First, if you look historically, you can go back to 1974. The markets averaged about 7% real
estate at 12%. You can go back 200 years in the U.S., the U.K., and Australia.
And real estate runs in 18.6-year cycles. And it concurrently has done that over and over.
And I can go back for the last 100 years, show you exact years. They all match up, which means that
going into the end of this year is when we're going to see all of this happening. And this is the
same time similar to the recession. This is when you make real money.
Patriarch I worked for in Colorado, he went from $150 million to $450 million in two years during
the last recession because he's like, look, I can buy a condo in Miami for $200,000.
people are still moving to miami and it's miami right so he did that and then he sold them for
whatever six seven hundred thousand dollars um and so real estate and it's tangible it's not going
anywhere right so now is the time you need to be running toward it not away from it and then the
other thing too is if you are going to give your money one of the best questions i think is um okay
were you around the last recession And if they did work in the last recession or they had a
business, I said, how many properties did you give back? And they'll say one of two things.
None, which is great because they understood how to get through it, right? And you could ask the
same thing about with the 21-22 properties. And if they said they gave, they did give something
back, I said, what did you learn from it? Because you can't replace experience.
Because they've already been through it and they're not going to want to do it again. And, you
know, they probably have quite a bit of their own money in there, too. And so you do have to go
after your experience and the person that you feel good with. But ask them and then also say,
look, what do you plan on selling this at? At what return? What happens if, you know,
you understand cap rates? OK, so if they say we're going to sell it a five cap. So ask them, what
happens if you sell it a six cap? Institutions will always take 20 basis points for every year that
they're considering to hold the asset. So do they still make money?
Smile, please.
Thank you. So ask them, ask them, like, well, what happens if it goes the other way?
Because everybody's like, oh, you buy it a five, sell it a four. Well, what happens if it goes the
other way? right what happens if interest rates go up what's going to happen and if they give you
what the returns are going to be and you're good with it go forward i think psychologically the
hard thing is that we should have slowed down a lot or stopped not now but obviously more near the
top of the cycle and when everything seems horrible you find the best operator who has to operate
at this discounted valuation because everyone's in a bad mood about the industry yeah and that's
when you get the best deals done I think, DJ, you touched on something right at the end. You said
about interest rates. That could really accelerate this in a really bad way for real night.
I don't know what everyone else on the panel thinks about where rates are headed. I think they're
staying only for one reason. Personally, Trump. I think Trump is putting so much pressure for them
to go down that they're just holding. That's my personal opinion. You guys? I mean, I think they'll
go down slightly, but I don't pretend to know the answer, right? Like Howard Marks says he doesn't
ever try to predict the future. He just sticks his head out the window and kind of sees which way
things are swinging a little bit. But I believe in what John said, not trying to predict too much.
Anybody else? I think rates are going to stay for a while in this area because of the persistent
inflation we've had with oil. I think if oil goes down, you'll have an easier way out for the Fed
to lower, but we don't know what's going to happen. Yeah, and you go back to what I was saying.
Now, two years from now, things will start coming back up. And guess what? If you bought today,
you're going to ride that wave going the other way. Hi, I'm Richard C. Wilson. Our community has
closed over $1 billion of transactions. We have over 16 million registered members across 100 plus
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