How would you advise investors who have like burned their fingers and lost like post-COVID era in
the real estate investments, how to again gain confidence and step in back and again start
deploying capital and especially in the commercial real estate. So how to get confidence in real
estate again? Yeah. Okay.
I'm going to let you guys go first. Find the best operators first and then go from there.
That would be my number one suggestion is find people who actually live and breathe the real estate
stuff. They understand the income and the expense side. I think a lot of almost all the problems
that you guys had mentioned that were with banks. Everyone's hurting on the expense side. The
reason why I'm saying we're not seeing blood in the streets is because the income side is still
pretty good. People are still paying their rents. I think we'll see the real blood in the streets
in about a year or so when these high gas prices really impact people's ability to pay their rents.
And that's when we're going to, to me, I think it's still early. But as Rich pointed out, some
people are getting access to seeing the deals now. I think in a year you might see both sides of
the equation cause a little more consternation.
I would recommend the same where you focus on the operator. And if you're doing real estate on your
own, investing on your own for buying, let's say, a multifamily property, I would localize it.
Where John just said, you want to kick the tires, you want to be close to a property. And I think,
you know, if you look at a pro forma, most investors say, well, we're going to raise rents, right?
You have to be really cognizant of the fact of where you are and can you raise rents,
right? interesting dynamic in the Texas, Arizona,
New Mexico area, specifically, you've had a lot of self-deportations. So that's why you have
massive vacancy. And I think if you look at it from a lens of being very localized,
you will see that raising rents is not enough, really controlling your expenses. If you're working
with an operator, if their whole model is just, we're going to raise rents, it's probably no for
us. so focus on the expenses even more so oh yeah go ahead john i was going to say just just avoid
people that like over promise sometimes like the best amazing promises is just the person's so
amateur they don't know of all the nuances and things that could go wrong and surely some things
will go wrong and not be as expected so i'd avoid that and then if not sure i would just meet in
person and if it's not a heck yes then it's a heck no and basically make sure you know like do they
have extreme focus laser focus or are they in all areas of real estate like if you focus on health
care like what does that mean like dental practices are different than dermatology practices which
is different than health care sas companies which is different than medical devices which is
different than biotech saying you're an expert in health care means you're an expert like in
nothing right so i'll just be wary of people that over promise or that are too generic to spread
thin yeah i think everyone summed it up pretty well the only thing i was going to add is it's it's
really not a matter of having confidence in the market i think it's the deal And as long as you
protect your downside and look for good deals and smart deals, don't try to, at least I speak for
myself, I never try to predict interest rates. They're going to go up, they're going to go down.
The market's going to be good, it's going to be bad.
It's going to happen, right? You are a debt person, so your advice would be different than the rest
of the family. That's exactly why I'm in debt. I mean, Rich knows what I'm going to,
Rich had asked me a question once. I was like, what do you lose sleep over? And what did you say?
I don't lose sleep. I make all my borrowers lose sleep. He's like,
I'm the reason other people lose sleep. That's why I'm at that work. I'm at the right loan to value
with the right sponsor and the right market. The upside always takes care of itself. John also said
at one event that surprised me and stuck with me, as you said, like, I was like, ah, do you take
like an equity kicker? You're like one, two percent equity kicker for like providing them all the
debt they need and maybe a little sharper term. He's like, no, I don't want any conflict of me
being on the equity side versus the debt side. I'm clean on the debt side and I'm doing what's
right for me as the debt holder. I'm not on the equity side at all in that way. And I thought
that's just like an interesting perspective. So maybe maybe considering the debt side would help
you sleep at night. Hi, I'm Richard C. Wilson. Our community has closed over $1 billion of
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