I’ve spent the past few months touring deals from Tulsa to Toledo, and one theme keeps slapping me in the face: affordability is the new alpha. When both mortgage rates and home prices sit stubbornly near post-2008 highs, capital naturally migrates to markets where numbers still pencil. That migration is reshaping the investment map—fast.

All-Cash’s Fade, Leverage’s Return

2024 logged the lowest share of all-cash investor purchases since 2008. Don’t panic; it’s not a liquidity crunch. It’s simply a by-product of deeper inventory and stickier rates. Mom-and-pop buyers are levering up while institutional players keep plenty of dry powder for value-add execution. The headline: 62.3 percent of investor deals still close in cash—nearly double the rate for owner-occupants.

A few key signals jump out:

Rent Resilience: Kansas City rents rose while national averages fell 1.7%. When rents defy gravity, cap-rate compression follows. Inventory Scarcity: Delaware, Ohio, and Nevada saw investor share pop as listings stayed scarce, locking renters in place and keeping absorption strong. Affordability Spread: Net yields above 6% in Kansas and Missouri crush the 2% you’ll find in coastal trophy assets. That spread alone is worth a plane ticket.

How Developers Can Ride the Wave

Build-to-Rent Clusters Target secondary metros where median purchase prices still sit below $300 k. Structured correctly, you can deliver townhome-style rentals at scale and exit to yield-hungry REITs. Neighborhood Retail & Self-Storage Follow the rooftops. Every thousand inbound renters translates into daily-needs retail and 60–70 self-storage units of latent demand. Entitle land within five miles of workforce absorption corridors. Light-Industrial Flex Logistics nodes along I-70 (MO/KS) and I-35 (OK) are catching organic tenant demand from reshoring and e-commerce spillover. If you’re not underwriting 28-foot clear, you’re behind. Debt Stack Creativity With LTVs tightening, consider pref equity or CPACE to close the gap. Smaller investors are already relying on higher leverage—developers can, too, if the underwriting is rock solid.

Big Picture: Opportunity Wrapped in Volatility

Real estate has always been a spread game: the delta between cost of capital and stabilized yield. Today, that spread lives in the heartland and the mountain states—markets that still fit the middle-class paycheck. Ignore them, and you cede ground to the cash-flow-driven investors scooping up properties while Wall Street argues about the Fed’s next move.

I’ll keep scouting these markets and sharing the granular intel—rent rolls, tax incentives, loan terms—that turns data into dollars. Stay tuned; the playbook is still being written, and the early entries look very lucrative.

—Daniel