Tailwind Talks
Tailwind Talks is a podcast for high-performing professionals who want to build serious real estate portfolios without leaving their careers. Hosted by an airline and military pilot turned investor, it dives into actionable strategies for scaling your real estate portfolio while balancing the demands of a full-time job.
Tailwind Talks
How Im Investing In Real Estate Right Now (Despite High Prices)
Ever feel like you've done everything right in your career but still can't afford the home you want? You're not alone. As a commercial airline pilot, military instructor, and real estate investor, even I'm feeling the squeeze of today's housing market—so much that I'm currently renting an apartment while owning multiple rental properties.
My response? A contrarian investment strategy focused on properties many investors overlook. I'm targeting homes in Milwaukee's $100,000 range (plus or minus $20,000) that offer immediate cash flow while positioned for substantial appreciation. These aren't Instagram-worthy properties, but they might be the smartest plays in today's market.
The thesis behind this approach is what I call the "waterfall effect." As buyers get priced out at the top of the market due to inflation, interest rates (currently at 7.5%), and skyrocketing property taxes (mine increased 30% last year), they're forced to look at the next tier down. This creates a domino effect through every market segment, eventually driving up demand in previously overlooked neighborhoods. I've already seen this play out in Milwaukee's south side, where similar properties have experienced explosive growth.
My recent purchases—a $68,000 single-family home and a $112,000 duplex—exemplify this strategy. While not exciting, these properties cash flow nicely while offering potential 50-100% appreciation as market pressures intensify. The kicker? You couldn't rebuild these homes for anywhere near their purchase price today, suggesting they're fundamentally undervalued.
What makes this approach powerful is its built-in safety net. If my appreciation thesis proves wrong, I'm still generating positive cash flow and building equity through debt paydown. But if I'm right, these "boring" investments could deliver extraordinary returns as middle-class buyers increasingly find themselves with no other options.
Are you seeing similar market pressures where you live? Join the conversation and share your experiences—I'd love to hear how you're adapting your investment strategy for 2025 and beyond.
What's up everybody. My name is Cole. I'm a part-time real estate investor, a full-time legacy airline pilot and a part-time military instructor pilot. Today I'm talking about my investment strategy for 2025 and beyond. I just did a video about how expensive things are and why I rent this apartment here. I don't actually own my own home, even though I have a bunch of rental properties, so today I'm gonna talk about what am I actually looking at? I'm going to get right to it.
Speaker 0:If you look at my market, milwaukee, there's a lot of places that I would never touch because it's just too nice. There's a balance of like good quality, good school districts, all these things that make up the value of a property, and if it's too far on the high end, then it doesn't make sense as a rental. It's the same reason that you don't see people renting out too many houses in Beverly Hills and things like this. A lot of these are owned by individuals, because trying to rent them out, the economics just doesn't really work out. When you add in the taxes and the cost of the property itself, it just doesn't make sense. And so, in the same vein, in a small market like Milwaukee, you can look at the very high end, best properties, best houses and then you can juxtapose those with some of the worst properties in the city and there's a happy middle ground. So there's a lot of things that make up what that would look like, but to me I'm looking at places that are still decent enough, areas that I'm not going to have to deal with too much craziness. But I'm also getting the benefit of cheaper purchase prices.
Speaker 0:And the reason I'm going that direction is because right now there's a lot of houses in Milwaukee that are in the $100,000 range, plus or minus, let's say, $20,000. And I saw a couple of years ago the same effect on the south side of Milwaukee, where there's properties that were in that same price range, and now they've just completely exploded. And I think the reason for that is people are getting priced out at the very top end of the market, right, and those buyers are getting pushed down to the next tier, lower, and those buyers are getting pushed down and it just trickles down, right, because inflation, we've got interest rates, we've got taxes, property taxes in Milwaukee have gone up a ton. Last year I got nailed with like probably an average of 30% increase in my property taxes. So when you add in all these layers just for the residential buyers. It pushes people down to the next tier and I think that eventually that makes its way all the way to the middle of the market, or maybe the lower middle of the market, and will eventually rise those prices because the properties may still be the same as far as their condition and build quality. It just is a difference of where they're located at and historically what has the price has been in that area.
Speaker 0:So when I'm looking at that, I'm seeing properties that are pretty decent in the $100,000 range and I'm thinking to myself how long could these possibly stay at $100,000 compared to whatever? Everything else in the market has gone up In some of these cases. In Milwaukee, I think, we've had a year over year increase in the 17% range just in one year and if you look a couple of years back it's gone up a ton and some of these locations have had a huge lag where they haven't really had a lot of growth. They've maybe gone up maybe 5%, 10% in the last decade, but they really haven't exploded in value and I think that eventually buyers are going to end up looking for those properties because they simply just can't afford to buy anywhere else, and that's sad, but that's just the way it is. I'm not making the market, I'm just observing the market and implementing my strategy based on what I see. And so in the last maybe six months, I bought a bunch of properties that are in that price range. It's not sexy, it's not cool, it's not something that's Instagram worthy. Nobody cares. But I think long term it's really going to matter and it's really going to make a difference. So for me, that's what I'm looking at and that's what I'm excited for.
Speaker 0:As the time goes on, I think that these properties are going to appreciate and honestly, when you look at it, from the just straight cash on cash return relative to their purchase price, and for me that makes perfect sense and I have the benefit of that making sense for the cash on cash return, which I say is what I preach all the time, because that's the only thing that really matters. But in the back of my mind, I've got this thought that I think this is going to go well in the next five, 10 years, and it may not, but if it doesn't go well, I still have the cash on cash return that's holding me afloat and I can keep these properties till I pay down the debt and move on and sell them for what I bought them for, basically. But if my thesis proves correct, I think these properties are going to go up, and they could go up, in my opinion, maybe 50 to 100% in value in just a couple of years, and that's simply just because of the fact of people water falling down to the next tier because they're getting priced out. I look at myself. I'm not being able to buy what I want to buy and I'm flying for a legacy airline. I'm still flying for the military. I've got all these rentals like I really should be able to get mostly what I want, right? I'm not trying to ball out of control in some Miami penthouse, but I should be able to get what I want, based on just the career progression that I've had and at least in my mind that's how it's felt but that hasn't played true at all, and I'm sure there's a lot of people that can empathize with that and say yeah, when I got to this point in my career, I thought that I was like I made it, and maybe that's just a byproduct of like never really making it. There's no such thing as making it. It's a continuous process forever, and that could be part of it.
Speaker 0:But I think there is a big group of people in the United States, maybe like in the middle class specifically that are feeling the pressure of yeah, I did all the things in in my career that I thought I would need to do to get myself to that next level, but now I'm here and I'm still in the same spot and there's. I'm not saying that my life hasn't improved in any way. It certainly has, and I've done a lot of things that I'm really grateful for and a lot of people couldn't have done. But for some reason it feels like, yeah, I don't think that this is really gone, at least from the housing perspective, the way that I expected it might. I'm still renting like literally in an apartment right now, talking. So when I look at that, I say okay, if I'm getting priced out, then I know other people are getting priced out. I can't be the only one. I look at what I'm making for the job that I'm doing day in and day out, and I'm comparing that to the average income earnings for the state of Wisconsin and for the country at large and I just don't see how it goes any other way.
Speaker 0:If people want to be homeowners so badly, then they're going to have to move their expectations lower and aim their sights lower to meet their income, especially with 7.5% interest. And if this continues to go up, we have the tariff wars that are affecting bond yields and those bond yields are affecting interest rates and the long term. I look at that and I say, okay, if that's what's going on, if the trend is that these could continue to go up and maybe have the opposite effect of what people were hoping for these next couple of years, then this is really going to play out because no one's going to. They're going to have no other choice. You're not going to qualify for anything else, which is saying a lot, because in the United States you could be basically just alive and qualify for basically whatever you want. That's a whole nother topic.
Speaker 0:Talking about a deal that I just bought, one was a $68,000 single family house, 700 square feet, and the other one was a duplex that was $112,000. Like, not sexy at all, not some big 150 unit multifamily building or anything like this is boring stuff that would put most people to sleep and maybe has put you to sleep too, but this is what I think it takes. Right now I'm staying away from all the flashy, exciting stuff because I just don't have the bankroll for that. I'm not balling out of control, but I can manage a $68,000 purchase or $112,000 purchase and do multiple of those and I think in the longterm, how long does that house stay at $68,000? Is it really feasible for it to stay like that? That's pretty cheap. You couldn't rebuild that house for 68 grand these days. You can barely build a garage for grand these days.
Speaker 0:So when I'm looking at this stuff I'm just like okay, how long does this stay where it's at? And I don't think it's going to be very long. So I'm doubling down on that thesis. I could be wrong but, like I said, worst case scenario, if I'm wrong, I'm still cash flowing, I'm still paying down debt, I'm still getting the equity and the appreciation at large. So I don't really care that much. But that's just my back. That's just something that I've been thinking about and strategizing and pondering about for the future.
Speaker 0:Let me know in your market what you're seeing Like. This is just me speaking from Milwaukee, my market, what I know pretty well, but I don't know everybody else's market. There could be some markets that are feeling completely different and maybe your money does stretch really far, but for me I'm not feeling it, and I know a lot of people that are my age and in similar career progressions as me are also feeling that squeeze. So I don't think I'm alone in that, but I don't know. I'm talking to a camera in a room by myself, so literally don't have anybody to ask about this right, this second. But if you're feeling that, let me know.
Speaker 0:And I also want to say, if you're watching this and you watched some of my previous videos and maybe left a comment or something, I really genuinely appreciate it. I'm going to do everything I can to keep putting out decent content and try to hone in on exactly what the heartbeat is of people that are watching my stuff and try to execute on that. I'm going to make sure that the audio for this one is not messed up. If it is, I'm going to refilm it. And if you're watching this, then it was fine. I did listen to everything with headphones and I saw that some were good, some weren't good, so I couldn't imagine I got a thousand views on a video that I just was making, because it's what felt like something worth talking about and people resonated with, at least to some extent, really appreciate it and I promise to continue to put out good videos, or try to put out the best video I can possibly do, and we'll talk to you soon, see ya.