Jennifer (00:00:01) - Welcome to episode six of season 17 of The Growing Empire Show. Today we're going to talk about additional emerging trends for 2024, specifically interest rate environment inflation and the impact of the overall upcoming election. So make sure you stay tuned.

Speaker (00:00:20) - Welcome to Growing Empires, hosted by real estate entrepreneur and trusted investment advisor Jennifer DeJesus. Growing empires provides insight to building wealth through passive income, producing real estate investments for those who want to build and manage a more profitable real estate portfolio.

Jennifer (00:00:40) - Welcome back to the Growing Empires podcast, your ultimate destination for real estate investing insights. In today's extended episode, we're going to dive deep into the factors shaping real estate investing in 2024. From interest rates and inflation to the impact of the election and the importance of hedge funds and syndication investing. We'll cover it all to help you navigate the opportunities and challenges ahead. Let's start with interest rates. In 2024, interest rates are expected to remain a key driver of real estate investment decisions. The Federal Reserve's monetary policy, including decisions on interest rate hikes or cuts, will have a direct impact on borrowing costs for investors as interest rates rise.

Jennifer (00:01:25) - The cost of financing real estate acquisitions and development projects increases, potentially dampening investment activities. So what should investors do in response to the changing interest rates? First, it's important to closely monitor interest rate trends and adjust investment strategies accordingly. For example, in a rising interest rate environment, investors may prioritize properties with stable cash flows. And low leverage to minimize exposure to the interest rate risk. Additionally, exploring fixed rate financing options or locking in for a longer term financing can provide stability and predictability in uncertain times. Now let's talk about the impact of the upcoming election on real estate investing. In an election year, political uncertainty and policy changes can influence investor sentiment and market dynamics. Factors such as tax policies, regulatory reforms, and government spending initiatives can shape investment decisions and market trends. With the 2024 election on the horizon, investors should pay close attention to the candidates platforms and propose policies that could impact the real estate sector. By staying informed and anticipating potential changes, investors can position themselves to adapt and capitalize on emerging opportunities.

Jennifer (00:02:55) - Inflation has its implications for real estate investing, as well as inflation, or the rise in prices of goods and services over time can have both positive and negative effects on real estate market. While inflation erodes the purchasing power of money, it can also increase the value of tangible assets like real estate serving as a hedge against inflation. So in 2024, investors should be mindful of inflationary pressures and consider strategies to protect and grow their wealth. Real estate investments, particularly income producing properties, can provide a reliable source of passive income and potential appreciation and value, helping investors preserve their purchasing power in these inflationary environment. So what should you be doing this year specifically to scale your portfolio and take advantage of the opportunities that will be presenting themselves in 2024? I think first, it's essential to conduct a thorough market research and analysis to identify emerging trends and investment opportunities. And if you are not a savvy real estate investor, or maybe you are investing in a market that you're not all too familiar with, and maybe you're exploring a new market.

Jennifer (00:04:09) - But whatever the case is, whether you're exploring new markets, new asset classes or investment strategies or just trying to stay ahead of the curve. The key to success in real estate investing is conducting thorough market research and making sure that you are investing not only in the right asset class, but in the right location, an area so that you can build wealth. Secondly, investors should always be focusing on diversifying their portfolio to mitigate risks and capture new growth opportunities. This can be done in a variety of ways. And one of those ways is exploring that alternative asset class such as data centers, health care facilities, renewable energy products, as well as diversifying geographically to reduce exposure to regional market fluctuations. There are so many opportunities out there to diversify, not just in the asset class or location, but also in the size and type of property that you're investing in, as well as the class of property. So if you're a typical investor that will invest in C class properties, maybe you want to take on a couple of B class properties as well.

Jennifer (00:05:24) - Something that's a little bit more stable from a cash flow perspective and demands a different type of tenancy. With any alternative asset class that you might be involved in. Again, research is going to be the key to make sure that diversifying in those asset classes makes the most sense to reduce your exposure, but also give you the ability to diversify and be successful. Third, investors should consider leveraging the expertise and resources of hedge funds and syndication investing to access larger deals and achieve that economies of scale that's so critically important. Hedge funds can definitely provide access to institutional quality investments and sophisticated strategies, while Syndications allow investors to pool capital and share risks and rewards with other investors. Let me break down the difference of those in why hedge funds and syndications are such a great alternative to owning the assets outright. As with any type of asset, there are some risks associated with ownership. What I can tell you is that real estate investments far outweigh the returns on investments that you find in any other type of investment, including stocks, bonds, mutual funds, 401 KS, etc..

Jennifer (00:06:46) - But to be successful in real estate investing, especially if you're owning the assets. The key really is to making sure that you build your own team. So if you're the type of investor that intended to be passive and you have not yet built your team, the chances of you being successful in any market, even if it's in your backyard, are very, very slim. What I mean by building your team is you need to have your attorney, your accountant, your property manager, your vendors or service providers to the properties. And then you need to make sure that you are really utilizing real estate brokers or real estate agents that have that expertise or that market insight to steer you in the right direction. In addition, you want to make sure that your insurance and the way that you set up the properties, whether it be via an LLC or not, makes sense for your type of investing strategy. The biggest risk to any investor. I think when it comes to owning the assets outright is not necessarily the potential trip and fall on your property, which is what most investors think, but it's the inability to keep your property rented.

Jennifer (00:08:05) - Know what you should and should not do as far as improvements to the property, getting service providers to your property to adequately maintain the property, and understanding what your competition is in the market and what the market will bear. As far as rent and expenses, specifically those that you can turn over to tenant.

Speaker (00:08:32) - The episode will continue in just a moment.

Jennifer (00:08:35) - As an investor, we know it's important to stay on top of market trends and real estate opportunities that add value to your portfolio. We also know that having a trusted source of reliable information to help you stay a step ahead of other investors is critical to your success. If you're interested in having these types of resources as well as access to me and my team, I invite you to join the Empire Investment Club, a free service that gives you an easier way to make sense of today's and tomorrow's real estate opportunities. As a member of the Empire Investment Club, you'll get access to relevant resources and investment focused experiences such as live interactive webinars, market trend presentations, and investor socials designed to equip you with what you need to succeed.

Jennifer (00:09:15) - So whether you're an active investor, passive investor, a combination of both, or just starting out, the club is where you'll get what you need to build a portfolio you love. To join, just head over to Jennifer DeJesus. Com sign up and we'll see you in the club where everyone's on a journey to becoming a better investor. Another key direction to diversification is to really place your money in other types of asset classes. Understanding and having insight into that market specific dynamics will help you really determine if investing in multiple asset classes is right for you. And then there's the popular syndication and hedge fund method. Although these are truly passive investment opportunities for any investor, the reality is, is that any time you have an opportunity to pull your money with other sophisticated and experienced investors, your capital can grow exponentially, providing a really great opportunity for you to scale your portfolio. In a syndication, you are typically investing in 1 or 2 larger properties, and you will generally know the type of property that you're investing in before you actually invest your capital.

Jennifer (00:10:36) - So what I mean by that is typically syndicators are raising money per deal. So they've already identified the deal prior to them actually raising the capital. Therefore, it is likely that they will give you a deck sheet or a deal sheet that will discuss in detail the asset they're going after, what their intended plan is for that asset, what kind of improvements they're trying to make, what rents will go from where they are to what market rates are going to be. Essentially what is their entire hold period? How much do you need to invest, and what are going to be the strategies to make sure that appreciation and your money or capital gets returned, and a specific timeline. With that, you can get really comfortable with the type of asset class that they're investing in. You'll have a chance to get to know a little bit more about the partners of the people that are involved, that are controlling your money. And as I had mentioned before, this is an opportunity for you to pull your money with other like minded individuals and typically very seasoned or sophisticated investors that also are doing the same thing.

Jennifer (00:11:45) - And because of the size of the syndication, you typically have a really generous return on investment. That makes it a very intriguing opportunity. Hedge funds as well. Similar to the syndication method. Are definitely on the list of emerging trends and opportunities for 2024. The trick with any syndication or hedge fund is finding the right one that makes you feel comfortable, but also that has the best likelihood of returning your capital. The major difference in a hedge fund is that hedge funds are typically pulling money together, as in the syndication from sophisticated, experienced investors. Those pools tend to get very large. They can be on the upwards of $5 million, all the way up to 50 or $100 million. And that capital raise, then with some leverage, grows exponentially. So, for example, a $5 million or $6 million capital raise could yield assets in the 40 to $50 million before the fund is all said and done in a hedge fund, you typically do not get the opportunity to invest in specific properties, and you may not know the types of properties or the specific properties that will be invested in, because in the hedge fund, they typically are collecting the money or raising the capital ahead of the investment strategies.

Jennifer (00:13:09) - However, in hedge funds, you likely have a much clearer expectation of the performers in this in the hedge fund, meaning that you typically will get to know all the operators. They typically will have a history that they can talk about doing similar types of investment strategies and their success stories behind them. And typically, the hedge fund will also be able to identify the very specific asset classes that they're investing in. So as we're coming out of a couple of years of inflationary periods, high interest rates in most areas where investors were on pause to actually invest their money, I'm going to encourage you to push forward and push through. I really do expect that the later part of 2024 and into 2025 will yield some of the best opportunities that we've seen for the last couple of years, specifically in the way of syndications and hedge funds. These operators make it their mission to be informed and adapt to market changes. They're experts in their craft, and they typically are the ones that seize the opportunities for the most incredible deals in any given marketplace.

Jennifer (00:14:35) - 2024 presents a wealth of opportunities, and like any market, there are challenges for real estate investors. But staying informed, adapting and being strategic in your approach, you'll be able to scale your portfolio and seize the opportunities that lie ahead. When you surround yourself with like minded professionals, investor networking groups and build your team of seasoned professionals monitoring things like interest rates and inflation to navigating political and economic uncertainties, proactive investors can position themselves for success in the ever evolving world of real estate. I hope you enjoyed today's episode. Thank you for tuning in and remember to subscribe for more insights and strategies to help you thrive in real estate investing. And until next time, take care!

Speaker (00:15:28) - For more information about how Jennifer can help you plan, develop and manage a strong real estate investment portfolio, visit Growing empires.com.