While bank economists and other pundits in the news can’t decide on which direction the economy is going, and seem to change their minds daily, the doors are being thrown wide open for opportunistic real estate investors.
Whether manufactured or real, the flip flopping of the economy and forecasts are kicking up enormous clouds of capital, and is creating the opportunity for investors to do a lot of volume, with great prospects for returns. This is exactly the right type of environment for opportunistic real estate investments.
The Crypto Implosion
In the very long term, digital currencies probably have a future as a staple. For now, the sector is being absolutely obliterated.
FTX was just one of the first dominoes. Bloomberg just reported that crypto firm Genesis is preparing for bankruptcy. Crypto exchange Bizlato’s founder was just arrested for $700M in fraud.
Funds and individuals who have participated in this sector just must get out, and get out as fast as possible. The bottom could be far deeper than we are now.
On top of this IRA and 401k balances have plunged due to the stock market. Which means billions more dollars looking for a safer and more profitable home.
The Jobs Are Migrating
Even though many of the largest corporations are contracting, others still have billions of dollars to spend on real estate, and they are.
Since December, Tesla alone has announced two new gigafactories, each with an estimated price tag of $700M to $10B.
Then there are many, many other tech startups you probably haven’t heard of that are willing to spend $100M to $1B on new factories.
This is while offices are being shuttered in old hubs, and even Twitter has been sued for failing to pay its office HQ rent in San Francisco.
Along with these big investments in commercial real estate are moving a substantial percentage of jobs.
When they move, people need housing. Whether apartment rentals or new homes to buy. Some will even get help to relocate by employers. Others will have a hard time selling homes in old work hubs, and must rent in more affordable areas, or where the work is.
Among the many opportunities being opened up by all of these for real estate investors is:
- Acquiring builder closeouts
- Building entire new housing communities
- Buying and repositioning failed condo projects
- Managing self storage for all of these movers
- Repositioning old office buildings, including as mixed use projects
- Operating affordable rental apartments for the long term