What Is Worrying You About This Part of The Market Cycle?

[Gino Barbaro]

I would love to hear what is causing concern to you in this part of the cycle. I've heard from many investors that they waited until the market went into a correction. We all thought the market was at a high in 2019, then 2020, then 2021, and finally 2022.

It seems nowthat we are either entering a recession or in one, and the same investors that were waiting to invest are now clamoring that it's too risky to jump in now. 

I'm always looking to address what's holding us back from taking action, so we can focus on learning the skills that will help us invest in any part of the market cycle.

Please share your thoughts with me

Thanks

Gino 

[Brian Burke]

@Gino Barbaro this is a great question.  What is "causing concern" for me is the lack of clarity of the direction and trend of three variables, all of which are crucially important to proper deal analysis:

1. Interest rates

2. Rent growth (going forward, not historical)

3. Exit cap rates

The markets are moving, and until we get more clarity, the assumptions, the supporting data, and the theses in which that data is based are all in a state of flux.  

The market went crazy for almost a decade.  It was a great ride.  I spent 2021 and early 2022 selling.  To your question about "what's holding us back from taking action", it's important to understand what action looks like.  For me, taking action was selling, not buying.  

Right now, for me, taking action is buying real estate debt, not real estate.  Even after acquiring over 750 properties in my 34 years in this business, I still have a thirst for real estate.  But I've learned that you don't always have to buy.  Instead, you have to adjust your tactics and strategies to find what works in the environment you are operating in.

I'm not worried about "missing the market."  I learned a long time ago that it is better to be a week late than a day early.  I realize that sounds like an odd statement, but I've been both and I can say, from my own experience at least, which one has been far more profitable.  So as far as buying is concerned, I'll wait for clearer signals (or a screaming deal).  I'm not there yet.