"Learning to dance in the rain" is a metaphor that means finding joy and happiness in the midst of difficult or challenging circumstances. It is about embracing life's storms and not just waiting for them to pass but learning how to enjoy them and grow through them.
Just as learning to dance in the rain requires us to embrace the rain, learning to enjoy life's challenges requires us to have a positive mindset and a willingness to learn and grow from our experiences. It's about finding the silver lining in every situation, no matter how difficult it may be.
Learning to dance in the rain means being present in the moment and not letting the negativity of the situation bring you down. It's about seeing the beauty in the rain and feeling grateful for the experience, even if it's not what you would have chosen.
In short, learning to dance in the rain is a powerful metaphor for resilience, positivity, and finding joy in the midst of adversity. It is a reminder that life is not always easy, but with the right attitude, we can make the most of every situation and come out stronger and happier on the other side.
This quote is great for today’s times where we are in turbulent economic times. How do we dance in the rain through this economy? How do we not only survive, but, prosper? How do we keep enjoying life? How do we keep providing for our children instead of having to tell them “No, we can’t afford that right now.” Well, then, when can we afford this your child asks. When? This is a painful question because almost all of us want to provide everything for our children.
We are bombarded with negative economic news. We personally experience some of our investments taking a tumble. Some of our investments may not be tumbling today, so do they need to be changed before they are projected to tumble? Do you remember 1988-1990? Do you remember 2008 – 2010? What is different now from then?
We heard of the shutdown of the Silicon Valley Bank. Why did it shutdown? It was heavily exposed in Cryptocurrency and Venture Capitalist Funds. And they had a run on the bank, withdrawing about $40 Billion of the $180 billion cash on deposits. But, banks keep a fractional reserve so this more than cleared out the deposits and forced the closing. This bank is different than 99% of the rest of the banks so it is an isolated event. Each year a handful of banks are shut down, so it is a yawner, but, a great big headline for sensational news.
The Fed Funds rate is being raised on a regular basis, increasing the cost of debt for everyone including the cost of the Federal Debt. This does have a direct effect on real estate investing, and we have to know how to navigate it. We “stress test” the investments we’re looking to buy to determine if increasing interest rates cause them to go negative or remain positive. We’re mitigating it via long term loans at fixed interest rates. And we’re mitigating by offering lower acquisition prices to account for the increased cost of funds.
We have a big opportunity coming in the very near future just because of increased interest rates. First, many commercial loans are 5 or 10 years, instead of the residential 30 years. Many of those loans were below 5% interest and the new loans will be above 7%. Going from 3% up to 8% can easily cause the stabilized multifamily property to have a negative cash flow. That means a distressed sale or foreclosure is eminent.
Second, many commercial loans are variable rate loans. These loans started 2 to 3 years ago, with the expectation of a stable market, at 3-4% interest. Going to above 7% causes the cash flow to go negative. Same result as the first situation, a distressed sale or foreclosure.
Third, many commercial construction and value add (translated needing major renovation) loans are short term 1 to 2 year loans. As they come due, the new interest rates will not be affordable, and will cause the cash flow to go negative.
How long can you survive with a negative cash flow on your family situation? Now can you imagine a negative cash flow in the millions of dollars on a commercial property? Just write a check for a million dollars a month.
We will have an opportunity that hasn’t happened since 2008 through 2010. We can buy as much as we have cash to buy, at the right price, that has a positive cash flow because we have factored in the higher interest rate and financed at a lower loan value and for a longer time period of 20 to 30 years, to ride through the current turbulence. So, life isn’t about waiting for the storm to pass, it’s about learning to dance in the rain.
