Speaker 1 (00:00:01) - Welcome to episode nine of season 16 of The Growing Empire Show. Today we're going to talk about what you experienced in season 16 and what to expect for season 17. So make sure you stay tuned.

Speaker 2 (00:00:16) - 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.

Speaker 1 (00:00:36) - So season 16 was all about investing in the new market. And what we mean by the new market is, you know, we're in a pivotal time of change. Covid and inflation and economic changes made real estate investing in 2023 rather difficult. We fell victim to high interest rates and increasing property values. There was significant demand, multiple offers and a very low inventory or supply. All of these metrics make for a really bad investing environment. So for investors that were successful at buying investment properties in 2023, you likely paid far more dollars per door than you would have in any other year.

Speaker 1 (00:01:28) - Now, that doesn't always necessarily mean that you made a bad investment or a bad choice. It just means that the economics and the financials were different. Hopefully you made some changes in your analysis during these investing times, meaning that maybe you bought a different quality of property than you're used to. Maybe it was more stabilized, or maybe it was more distressed, allowing you to profit in a different area than you would have before. As interest rates inflate, it's also important to look at different types of lending opportunities or lending solutions that allow you to have a different metric for your hold period for the investment. So, for example, instead of putting the typical minimum down maybe 20% on a commercial loan, maybe this time you put 30 or 40% down, which allowed you to still cash flow at a relatively positive rate versus stretching your money so thin. And with that higher interest rate, your actual cash flow being on the verge of negative. But whatever your choice was to invest in 2023, I hope you really got to a point where you are looking at the market a little bit differently than you had in the past.

Speaker 1 (00:02:42) - You'll hear me say over and over again that there is no market that is terrible for investing. All markets have good opportunities in them. You just have to know where to find them. Part of knowing where to find the investment or the opportunity is making sure that you have the right team around you. You have to be able to source deals in different ways than you've ever sourced them before. But more importantly, you have to know what to expect during these pivotal times of change and how to adjust your strategy so that you can monopolize on the opportunities that still exist in any marketplace. Some investors took to other states, other markets, other opportunities, while some stayed home in the Lehigh Valley and did find success. What I'm going to tell you now, though, is something that I want you to pay very close attention to, and you are going to hear me repeat it throughout 2024. If you had your investment game on pause because you didn't like the interest rate environment or the metrics that were being dealt in 2023, I need you to sharpen your pencil, and I need you to get ready for a 2024.

Speaker 1 (00:03:48) - 2024 is going to be unlike any other year. More inventory will become available. There will be more distressed assets in the marketplace. You will be able to buy investment properties, but you're going to need to buy them fast, and you're going to need to find these deals quicker than anybody else. The reason that I say 2024 is going to be a great metric is you're still buying properties at discounted rates from what they were a year ago or even two years ago. Not only that, the rents have increased, so the offset in the gap between what you're paying for and what you're renting the properties for is significant enough to create cash flow for your investment property. Another thing to note is that there's a lot of product available in the marketplace. Now to answer the challenges with those higher interest rate environment, there's different types of loans. You actually heard me talk with Gary Masters this season regarding DSR loans or debt service coverage loans, and the opportunity that they present for investors in this particular marketplace. They give you other opportunities to expand your investment horizons, but also get a different loan term that allows you to still maintain that cash flow that you were used to in the past.

Speaker 1 (00:05:02) - In addition to that, 2024 is going to bring a lot of properties to the market simply because five years ago when people were investing, they were buying fixed rate assets for five years. All of those loans over the 2024 and 2025 are going to come due. And in the current interest rate environment, they could be almost double what somebody was locked in for for that five year term. That's going to force people to sell. So I do need you to get ready. I need you to sharpen that pencil. And I need you to be able to react. You know, Warren Buffett said, a very smart man, actually. Warren Buffett said you cannot time the bottom. There's no such thing as a true bottom of the market. Buy out a 20% discount and keep buying. Well guess what, folks? 2024 is going to be that opportunity for you. So I want you to take the words of advice from a very smart man, very wealthy man. And I want you to also take my advice and telling you that you need to be primed and ready to go, because it is going to be time to start investing again.

Speaker 1 (00:06:08) - And we're not going to focus on what was in the past or what happened ten years ago or even five years ago. Those times are gone and this is a different environment, a different climate, but it also means that you're going to buy and you're going to still buy great deals. And they could be just as great as they were 5 or 10 years ago. However, they're going to look a little different. The metrics are going to be a little bit different. You're going to be a little bit tighter in your financial analysis, but you're still going to find great deals. And as long as you have the right guidance and the right team behind you, you will be successful and you will find opportunity in 2024, you'll want to be prepared. You're going to want to get your cash liquid. If you've got 401 K's or IRAs, self-directed IRAs, or your money in stocks or other real estate, long term lines of credit or equity build up in properties, you're going to want to figure out how you're going to take that cash and get it liquid so that you can go buy.

Speaker 1 (00:07:00) - You're only going to have a short window between 2024 and 2025 to actually capitalize on some of the debts that are coming due in the marketplace. And again, if you want to be poised to not be competing against other investors doing the same thing, you want to make sure that you are liquid and able to move on a property as quickly as those opportunities come in front of you. So how do you get good at this, and how do you know when it's the right deal? Well, the first thing that you need to do is make sure that you are surrounding yourself by like minded individuals, but also people that are doing it every single day. They know where the deals are. They know where the winds are. So how do you keep yourself educated? Well, number one, go to networking events. Your network is going to be your resource for future deals, future opportunities and success in real estate investing. If you have not already signed up for the Empire Investment Club, I urge you to do so.

Speaker 1 (00:07:53) - The Empire Investment Club is a free service to any investor, brand new or very seasoned, and we've got plenty of content for everybody. As a member of the Empire Investment Club, you will have opportunity to get advisor guide articles or blog posts that we do weekly. You'll have access to all of our podcasts that we produce. You'll have access to me if you have questions. I want to talk about different investment strategies or what may work. You'll be able to use our resource library for vendors and connections that will help you be successful in any environment that you want to invest in. And you'll also get access to all of our networking events that we host in person in our Allentown office. As a matter of fact, we've got one coming up tomorrow, and we're going to talk a little bit more about asset protection and the different types of creative financing they're available in today's market, and how to tap into those opportunities. If you haven't had an opportunity to attend one of our live events, I do encourage you to check out our website.

Speaker 1 (00:08:59) - Or you can also check us out on meetup.com. And that would be meetup.com, backslash, Empire Investment Club. And from there you'll be able to connect yourself with the right team and the right opportunities to allow your investing journey to take flight.

Speaker 2 (00:09:17) - The episode will continue in just a moment.

Speaker 3 (00:09:21) - 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.

Speaker 3 (00:10:01) - 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.

Speaker 1 (00:10:19) - Last but not least, I'm gonna encourage you to reach out to us and talk more about the Empire Capital Fund. We've been having great successes buying deals at far below market values, and we also do give our investors a first right of refusal for any off market deals that we source that the fund is not able to purchase at the time of sourcing. This is a great opportunity for those of you that want to not only hold the assets, but also want to have that passive investment vehicle. The Empire Capital Fund is in its third deal. We are typically buying properties at far below market value. We buy from estate sales, foreclosures, sheriff sales, tax sales, all different things that we have sourced over the years.

Speaker 1 (00:11:05) - These are not things that are on market. They are strictly off market and therefore we are not competing with our own investors. I do believe strongly that you want to not only own some assets yourself, but you do want to be invested in things like hedge funds and syndications because they allow your capital to really work for you without you having to really think about it. Not to mention, you are invested in a much greater value in real estate than you probably could do on your own. As an example, the Empire Capital Fund has an initial $6 million raise. With creative financing. It will be roughly around a $40 million fund, and we have an additional $10 million of assets coming into the fund that will be ground up development projects. So again, if you've got, say, $60,000 sitting around that you haven't been able to place and it's just sitting in a bank account, definitely not making you the right kind of interest or return on your investment. I encourage you to have a conversation with me to see how we can put that $60,000 to work, and you'll have that investment in real estate in a safe vehicle that will allow you to have dividends and returns for several years to come.

Speaker 1 (00:12:18) - So season 17. Here's what you can expect. We will have another great season talking to investors that are navigating the market changes, navigating other markets outside of our wheelhouse, outside of the Lehigh Valley, and finding successes in different things like mobile home parks, storage facilities, ground up construction, multifamily. There's a lot of great vehicles to invest in in certain markets are more primed for different varieties of investing. Multifamily is not the only trick in the game. It certainly has proven to be the most lucrative over many years. But other markets have other interesting segments like industrial and storage facilities and things like that that can allow you to make a lot of money. So my belief is that season 17, you're going to have the opportunity to learn a lot about investing in different marketplaces, the different types of deals that are out there, and how you can continue to grow your portfolio and grow your wealth. As always, if you'd like to hear specific topics discussed on our podcast in the future, please feel free to drop me a line and I'll be happy to incorporate your suggestions into future podcasts.

Speaker 1 (00:13:41) - In the meantime, make sure that you sign up for the Empire Investment Club and check out all the resources on our website. You can just go to Jennifer dejesus.com. I truly hope that you've enjoyed all that season 16 had to offer. Definitely looking forward to sharing season 17 with you. And until next time, take care.

Speaker 2 (00:14:02) - For more information about how Jennifer can help you plan, develop and manage a strong real estate investment portfolio, visit Growing empires.com.