I’m a member of a mastermind called the Collective Inner Circle, a small but mighty group of business owners, entrepreneurs, and investors.
Most of the members own some real estate, but it’s not a real estate-centric group, even though four of the five organizers are primarily known for real estate. I really enjoy this aspect - it breaks me out of the real estate echo chamber, and the discussions we always have around building and growing a business have been incredibly beneficial to me.
We held our second quarterly mastermind of the year in Orlando last weekend. And in addition to hearing what’s top of mind from the organizers (Ken McElroy, Robert Helms, George Gammon, Jason Hartman, and Russell Gray), our group also had the privilege of hearing from:
Robert Kiyosaki (author of Rich Dad Poor Dad)
Joseph Wang (former trader at the New York Fed)
Chris MacIntosh (partner at hedge fund Glenorchy Capital)
Mike Green (portfolio manager and chief strategist at Simplify Asset Management)
So today I want to share some loosely-organized takeaways from our two days of discussions, presentations, and community-building that I believe are relevant to passive investors today.
Multifamily Distress
Ken McElroy: “We’re in the 3rd inning of a 9 inning game.” In other words, we’re not out of the woods yet.
Banks and other lenders are doing the opposite of what you’d expect: they’re working with owners on loans that are very underwater (property is worth far less than the loan balance), but are foreclosing on properties that are barely underwater.
Now is still an excellent time to buy properties when the price is right. The lack of current construction, especially of new multifamily properties, is setting the stage for rental unit shortages in 3-4 years. When these shortages materialize, rents should explode higher.
Chatting with Robert Kiyosaki during a break
Single-Family Homes
The number of houses for sale has increased, but is still well below what’s considered normal. Normal = 1.2M, but we’re only at 500K right now. Even with higher interest rates, this is a supply and demand issue, and the lack of supply will continue to drive home prices higher.
Ken McElroy: there’s “trapped equity” in single-family homes, as current owners don’t want to sell and take on a new, significantly higher interest rate. This is driving the lack of supply, and unless we see a major uptick in unemployment, it’s unlikely to fix itself.
Jason Hartman: “You can’t time the market, you have to be there in advance.” The people who win in investing are those who are in the game and invest, not those sitting around waiting for the “right time.”
Baby Boomer / Retirement Plays
10,000 Baby Boomers are retiring each day, and there’s not enough existing supply of the things they want (or will need) in retirement.
Two specific opportunities that were mentioned multiple times:
Senior housing (of all care levels)
Campgrounds / RV parks
Interest Rates
There was consensus from several folks, including Joseph Wang, George Gammon, and Chris MacIntosh, that while we may see a slight dip in rates over the next 12-18 months, the long-term outlook is still higher for longer.
Be careful of any investment that relies on substantially lower interest rates for its success.
Dinner with Robert Kiyosaki, Ken McElroy, Joesph Wang, and Robert Helms
Energy Shortages & Opportunities
Chris MacIntosh: energy is “the most asymmetrical macro play right now.”
This thesis is relatively simple:
We don't have enough electrical production capacity to meet increasingly growing demands
The US has been the world’s biggest supplier of oil over the last decade but those supplies are dwindling
More oil will be needed, but less of it will be available = energy costs all around are going higher
The growth of AI (and its intense demand for computing power) is deepening the energy supply/demand imbalance
Chris encouraged looking for 2nd- and 3rd-level plays around energy and AI, particularly “picks and shovels” opportunities.
Example: AI requires lots of data centers, which require lots of copper. We’re building data centers faster than we can mine the needed copper. This shortage could send copper prices soaring.
A common theme that emerged here is the importance of investing around the most basic of economic ideas: supply vs. demand. When demand is high and supply is low, prices go higher.
It’s a good reminder that there are opportunities in every type of environment. To paraphrase Wayne Gretzky (and Michael Scott), it’s critical to know where the puck is going and position yourself for it to get there.