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Investors own about 9% of the houses in Dallas. But right now they're listing almost a quarter of everything that's for sale. The tired landlords are walking toward the exit, and most buyers are too scared of a soft market to go stand by the door. Hey, prime investors, Martin Maxwell here. Welcome back to the Five Minute Prime podcast. Who's selling and who you actually want? We've spent a month diagnosing the soft sun belt. The price splits, the builder margins, the flat rents. Today we stop diagnosing and start buying. Because all that softness did one thing for an operator. It built a seller list. And it's a real one. Across the country, investors are listing a bigger share of homes than they own. In Dallas, 9% of the stock, almost 23% of the new listings. The big institutions are turning into net sellers this year. Invitation Homes is guiding to sell more than it buys in 2026 after offloading over 1,300 houses last year. And underneath them sit the mom and pops, who own roughly 85% of the rentals in this country. That's your seller universe. The pressure that's pushing them out is exactly what you'd guess. Rent that won't grow, insurance that doubled, and one too many 2 a.m. turnover calls. But here's the catch that separates operators from tourists. Lock-in cuts both ways. Better than half of all mortgage holders are sitting on a rate under 4%. And those landlords are never selling you anything. The math keeps them. So the seller you actually want isn't a landlord, it's a specific one. Three profiles really. The free and clear retiree who's just done, the heir who inherited a rental he never wanted and lives three states away, and the storm state owner watching the insurance premium eat his cash flow. What those three share, no cheap loan anchoring them, and enough equity to actually take your number. The guy sitting on a 3% loan and positive cash flow does not sell, you saw, so don't waste a stamp on him. And be careful with the truly underwater 2022 buyer. He may be motivated, but if he owes more than your offer, he can't say yes. That's a short sale or it's nothing. That's the tired landlord channel. And you don't find them on the MLS, competing with everybody. You find them off market. An absentee owner mail list, the address that doesn't match the property, filtered to free and clear and long held. Expired listings too. Someone who tried to sell at retail failed, and is now tired enough to take a real offer. And don't bother chasing the big institutional sell-off. Those scattered houses mostly go to families buying a place to live, not to investors. Now, don't kid yourself that you're the only one mailing these. Every wholesaler in town works the same absentee free and clear list. Your edge isn't the list. It's that you've already run the floor at flat rent before you ever lick the stamp out, and they haven't. That's the door. Now let's talk about what you write on it. Underwrite to flat, then let the floor pick your metro. First rule of buying a soft market, underwrite to flat, zero rent growth, none. Our numbers have Austin rents down 2% year over year, San Antonio down almost 2%, Tampa down. You do not get to pencil in 3% rent bumps to make a deal work. If it doesn't pencil flat, it doesn't pencil. And run a fat expense ratio because insurance is the line eating everyone. In Texas, landlord coverage is running 3.5 to 6 grand a year now. In Florida, 7 to 14. So you're underwriting at 40 to 50% expenses on these, not the 35 somebody's brochure shows you. And that's operating, plus it doesn't include the turn. A tired landlord's house is a deferred maintenance house, so reserve for the roof and the HVAC on top, or your day one number is lying to you. Now the move that ties it together. Back in EP 130, I gave you the plus three rule. In a softening metro, demand a cap rate at least three points above normal, EP 136 made it plus five in a storm state. Here's what I didn't tell you then. That floor isn't just a price. It's a GPS. It tells you which metros your money can even buy in. Watch. Take a tired Austin landlord with a single family rental. Rents flat at $21.50 a month. After real expenses, call it $15,000 of NOI. Austin's a low cap town, around $4.5, so your plus three floor is 7.5%. 15 grand at 7.5% says your max price is about $206,000, but they bought it in 2022 for $4.30. No tired landlord on Earth sells you a house for less than half what they paid. Austin fails the test. You wait. Now the same buyer, same $15,000 of NOI. A duplex in San Antonio. San Antonio runs higher caps around $6.5%. So the plus three floor is 9.5%. That says max price $160. Their basis? $160 is a 33% haircut, and for a free and clear owner who's done with it or one the insurance is chasing out, that's a number a motivated seller can actually reach. Same income. Opposite answer, the floor just drove you out of Austin and into San Antonio. And in a storm state, Florida, coastal Texas, you don't use plus three, you use plus five. Back to EP 136, the premium down there is a different animal, 7 to 14 grand a year, demand five points over normal, and the floor knocks 30-40% off the ask. That's not being cheap, that's pricing in the exact bill pushing the seller out the door. The insurance making them tired is the insurance you're about to pay. One honest caveat, the floor screens retail deals. A value add, a seller with way under market rents, a wholesale at 60 cents, those still pencil in Austin. The floor kills paying retail for flat rent. It's a screen, not a wall around a city. Why this summer? Here's why now and not someday. By the trough. Rents are flat today. But the apartment wave that crushed them is rolling off a cliff. New deliveries in Austin are down forty seven percent this year. Denver cut in half, Phoenix down forty. Underwrite to flat, and the disappearing supply is a free option on your upside. You're buying the bottom of the construction cycle. Think about what that does. The supply filling vacancy and capping rent stops coming. Vacancy tightens, concessions burn off, and the flat rent you underwrote turns out to be the conservative case. You didn't bet on the recovery, you refused to pay for it, and you got it anyway. There's a real page settlement in the news too, two hundred eighteen million in May. That forces the big apartment operators to stop coordinating rents through the algorithm. For your single family seller, that's a minor indirect thing. It cools the broad rent story a little. Don't build your offer on it. Just know the wind's at your back, not in your face. The honest part, this window isn't open forever. Cap rates are forecast to compress as credit loosens and the good tired landlord deals get competitive in the back half of the year. The math favors now, not the fourth quarter. And if you bought in Austin in 2022 and your rent's flat, you're the tired landlord in this story. I'm not telling you to dump it at the floor. Your basis keeps you. This is about your next deal and the discipline that keeps you from being the seller in next year's episode. Challenge and close. Tonight, do this. Pull an absentee owner list for one secondary Sunbelt Metro, San Antonio, Houston, not Austin, and filter it to free and clear or long held. Take three of them, underwrite each one flat, and run your plus three or plus five floor. And underwrite the debt at a 7% loan on flat rent. Does it cover or is this a cash deal? The one where the floor clears what the seller paid and the debt works. That's your first piece of mail. The rest you skip. The floor already told you. And know the game. Three is a drill. Real mail is hundreds of letters to close one or two. You're not sending three and waiting by the phone. And next episode, once you've got one under contract, we'll talk about the part nobody warns you about. Prime investors, go meet them at the door.