Syndication Investing During a Recession

Multi-Family and Apartment Investing
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Syndication Investing During a Recession

Brian BurkePro Member
Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes

Investing in real estate during a recession makes many people feel like a long-tailed cat in a room full of rocking chairs. For others, it’s an exciting opportunity.

In my 30 years of real estate investing, I’ve seen my share of market cycles and felt the pain they deliver, but I managed to get through all of them without losing any of my investor’s money. Losing my own, on the other hand—well, that’s a different story!

Most at-risk during times like this are the investments you’ve already made. If you are invested with the right sponsor, who implemented the right structure, you’ll stack the deck in your favor for a good outcome. Thanks to recent economic events, it probably won’t be the outcome you planned for, but one that you can live with, all things considered.

But what about new investments? I’ve found that the best investments are ones made at the trough of an adverse cycle, and ones made during the initial climb back up. A notable example is when I bought 120 houses in the San Francisco Bay Area from 2010 to 2012 at the depth of the last cycle. When I sold them 5-6 years later, they had gone up in value by 2-1/2 times. That trade underscores the importance of timing. This cycle isn’t likely to duplicate that result, but it could present some interesting opportunities.

So, what about investing in a passive real estate syndication now? Making the right decision is more important than ever. That means that BiggerPockets’ launch of my new book is perfect timing (The Hands-Off Investor: An Insider’s Guide to Investing in Passive Real Estate Syndications). It is critical that you invest with the right syndication sponsors and in the right real estate. This book will show you how to do both.

In talking with our investors about the current state of affairs and how they are planning their investment strategy from the short to medium term, we’ve heard responses ranging from hoarding cash out of absolute fear to those who view this as a chance to take advantage of opportunities that arise from the ashes, to just about everywhere in between. Where do you find yourself on that spectrum?

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Greg Dickerson
Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes
6y
Originally posted by @Brian Burke:

Investing in real estate during a recession makes many people feel like a long-tailed cat in a room full of rocking chairs. For others, it’s an exciting opportunity.

In my 30 years of real estate investing I’ve seen my share of market cycles, and felt the pain they deliver, but managed to get through all of them without losing any of my investor’s money. Losing my own, on the other hand—well, that’s a different story!

Most at risk during times like this are the investments you’ve already made. If you are invested with the right sponsor, who implemented the right structure, you’ll stack the deck in your favor for a good outcome. Thanks to recent economic events, it probably won’t be the outcome you planned for, but one that you can live with, all things considered.

But what about new investments? I’ve found that the best investments are ones made at the trough of an adverse cycle, and ones made during the initial climb back up. A notable example is when I bought 120 houses in the San Francisco Bay Area from 2010 to 2012 at the depth of the last cycle. When I sold them 5-6 years later, they had gone up in value by 2-1/2 times. That trade underscores the importance of timing. This cycle isn’t likely to duplicate that result, but it could present some interesting opportunities.

So, what about investing in a passive real estate syndication now? Making the right decision is more important than ever. That means that BiggerPockets’ launch of my new book is perfect timing. The Hands-Off Investor: An Insider’s Guide to Investing in Passive Real Estate Syndications. It is critical that you invest with the right syndication sponsors and in the right real estate. This book will show you how to do both.

In talking with our investors about the current state of affairs and how they are planning their investment strategy from the short to medium term, we’ve heard responses ranging from hoarding cash out of absolute fear to those who view this as a chance to take advantage of opportunities that arise from the ashes, to just about everywhere in between. Where do you find yourself on that spectrum?

I have been in the business since 1997 and was heavy in real estate in 2009. I had several ground up projects I had just completed. I was in the process of converting the construction loans to perm financing and all lenders went dark. Not only did they go dark but they started calling the loans. I had $35 million in loans at 9% and close to $300k going out each month to keep the properties going. The Fed was nowhere to be found and there was no talk of forbearance. I was very fortunate as I had cash, great cashflow, I pulled all my equity out through the construction loans and all my loans were non-recourse and guaranteed by the entity holding the property so the lenders had to work with me. I funded all the deals on my own so no investors were at risk. Others were not so fortunate and the banks as you know were foreclosing on properties left and right. I finally persuaded the banks to extend the loans and sold through all my properties over the next two years so everything worked out but it was definitely a scary time and a great learning experience. I had never been through anything like that and didn't even know what a work out was prior to 2009. I continued to do deals and develop properties even during that period as I had cash and cashflow so even though these deals were technically in default and in work out a few other banks were still lending. 

Fast forward to today. This is a very different environment mainly because of the moves on the part of the Fed and the Treasury. They are not going to let the banks, credit and debt markets collapse like they did last time. Especially given the fact that Neel Kashcari is largely influencing the policy makers as he had a front row see at the treasury in 2008-2009. 

The only caveat is we do not know how long this is going to last and what the real and lasting effects will be on the consumer. The longer this goes the more likely things will take longer to recover. What we do know is there are always opportunities in every economic cycle. There will be opportunities in retail and office if you have the stomach and the capital. There will likely be several multifamily properties that will take a hit if the shutdown continues into June or July. Storage will most likely weather the storm and continue to perform however new developments may take much longer to fill so there may be some opportunities there. Mobile home parks are also very recession resistant and given the unemployment benefits the Fed is backing up the states with they should continue to perform. Industrial is booming right now due to the rise of e-commerce but you need to pick your spots as the old "build it and they will fill it" doesn't work everywhere when it comes to industrial. 

Personally I am opportunistic so it's a bit too early for me to jump unless its a really compelling deal. Investors are eager. I get calls every day from people looking to deploy capital. These are relationships I've had for years and they have all been sitting on cash waiting for a time like this. What I have found is those in my network who are liquid (over $100 million) are not concerned and are ready to deploy but they are looking for much more yield than 2 months ago. I have also found that less sophisticated investors especially those who have not been through 2009 are much more conservative and are not comfortable investing in anything right now. 

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  • Alina Trigub
    Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
    6y
    Duke,
    The situation changes week by week, day by day, and at times hour by hour. So whatever we're seeing today may not be the same as we see tomorrow. At this point all predictions are just guesses. So IMHO, the following asset classes should be considered but with the assumption that a deal sponsor has 1) taken such asset class through a recession or two and 2) on a market by market basis: MHP, MFH, storage, medical offices with concentration on infection deceases, and assisted living. Again, this is a generalization and it HAS to be considered on a case by case basis.


    Originally posted by @Duke Giordano:

    Hey Guys,

    Thanks for the insights you have all provided, on this new horizon and potential downturn. As a LP investor in syndication deals across asset classes, I am curios what your thoughts are in relation to what specific parameters in the future I should be paying particular attention to to know when deals start to get better? My guess is it may take some time to for the effects we are seeing today such as "eviction moratoriums, rent loss, increased economic vacancy, decreased NOI, and then decreased property value start to effect deals and parameters presented to an LP from a syndicator. In addition, as everyone has stated, there is also going to be a supply and demand effect, in that they will be less cash, or capitol available to syndicators so improved deal parameters should then follow.

    1. What parameters as an LP should we pay attention to to know when deals are getting sweater? Cap rate change, Pref change, IRR, Equity multiple, Hold time?

    2. Are there any variables that would be more indicative as to when we are getting the 2021 price on a deal, and not 2 months ago's price as this no longer exists?

    3. Are there particular asset classes, you think may have advantages or disadvantages in this market?  Multi-family as typically been resistent in a downturn, but nobody could have anticipated this degree of job loss, federal eviction regulations etc so I am not sure if in the short term (1-2 yrs) in particular MF will be recession resistent.  Obvious Office, and hospitality is going to take a hit with remote work, people not inclined to travel.  Senior housing will take a hit, as if COVID gets into one of these places, the economic decimation will be difficult to overcome.  Student housing will take a hit, as nobod is at college, at who knows with the new normal of a campus will be, once again at least in the short term so this asset class will also take a hit.  Maybe self-sorage, mobile home are better positioned.  Thoughts?

    0Reply
  • Brian BurkePro Member
    OP
    Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
    6y

    @Todd Dexheimer interesting feedback.  I don't blame people for standing down.  We scheduled phone calls with about 800 of our investors, 400 down and 400 to go, and so far the feedback has been about 80% see this as an opportunity.  10% are stuffing their mattress, and 10% are looking at stocks.  I'm surprised, I expected a lot more would be stuffing their mattress.  Maybe the next 400 will all say that.

    @Duke Giordano no one knows for sure, but my guess is we see income bottom out in May or perhaps June.  From there it'll likely stabilize and it'll probably take a year or so before it gets back to where it was in February (maybe 18 months even).  It'll be interesting to see how close that guess is, and it's only a guess so don't hold me to it!  The third quarter might be a buying opportunity because the sellers are going to have to come to grips with the income, and prudent buyers will be using pretty pessimistic assumptions on rent growth, vacancy, concessions and collections (or at least they should be).  

    To answer your questions: 1. None of these.  Pay attention to assumptions for forecasted rent growth, occupancy, bad debt, and concessions.  My sense is that investment performance won't change much, or at least the forecasted performance if the proper assumptions are used.  IRRs in the 12% to 16% range will likely continue to rule the day, but achieving those results with proper assumptions will result in a lower purchase price than it would have two months ago when assumptions for the future were different.  2. I think I covered this in #1.  3.  I think multifamily will be the leader among the asset classes (that doesn't mean it is recession resistant, I just think it will be less damaged than others).  Industrial is probably next or even tied with multifamily (think distribution centers and manufacturing).  The downside is industrial is less liquid.  Hospitality, and retail probably fare the worst.  Somewhere in the middle is office, mobile home parks and self storage.  

    @Mark Allen Kenny thanks for ordering the book! I hope you enjoy it. I dive pretty deep into real estate analysis so even people who don't invest in syndications might enjoy that part. You know, everything you never wanted to learn about cap rate, IRR, equity multiple, debt coverage ratio and on and on--but more geared toward the practical use of those indicators than just a bunch of theory.

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  • Matt Millard
    Lewisville, TX · Member since 2015 · 343 posts · 264 votes
    6y

    @Brian Burke

    Will have to check out the book! Finally some decent books coming out on these topics.

    I have to disagree with you on Multifamily being the leading edge & surviving this downturn. I think it’s going to get much worse & that we will enter a depression. Strong deals with top operators & local jobs base should survive but I think a lot of mediocre deals done & of course the ones stretching the numbers & margins the last few years will be in significant trouble going forward & many will be unable to pay investors or even refinance out of questionable loans.

    I follow Anton Mattley a longtime investor out of Switzerland originally who has decades of Multifamily experience mostly on the commercial finance side of things.

    Also I believe owner finance, mobile homes & self storage will lead the pack during, through & after this economic calamity & align closely with Frank Rolfe & Jeremy Roll.

    1Reply
  • David S.
    Investor · Bay Area, CA · Member since 2014 · 165 posts · 45 votes
    6y

    @Brian Burke. You said, "Somewhere in the middle is office, mobile home parks and self storage." Can you please elaborate on why you believe mobile home parks and self storage will not perform as well as multi-family this time around?  


    There are many that view because of the supply constraints, the fact that MHP tenants own their homes and they stand to gain the most from unemployment and government checks to come, that MHP should perform relatively well vs the other RE classes.

    In terms of self storage, many would argue that during recessionary times when people downsize, they tend to continue paying the $100 or so a month for storage. Personally, I am not so sure of this given all the new supply that has recent come. I am also inclined to think that this time around more people may start asking themselves why they need to store so much stuff but interested in your take. 

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  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    6y

    @Brian Burke most see this as an opportunity and plan on investing in real estate, just not yet. They are cautiously optimistic. 

    0Reply
  • Carl Fredrickson
    Wichita , KS · Member since 2017 · 35 posts · 25 votes
    6y

    I’m guessing one of the reasons it’s harder to find investors is that many of them are no longer accredited due to the drop in the stock market... borderline millionaires are now back to aspiring to be millionaires. 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @David S.:

    @Brian Burke. You said, "Somewhere in the middle is office, mobile home parks and self storage." Can you please elaborate on why you believe mobile home parks and self storage will not perform as well as multi-family this time around?  


    There are many that view because of the supply constraints, the fact that MHP tenants own their homes and they stand to gain the most from unemployment and government checks to come, that MHP should perform relatively well vs the other RE classes.

    In terms of self storage, many would argue that during recessionary times when people downsize, they tend to continue paying the $100 or so a month for storage. Personally, I am not so sure of this given all the new supply that has recent come. I am also inclined to think that this time around more people may start asking themselves why they need to store so much stuff but interested in your take.

    to me Parks with MH owned by the tenants should be in pretty good shape.. hard to move those things.  on SS  not an expert by any means I owned one for 5 years or so but it was unique it was across the street from a few hundred floating homes on the Columbia river so all my tenants were floating home owners..  My banker ( when I asked him) about further investing in them.. He was under the opinion that in a recession folks would think storage is a luxury not a necessity.. I dont know  but I can see that.. I had one tenant that i caught living in one of your storage units.. it did have a bathroom in it.. was more of a small commercial space like something for a car detailer etc.

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  • Chris C.
    Raleigh, NC · Member since 2017 · 347 posts · 94 votes
    6y
    Originally posted by @Jay Hinrichs:
    Originally posted by @David S.:

    @Brian Burke. You said, "Somewhere in the middle is office, mobile home parks and self storage." Can you please elaborate on why you believe mobile home parks and self storage will not perform as well as multi-family this time around?  


    There are many that view because of the supply constraints, the fact that MHP tenants own their homes and they stand to gain the most from unemployment and government checks to come, that MHP should perform relatively well vs the other RE classes.

    In terms of self storage, many would argue that during recessionary times when people downsize, they tend to continue paying the $100 or so a month for storage. Personally, I am not so sure of this given all the new supply that has recent come. I am also inclined to think that this time around more people may start asking themselves why they need to store so much stuff but interested in your take.

    to me Parks with MH owned by the tenants should be in pretty good shape.. hard to move those things.  on SS  not an expert by any means I owned one for 5 years or so but it was unique it was across the street from a few hundred floating homes on the Columbia river so all my tenants were floating home owners..  My banker ( when I asked him) about further investing in them.. He was under the opinion that in a recession folks would think storage is a luxury not a necessity.. I dont know  but I can see that.. I had one tenant that i caught living in one of your storage units.. it did have a bathroom in it.. was more of a small commercial space like something for a car detailer etc. 

    Wouldn't MH owners be one of the first people to loose their jobs?  

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Chris C.:
    Originally posted by @Jay Hinrichs:
    Originally posted by @David S.:

    @Brian Burke. You said, "Somewhere in the middle is office, mobile home parks and self storage." Can you please elaborate on why you believe mobile home parks and self storage will not perform as well as multi-family this time around?  


    There are many that view because of the supply constraints, the fact that MHP tenants own their homes and they stand to gain the most from unemployment and government checks to come, that MHP should perform relatively well vs the other RE classes.

    In terms of self storage, many would argue that during recessionary times when people downsize, they tend to continue paying the $100 or so a month for storage. Personally, I am not so sure of this given all the new supply that has recent come. I am also inclined to think that this time around more people may start asking themselves why they need to store so much stuff but interested in your take.

    to me Parks with MH owned by the tenants should be in pretty good shape.. hard to move those things.  on SS  not an expert by any means I owned one for 5 years or so but it was unique it was across the street from a few hundred floating homes on the Columbia river so all my tenants were floating home owners..  My banker ( when I asked him) about further investing in them.. He was under the opinion that in a recession folks would think storage is a luxury not a necessity.. I dont know  but I can see that.. I had one tenant that i caught living in one of your storage units.. it did have a bathroom in it.. was more of a small commercial space like something for a car detailer etc. 

    Wouldn't MH owners be one of the first people to loose their jobs?   

    Most parks have a lot of retirees and or those living on some sort of fixed income. 

    But keep in mind they own the MH  and the lot rent is less than rent of an apartment.. 

    then at least when I owned my parks.. if their was a loan on the MH  the lender would pay the space rent while it was going through default process.. And then when it got bad we ended up with the lenders selling us the MH for literally pennies on the dollar or relatives just give it away.  that was my experience.  Keep in mind my parks were west coast .. were decent parks are institutional grade investments basically

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  • David S.
    Investor · Bay Area, CA · Member since 2014 · 165 posts · 45 votes
    6y

    Agreed about many MH owners at risk of losing jobs, just like tenants in Class C MF....The offset I heard was that the total of unemployment insurance and those 1200 checks per adult would keep MH owners in good shape to pay lot rent.

    1Reply
  • Anthony Colonnetta
    Investor · Houston, TX · Member since 2015 · 39 posts · 8 votes
    6y

    This is an interesting question to be asking ourselves right now. I agree with most people here that there isn't a lot of opportunities right now, but there might be an opportunity for new real estate investors and seasoned real estate investors in the next 2-3 years. As someone who is wanting to start investing in multifamily product, I am taking this time to continue to build my team and network with individuals. So once multifamily opportunities arise, my team and I will be ready to pull the trigger. 

    3Reply
  • Brian BurkePro Member
    OP
    Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
    6y
    Originally posted by @David S.:

    @Brian Burke. You said, "Somewhere in the middle is office, mobile home parks and self storage." Can you please elaborate on why you believe mobile home parks and self storage will not perform as well as multi-family this time around?  

    Some MHPs will be fine, because of the reasons @Jay Hinrichs mentioned--tenant-owned homes, retirees (who will still get their income) and stimulus payments, etc.  But others will suffer.  Some house the most vulnerable to layoffs from this disease, restaurant, lodging, transportation workers and the like.  I expect a mix depending on the composition of the resident profile and if tenants own the MHs or if the park owns them (the latter is more at risk).

    As to self-storage, I found in the last recession that my SS facility (I only had one so I'm not an expert either) lost business tenants, and residential tenancy was a mix.  We lost a lot because they didn't want to pay for storage, and we gained some because people were moving to smaller homes, etc.  Net was negative, and I'd expect this time around might be similar.  Only time will tell.

    @Matt Millard Thanks, I hope you enjoy the book! As to multifamily, I don't think we disagree that it will take a hit--I think it will, I just think it'll take less of a hit than many other asset classes. I agree too that strong operators will be just fine and mediocre deals/operators will disproportionately suffer. 

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  • Brock Mogensen
    Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
    6y

    Great insight!  I personally think some good deals will start popping up in Q3 and Q4.  I haven't seen any deals in my market come up yet that make sense, weighing in the risk.

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  • Adam E.
    Fairfield, CA · Member since 2019 · 74 posts · 31 votes
    6y

    @Jay Hinrichs @Brian Burke

    I've always heard that self-storage does really well in recession. Is that because of the market's the owner is in? For example, if the ss is closely tied to a class a apartment building or neighborhood, then maybe those tenants will be okay enough to keep their storage as they downgrade their living space? 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Adam E.:

    @Jay Hinrichs @Brian Burke

    the one I bought in Portland I bought in 08  the owner paid 1.2 mil to build it we bought it for 450k and it was half empty .. I ultimately filled it up and then made storage condo's and sold those off to the floating home folks..  so I don't think my experience in SS counts for anything:)

    and was just relating a conversation with my banker of 25 plus years and he take on them at least as it relates to the Portland Metro area. 

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  • Ivan BarrattBusiness Member
    Investor · Indianapolis, IN · Member since 2015 · 764 posts · 953 votes
    6y

    @Brian Burke @Greg Dickerson great discussion so far gentlemen. Sorry I'm late! ;)

    Glad we're not reliving 2008 again! Thankfully, I think the Fed and other central banks have a much better playbook this time. It WILL cause some higher inflation down the road but that's what is needed. :)

    Markets: I think we're painting too broad of brush strokes here.  Real estate is still hyper local. Coastal gateways will soften (some by a lot) while many other areas of the country will continue to grow by 1 to 3%/year simply because they didn't boom (so they won't bust either).

    Midwest: so far so good in our markets here in Indianapolis and surrounding tertiary cities. In the B+/B++ range we're seeing low to mid 90% rent collected. Many residents are working from home and others are getting healthy unemployment checks. In our markets we're still evicting. Thankfully, shelter comes right after food and water so most are paying.  It will however be interesting how cash flow is affected in the short run.

    Investors: Our higher net-worth individuals and families are looking to re-balance their portfolios more heavily towards alternative assets (Income Property, Private Equity, Venture, Gold, etc), while what I would call our "retail LP's (net worth sub 5m) are getting more skiddish. Interesting enough I'm seeing my age cohort (late 30's through 40's) "high earners" pile in.

    Deal Distributions: Many of our assets will distribute. Some of our lower end communities will conserve more cash to be cautious. Many of our deals are HUD financed (more defensive in nature) so there's a lot cash in reserve thankfully.

    Deal Flow: seems to be picking up but we'll see.  We've got a couple interesting deals in the pipeline that came to us direct. 3 months ago they'd have traded higher on the open market. The fed keeps bailing out weaker players. I'd like to see some strong hands take some weak hands in my own local game of real estate but I'm not convinced.  The stimulus may greatly reduce the amount of opportunistic deal flow. Too many dollars will still be chasing yield.

    Syndicators: There will be less of them in the near future. Strong operators will be key in achieving alpha returns. Market share for newer promoters without in-house management teams will be scarce.

    Some Macro Thoughts: It's an exciting time to be alive. Globalization is being dismantled in favor of "America First" policies (*personally not a globalist or a nationalist. Just seeing the world for what it is"). This mega-trend started before CV19 and now it's simply speeding up. The US and "Fortress North America ((Canada, US, Mexico)You heard it here first)" will dominate the next several decades if not longer. The US economy will grow again as global supply chains continue to on-shore.  North American dominance will be built on Land, Resources (Food, Energy, Water, etc), People, Tech, Medical Innovation and Infrastructure.

    Interest rates will stay low for another decade and so will cap rates (albeit with some rise in riskier asset classes like retail, hotel, office). US Safety and quality will continue to attract huge amounts of capital keeping a governor on rates.

    When inflation returns landlords will raise rents even more.

    And a game as old empire will continue...

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  • Adam E.
    Fairfield, CA · Member since 2019 · 74 posts · 31 votes
    6y

    @Jay Hinrichs

    Understood, thank you for the response!

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Ivan Barratt:

    @Brian Burke @Greg Dickerson great discussion so far gentlemen. Sorry I'm late! ;)

    Glad we're not reliving 2008 again! Thankfully, I think the Fed and other central banks have a much better playbook this time. It WILL cause some higher inflation down the road but that's what is needed. :)

    Markets: I think we're painting too broad of brush strokes here.  Real estate is still hyper local. Coastal gateways will soften (some by a lot) while many other areas of the country will continue to grow by 1 to 3%/year simply because they didn't boom (so they won't bust either).

    Midwest: so far so good in our markets here in Indianapolis and surrounding tertiary cities. In the B+/B++ range we're seeing low to mid 90% rent collected. Many residents are working from home and others are getting healthy unemployment checks. In our markets we're still evicting. Thankfully, shelter comes right after food and water so most are paying.  It will however be interesting how cash flow is affected in the short run.

    Investors: Our higher net-worth individuals and families are looking to re-balance their portfolios more heavily towards alternative assets (Income Property, Private Equity, Venture, Gold, etc), while what I would call our "retail LP's (net worth sub 5m) are getting more skiddish. Interesting enough I'm seeing my age cohort (late 30's through 40's) "high earners" pile in.

    Deal Distributions: Many of our assets will distribute. Some of our lower end communities will conserve more cash to be cautious. Many of our deals are HUD financed (more defensive in nature) so there's a lot cash in reserve thankfully.

    Deal Flow: seems to be picking up but we'll see.  We've got a couple interesting deals in the pipeline that came to us direct. 3 months ago they'd have traded higher on the open market. The fed keeps bailing out weaker players. I'd like to see some strong hands take some weak hands in my own local game of real estate but I'm not convinced.  The stimulus may greatly reduce the amount of opportunistic deal flow. Too many dollars will still be chasing yield.

    Syndicators: There will be less of them in the near future. Strong operators will be key in achieving alpha returns. Market share for newer promoters without in-house management teams will be scarce.

    Some Macro Thoughts: It's an exciting time to be alive. Globalization is being dismantled in favor of "America First" policies (*personally not a globalist or a nationalist. Just seeing the world for what it is"). This mega-trend started before CV19 and now it's simply speeding up. The US and "Fortress North America ((Canada, US, Mexico)You heard it here first)" will dominate the next several decades if not longer. The US economy will grow again as global supply chains continue to on-shore.  North American dominance will be built on Land, Resources (Food, Energy, Water, etc), People, Tech, Medical Innovation and Infrastructure.

    Interest rates will stay low for another decade and so will cap rates (albeit with some rise in riskier asset classes like retail, hotel, office). US Safety and quality will continue to attract huge amounts of capital keeping a governor on rates.

    When inflation returns landlords will raise rents even more.

    And a game as old empire will continue...

    I like it .. nicely put Ivan.. and I sure hope it or most of it comes to pass.. 

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  • Adam E.
    Fairfield, CA · Member since 2019 · 74 posts · 31 votes
    6y
    Originally posted by @Ivan Barratt:

    Syndicators: There will be less of them in the near future. Strong operators will be key in achieving alpha returns. Market share for newer promoters without in-house management teams will be scarce.

    I was really intrigued by Grant Cardone's initial response of enormous staff cuts. Does anyone know if this was related to his syndications or was it all about his other business ventures? I agree that the weaker players in the syndication worl will likely be weeded out. Do you think he'll be exposed? Or will his 10X get him out? 

    PS: I love 10X, but I hear a lot of controversy about Cardone. I want him to do well, just interested in hearing opinions

    0Reply
  • Ivan BarrattBusiness Member
    Investor · Indianapolis, IN · Member since 2015 · 764 posts · 953 votes
    6y

    @Adam E. I like GC's sales and biz training. It's mostly solid advice that's been repackaged in a great format.  As far as his real estate offerings I think they're simply "ok." From a fees and returns perspective he's charging at the higher end and targeting lower returns. He can do this thanks to his large presence/audience.  I don't see that as good or bad; just factual.

    3Reply
  • Adam E.
    Fairfield, CA · Member since 2019 · 74 posts · 31 votes
    6y

    @Ivan Barratt

    Okay, interesting. Thank you!

    0Reply
  • Greg Dickerson
    Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes
    6y
    Originally posted by @Adam E.:
    Originally posted by @Ivan Barratt:

    Syndicators: There will be less of them in the near future. Strong operators will be key in achieving alpha returns. Market share for newer promoters without in-house management teams will be scarce.

    I was really intrigued by Grant Cardone's initial response of enormous staff cuts. Does anyone know if this was related to his syndications or was it all about his other business ventures? I agree that the weaker players in the syndication worl will likely be weeded out. Do you think he'll be exposed? Or will his 10X get him out? 

    PS: I love 10X, but I hear a lot of controversy about Cardone. I want him to do well, just interested in hearing opinions

    Well...Funny you should ask. I will be interviewing Grant on Monday to address these questions and get the truth about Cardone Capital. Stay tuned!

    3Reply
  • Adam E.
    Fairfield, CA · Member since 2019 · 74 posts · 31 votes
    6y

    @Greg Dickerson

    Wow! Awesome, thanks :)

    0Reply
  • Greg Dickerson
    Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes
    6y
    Originally posted by @Adam E.:

    @Greg Dickerson

    Wow! Awesome, thanks :)

    It will be a video recording. 

    2Reply
  • Roni E.Pro Member
    Specialist · Earth 2.0 · Member since 2019 · 598 posts · 271 votes
    6y

    I think you should focus on cash on cash. Also,truly understand and see what rent collections have been for the last 120 days. I would also be careful of a project where there is a lot of rehab or construction work. 

    0Reply
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