As I talk with passive and active investors, there's hesitation about today's market, but really, it's fear. I don't want anyone to miss opportunity because of the boogie man.
Investors basing their decisions on fear are missing today's opportunity.
Many active investors are finding it challenging to raise capital for solid projects as their passive investors shift to 'capital preservation' mode.
Additionally, many active investors are willingly seated on the sidelines waiting for 'the storm to pass' or the fog to fade enough to see clearly.
One group of investors are awaiting another '08 crash; hoping for the gains from picking up real estate at "rock bottom prices".
Another group of investors are simply afraid.
Fear.
Doubt.
Uncertainty.
These will cost you time and money.
Is it Truly 'Capital Preservation'
Money in bank accounts is losing value every single day.
Today's $100k in the bank looks more like $92k at the end of the year.
Waiting to put money to work in a proven asset is setting everyone back far more than they realize.
Instead of gaining anything, or simply staying fixed, money in the bank is losing.
It's critical that investors ask themselves, "How will that money be restored?".
Many apartment investors are happy to see their friend Inflation because historically apartment complexes trend with inflation.
While your money can sit in the bank or company retirement account getting jostled around by the market, there's another option. Your money can be growing in an already proven and existing business: An apartment complex.
Buy when there's blood in the streets, even if it's your own. -Nathan Rothschild
Creative Financing
Stories of double-digit interest rates and inflation are always top of mind because my dad entered residential real estate sales in the late 70's. His initiation to real estate was double-digit interest rates and tight financing.
"Creative financing" wasn't a tool to improve a deal, it was how deals got done.
However, over the past dozen years investors have luxuriously leveraged "creative financing" to improve their returns. As the market shifts, understanding a variety of ways to structure deals as well as a healthy perspective on interest rates is critical.
Because the media keeps interest rates in the spotlight as the star of the show many forget a good deal is an ensemble cast. Low rates won't help a deal in a depreciating market perform. Can low rates create a winning deal when a market's absorption rate is low because of overbuilding (some suggest Austin, Texas may experience this)?
Good investing requires a circumspect approach.
Three Keys Investments isn't stilling on the sidelines waiting and we're not fearful of what the future holds. Our consistent holistic approach to investing continues to account for the elements that create a winning opportunity for our investors, residents and communities across the country.
Knowledge is the key to overcome fear, doubt and uncertainty.
Don't waste time.
Don't lose any more money in your effort to preserve capital.
Schedule a time to discuss your investment goals and how Three Keys Investments can help you THRIVE in every phase of the market cycle.