All Forum Posts by: Paul Azad

 Agree with all of your points short term, next 6-12 months, but not longer term. Trump will do what he did his first term, which is to pressure Jerome Powell to increase quantitative Easing and to lower the Overnight lending rate, and he will massively increase the money printing and treasury issuance as he did before. (Hopefully, he won't send people 3.4 Trillion again directly with his name on the treasury checks :) With the deficit running at >7% to GDP, a height usually only seen during wartime, further money printing and tax cuts, as he did before, will worsen this deficit, then total debt, and this more massive US treasury issuance (more supply) will cause long term Rates to continue the climb they started 5 years ago when 10 yr yield at 0.31% intraday in 3/2020.  This is basically the same set-up we had in 1945, coming out of WWII with massive debt/deficit. This caused a 36 year "Inflationary Deleveraging" , and yields gradually rose to US 10yr @15%, mortgage rates @19%. The current situation is similar with no out, except radical cost cutting, however if you back out the 2 trillion a year deficit then over last 2 years our GDP has actually been negative 1.6% or we would have been in recession. So that's politically not an option ie to cause a necessary recession and unemployment.

So, I suspect Trump will Trump and we will see gradual rise in all long yields from current levels to 14-16% over next 30-40 years. Real Estate Cap Rates will of course follow. Prolonged "Stagflation" will cause rise in rents, but with much higher vacancies and rising interest rates and falling property values, like the 1960s1970s into early 1980s.  A very bad portent of this is the 40% rise in GOLD the last 12 months on top of strong run in 2023, this is how things started in past cycle as well, with stocks flat for 20 years and volatile commodities. 

Tariffs won't have much initial impact as 83% of US economy is Services and unimpacted, and of the goods part of economy, we Import far more than we Export so tariffs on either side will hurt foreigners far more than USA, but trade war will degrade GDP, so 10yr yield will fall more from that lower expected GDP than from mild inflation causing it to rise, but this is all irrelevant short term "re-arranging deck chairs on the Titanic", so to speak

Highly selective Real Estate picking/management or very selective Value based stock picking or precious metals will be the probable course to Navigate the next 30+ years. 

Unmasking the Real Estate Wealth Myth | Nasdaq

a short article from Nasdaq debunking this social media myth, at least in the US. However, there's an obvious loophole to the claim because if you buy a house for 999K and then the value goes over 1 million then technically you're one of the 90% that just became a millionaire through real estate :)

REIT investing is a much less active way of investing into the 11 major real estate sub-sectors, in the US we have 274 listed REITs on the major exchanges of NYSE and NASDAQ, and about 75-80 of them are not equity REITs but rather mortgage REITs, which I like to park cash in when 10yr yields are trending down to give me capital appreciation plus 14-15% dividend yields. check out

alreits | Global REIT Research

to do more thorough individual research. Historically REITs in US have outperformed the sp500 for last 50/40/30 years by 3-4% a year, but they have underperformed sp500 in the last 20 years due to Quantitative Easing induced liquidity stock inflation. This means it's likely a good time historically to buy REITs as they are relatively cheap. 

VNQ or IRET are passive and actively managed ETFs in US that hold hundreds of REITs if you don't want to choose individual ones.   

private real estate syndications are another option to passive RE investing, but IMO require a lot more research before buying than REITs where you have a professional team managing under SEC regulations, with public accounting and filings. REITs can also get capital cheaper than you/me/syndications. In fact, most just print new shares to get billions to invest when stock price is high and buy the shares back when price is low. I wish I could do that. :)     good luck :)

Hi Brian, are you concerned about the new deportation policies by the new administration? Here in Texas, thousands of people have been deported in the last 2 weeks and many who have not committed any crimes per our local news agencies. President Trump said during campaign to plan on 14 million to be deported out of 32-35 million illegal immigrants in US out of 335 mil population base. This would amount to about 4-5% of US residents and of a demographic which disproportionately rents multi-family and also SFRs not owns. This could depress rental rates which have fallen y/y by 9% in Austin and other formerly Hot Cities already. Combined with increasing supply, what could this reasonably do to MF market and syndications near term, ie next 1-2 years?  thankyou

separate question on Tariffs possibly causing trade war and inflation and higher 10yr yield and cap rates?

     I think the 1% rules best value may be to protect less experienced investors from overpaying for a rental Income producing property. As we all know, the only Cardinal Sin of investing in any asset class is "overpaying".

There are often long stretches of flat SFR markets in US. like '79-'83, '89-'94, or even down markets like '06-'13 where single family home values dropped 36% on average across country, so 1% rule may help keep some investors out of trouble by at least having some cash flow to safely carry the mortgage during those times.

Perhaps the SFR market is overvalued now and 1% rule is just a simple valuation tool like a P/E multiple in equities telling people to stay clear.

      My parents bought many SFRs in 70s and 80s and with mortgage rates at 18-19% but always made money as rents greatly exceeded mortgage payments, because home prices matched incomes for 200 years prior to 1994, then FED started money printing x 30 years until now. (systolic pressure rising so won't get into that)

And many less experienced individual investors in SFRs don't do as well as others and "well" means what could you have done otherwise. Chart below shows last 45 years, about 14% in sp500 and 8.7% in rental income producing real estate, nominal not real.

so maybe if the 1% rule is telling you that single family rentals are too expensive? Then perhaps you could invest in something else until the single-family rental market is back to an affordable range, and in the meantime, you could also make a lot more money.

Quote from @Greg Scott:

Quote from @Henry Clark:

Quote from @Greg Scott:

I have invested in over 50 syndications, of which about 45 are still active.  I have also done four syndications myself.  Of course, on the syndications we put together, we get some compensation for our efforts, so I'll ignore those when discussing my returns below.

Of the 11 deals we've had that have gone full cycle, we are averaging about a 40% annualized rate of return.  Of those 11, only one had net loss, and clearly the others did very well with outsized returns.

Of the 45 that are still active, the returns have been a little softer the past two years, and we had two small capital calls.  On the other hand, we also had three provide cash-out refinances.  My quarterly cash distributions hit bottom about a year ago and have been on the rise since then.  About 1/3 are still not providing distributions but their cash position is strong and I'm not concerned about them potentially selling at a loss.  Six of them just launched this year, so I wasn't expecting distributions anyways.

These syndications have change life.  I am truly blessed.

However, you should know that these syndications are not available to everyone.  I am a member of a private group that puts these syndications together ONLY with members of the group.  They have rules and best practices about how we put these deals together which has collectively saved us from much of the pain being experienced right now in the multifamily space.

 Thanks for insight.  When you say 40% annualized is that per year or over the entire life cycle.  Example if 3 years then say 13% return each year?  Or 40% each year for 3 years?  

Great job on the due diligence or Operational process you have going.  

This image summarizes my syndication returns on deals that have gone full cycle.  I haven't added the 11th, the one that lost about 60% of value.  They haven't fully closed out the deal yet, so I don't know exactly where it will end up.

 Congratulations Greg, Those are amazing returns from. 2014 to 2023 over a 10 year span to average 40 per cent is phenomenal. What are some of the guidelines you and your group have used to keep you out of trouble? And get those incredibly good returns? Were all these deals multifamily value add or any core deals? Thank you.

Every nation's 10-30 yr treasury bonds are a reflection of only two factors. Risk of future inflation, and projections of gross domestic product. When you add those together that's typically your 10 year yield, currently projecting 2% inflation and two and a quarter to 2.5% GDP growth near term, Bond market has felt that FED cut 8 weeks ago too much and too early, thus risking return of inflation. Add in Trump, who printed 3 Trillion and mailed to people with his name on the checks just 5 years ago, and the Bond market has been guessing higher inflation risk component. 

But market always buys the rumor and sells the fact, so 10yr should fall soon to around 4, or even lower if PCE print Wednesday is lower than expected. 

Longer term, meaning next 30-40 years, Bond market will do what its always done to runaway Fiscal looseness and it will take 10yr up to 10 -16% to put pressure on FED to deleverage the last 45 years of crazy spending, like it had to do from '45 to '82, or 1900-1925, slow and gradual. 

Or maybe FED will just keep printing Trillions and Bond investors will for some strange reason or blind generosity only demand 3-4% on 10-30yr shaky loans. Now that's funny :)

Sorry for the following Contrarian advice, but you're not a 5 year old so:

The only reason to buy a personal residence (Home) is because someone is forcing you to.

Usually, this person is called your Spouse (which is Latin for someone who forces you to make horrible financial decisions then criticizes you for them endlessly:)

perhaps DON'T buy a home, just rent something affordable and invest the 20% or in your case 50% into the stock market (sp500 16.1% yearly return last 15 years, 11% last 50 years, 10% last 125 years)

remember, your RENT is your maximum monthly housing expense, but your Mortgage is your minimum or starting monthly housing cost, it always goes up from there

I've, owned 2 personal homes, 100% appreciation in 6years on #1 and in 7 years on #2, (I timed our market perfectly both times), with 20% down and very low mortgage rates, but after honestly calculating all expenses, only made about 5-6% a year "investment wise". Would have done 2-3X better in stock market, and with 1000% less grief/stress. 

read this to start with 

Why your house is a terrible investment - JLCollinsnh

Also, big picture, residential RE, appreciates only at rate of inflation, on average both in US and abroad.

"Transaction prices of real estate on the Herengracht, the finest of them all, have been carefully recorded. In 1997 Dutch economist Piet Eichholtz build a price index of houses on the Herengracht with a constant quality from 1628 until 1973. This was the birth of the Herengracht Index. Eichholtz’s initial research showed that real housing prices (corrected for consumer price inflation) gradually changed over time, but were fairly equal in 1973 compared to prices in 1628."

We are currently in highest residential housing price bubble ever recorded in US history (Case-Shiller housing Index) so If you buy Cisco in Dec '99, ain't gonna go well for you, probably :)

good luck

Warren Buffett has a rule 1 of investing, which is "don't lose money.", and his rule 2 is "see rule #1"

This translates to me as "Don't overpay.", if you can be thoughtful and diligent and very skeptical, and wait until things are obviously cheap, you will generally outperform 90% of other investors. equation {Buy low + decades} = Rich

Get a hold of someone on the phone, about the investment, ask a few questions and get their best contact information. Don't be afraid to tell them you were nervous as you didn't hear back from them, and ask if they are swamped or were on vacation and expect and gage their answer. Life happens and people get busy or someone gets sick, so it may not be a red flag that they took a week, but it shouldn't happen again and again. They may surprise you with their honesty and that may make them a better syndicator actually. Lord knows there are a lot of fancy, online GP's now with beautiful websites, YouTube channels, and 10 people in their investor relations department but only 1 inexperienced guy in their acquisitions who couldn't underwrite a lemonade stand.

good luck :)

Copium2024 appears to still be the most plentiful element on the periodic table, and also on this thread, Remember Norada Capital Management invested the investor's note money into an obvious scam company run by a documented scammer, which filed for bankruptcy almost two years ago. It has a half a dozen lawsuits against it. Either Marco knowingly did this and was complicit or he unknowingly did this and was moronic. Any other interpretation is pure Copium2024 :)

The investors don't need "communication", they need an apology, an admission of what he did, and their money back. 

Great webinar/format, please keep it up.

If Monday is GP and operating the property, who is RSN? and why are they needed in this deal? Are they bringing equity? Are they part of the pref equity position? Are they given a JV-co-GP position for fundraising or will they be involved in the management of the property?

Atlanta MSA is great and growing, but Multi-Family supply coming on line there both now and through next year is significant, wouldn't this be a better/cheaper deal 1 year from now?

Does Trump's election yesterday, with presumed higher GDP growth and higher inflation (Tariffs/Deficits), which means higher 10 yr and Cap Rates, change timing of CRE acquisitions?

Thankyou