October Edition 2022 - View From The Fort

Happy Halloween, or according to the photo on the right, Merry Halloween. Do you have plans, a costume party, or tricker-treating with little ones? Maybe you're one of those "unique" adults who come around tricker-treating on your own.

I noticed my wife picked up a large bag of Twizzlers to hand out. After all these years, she still doesn't realize we only hand out the good stuff: Snickers, Reese's, and Twix. Twizzlers?! Not in this household. What does a bag of Snickers cost in this high inflationary period?

Whatever you have planned, I hope it's a great Halloween. Make sure to hand out the good stuff—no Candy Corn.

It's time for another motivational analogy, and once again, the photo credit goes to my son, this time at baseball practice under the lights. The World Series happening, so it's timely.

Would you prefer to hit a single or double or not be relevant sitting on the bench in the dugout?

Some investors tell me they will continue to sit on the sideline until the FED begins easing. I understand this sentiment, but I'm afraid I have to disagree with it.

You have to look at an investment with eyes wide open. Periods of "tightening" are short, historically speaking. Even with a recession on the horizon, with economic turmoil comes opportunity.

He's rounded third headed for home!

Our latest deal?has a fixed interest rate (a hedge against inflation) while still yielding 6% COC + the upside of the Value added (increased Value from renovations & operational improvements). You combined the 6% COC and the upside, and it projects a total annualized return near 20%. 12% is pretty attractive, let alone 20%.

If you're the person sitting in the dugout, waiting for good news from the FED, you're not earning 0%. You're making -8.5%, thanks to inflation.

If you have a vehicle to hedge against inflation, you take it. Hard, cash-flowing assets perform well in recessions.

Stay caught up. Get ahead. Get on base, and in a year or two, when "quantitative easing" kicks in, you'll be heading into home plate rather than just stepping up to the plate.

On to the news...

Hurricane?Ian?Only Increases Rental Demand in Neighboring Areas

With Hurricane Ian approaching, Multifamily operators had to batten down the hatches for the safety of their tenants. Investors had concern for their assets and perhaps even the region's future prospects.

But as this Marcus & Millichap report surmises, nearby markets beyond the immediate region?will benefit from elevated renter demand?as local inventory will fall short of housing needs.

We are invested in several properties in Sarasota county, and we have noticed an uptick in?demand. Once the infrastructure has recovered, the report?expects the region to continue to attract more residents?due to a favorable tax climate, warm weather, and job opportunities.

In Case You Missed It.

Right now, we have this collision occurring in Commercial Multifamily. We have a meteoric rise in lending rates butting heads with a historic supply shortage.

People assume rents can't climb any further. Watch the short interview below to see that rents will continue to rise with the housing shortage continuing into the unforeseeable future. Multifamily will continue to be a fundamentally-sound asset class for investing.

Is it all sunshine and lolly pops? No it is not. This upward pressure on interest rates has made for a very challenging lending environment, and buyers have had to, justifiably, negotiate pricing. How long will rates stay up? No one is really certain, but look for there to be downward pressure on pricing, and thus upward pressure on cap rates.

Thank you for making it this far. If you have interest in any current or future opportunities set up a time to talk using the calendar link below:

Enjoy cash flow, appreciation, and tax write-offs without the hassles of being a landlord.

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