9 Principles of Economic Bubbles

1. All growth is exponential, not linear. Exponential growth always leads to a bubble at some point. 2. All growth is cyclical, not incremental. Over the long term, growth is exponential, but even exponential growth comes in surges and busts. Whenever you have an extreme bubble, you’re going to have an extreme crash. 3. Bubbles … Continued

Commercial Real Estate is crashing

Commercial Real Estate is crashing. You must be aggressively making offers, and not wait for data to show you if Commercial #RealEstate has hit the bottom yet or not. Data comes after the fact of it already happening, not before the fact. During the 2007-2009 recession, #CommercialRealEstate prices bottom out in 1-3 years and took a total of 3-5 … Continued

Multifamily is CRASHING!

Multifamily is crashing!-30M+ permanent job losses-30M+ looming evictions-Jobs won’t recover for years.-NO V SHAPE RECOVERY A year ago, I told multiple multifamily investors, that the economic expansion can not continue and the crash will happen within a few years. THEY ALL LAUGHED AT ME. 😂 I bet they ain’t laughing now. 🤭 Many multifamily investors … Continued

Gold, Bitcoin, and the Dollar are money, not assets.

Gold, Bitcoin and the dollar are money, not assets. Money is the medium of exchange and storage of wealth. Money allows investors to buy and sell assets. An increasing gold and bitcoin price does not mean dollar is not strong. It means for gold and bitcoin, the dollar is losing value towards that type of … Continued

The wealthy buy gold for real money!

The wealthy are buying gold for real money. Ray Dalio loves Gold while Warren Buffett hates Gold. “If you don’t own gold, you know neither history nor economics.”Ray Dalio “(Gold) gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to … Continued

Retail and Hotels are crashing!

Commercial Real Estate is still crashing, specifically Lodging and Retail. The delinquency rate for commercial mortgage-backed security (CMBS) is 9.60%! This is not a surprise since tourism and retail industries were the hardest hit int he current economic recession. The previous recession lasted from December 2007 to June 2009. 10.34% Peak CMBS Delinquency Rate in … Continued

What is the best Commercial Real Estate asset to buy?

Mobile Home Parks! 🤫 The best asset is affordable housing like mobile home parks, multifamily, and long term RV parks. Mobile Home Parks had a great run. 🏃🏽‍♂️ People always need a place to live in! 🛌 This does not mean it is a 100% fail-proof plan. You have to buy at a favorable price. … Continued

The Federal Reserve knows commercial real estate is crashing! 🤧

“Property prices—including on commercial real estate (CRE), farmland, and residential real estate (RRE)—generally take more time to respond to sudden changes in economic activity but appear likely to come under pressure” “Asset prices remain vulnerable to significant declines should the pandemic worsen, the economic fallout prove more adverse, or financial system strains reemerge” “CRE markets … Continued

Commercial Real Estate is crashing!

Commercial Real Estate is crashing! -9.43% loss from March 2020 to April 2020. 😨 Green Street Commercial Property Price Index is a time series of unleveraged U.S. commercial property values that captures the prices at which commercial real estate transactions are currently being negotiated and contracted.🔘Institutional Quality🔘Appraisal-based🔘Value-Weighted Price Index measures the price level of a weighted … Continued

We are in a deflationary crisis!

The United States is in a deflationary crisis, not an inflationary crisis! 🤡 I expect a deflationary crisis to last for 1-4 years. The United States recession started in March 2020. The government is creating 2T+ of FAKE money to prevent a deflationary spiral. The deflationary crisis can not be prevented, but government actions will … Continued

Commercial Real Estate valuations have plummeted!

Commercial Real Estate valuations have plummeted! Many sellers are still in denial. 🙄 Most Commerical Real Estate is valued by the Net Income approach. Valuation = Net Income / Cap Rate ⭕️Net Income is the revenue minus all expenses besides the mortgage. The Net Income of many commercial properties is deteriorating or nonexistent. ⬇️ ⭕️Cap … Continued

Do not ever overpay for assets! (Intrinsic value)

Do not ever overpay for assets! Follow the economic cycle. 🙇🏼 Many successful investors make this mistake while riding the market to the top. Investors fail to correctly read the real value of the asset and expect appreciation. Stocks and Real Estate market values do not continue to appreciate in the short term and depreciate … Continued