complacent. He’s always exploring new opportunities. “When we sell, we say, ‘What’s next?’” says Aaron.

Aaron gave us a rundown of some of the most compelling reasons he invests where he does.

For example, Charlotte, North Carolina, is the largest banking center in the U.S. besides Manhattan. It is the number one population growth city in the country, and has a diversified population and workforce. And the city is very proactive about revitalization and public transport.

Indianapolis hits similar (excellent) metrics. Healthcare is huge. There are three universities, contributing about 100,000 students. Unemployment is low. The city is business friendly, with low LLC and permitting costs and eviction allowances.

In addition, Indy’s home to the largest sporting event in the world. The rise in non-traditional vacation lodging, like Airbnb, allows real estate investors to essentially “cannibalize” hotels. In one month, Aaron told us he reaped $50,000 from just 10 properties he uses for temporary lodging.

Aaron owns over 2,500 single-family residences. He’s able to pluck up properties in places like Charlotte and Indianapolis because he can look at the big picture.

“People think you’re a victim to the market when you buy a rental property,” Aaron told us, but in his experience, that’s not true.

At this point in his career, Aaron’s able to hit a pretty predictable 5-10% appreciation rate. He controls his vacancy rate by controlling rents, keeping it in the 5-7% zone. If your vacancy rate is lower than that, you’re probably not getting enough rent, he says.

Want to get more insight about the biggest nationwide trends? Aaron’s prepared an extensive report for you that also includes information about his exclusive educational opportunities. Listen in to find out how YOU can get access to a complimentary copy!

Keeping up with his studies

Aaron’s a great example of the power of the purple book, as we like to say. (Shout out to Robert Kiyosaki for getting so many folks started in the real estate investing game!)

He’s also a great example of the generosity of entrepreneurs.

It can be hard to see the big picture, but as a former teacher, Aaron is always studying. We’re really impressed at his ability to see the view from 35,000 feet and then bring that data down to earth.

To see the big picture AND manage the tiny details? Now that’s a good businessperson.

 More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

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