But in the commercial world, we haven’t had that big run up yet but you’ve seen rents rise the first half of 2021. It’s obvious what’s happening in cap rates are dropping. You’re having cap rate compression.
Try to rent them out.
And do you see the fluctuation or the opportunities to tailing off or increasing? What do you see as far as the market conditions?
Right now the getting’s good, right? Because in the residential market has gotten really overheated in my opinion because of low supply. I think demand has even gotten lower, but because supply has dropped so much, that’s what dictates the prices.
Which is very emotional driven and that’s why I don’t like residential properties. But in the commercial world, we haven’t had that big run-up yet, but you’ve seen rents rise the first half of 2021. It’s all completely obvious what’s happening. And cap rates are dropping. You have a cap rate compression, but it’s not to a place where your average internet investors like jumping into commercial properties quite yet.
Maybe this time next year, for sure. There always be deals because what makes for investment banks lend money at X and the cap rates are Y and there’s always a difference between X minus Y. There will always be a differential or always be a difference in then you apply leverage and that’s how you make yield.
Your big cap rates will always be making yielding more than interest rates. In a world where gravity works. I’m sure it could go backwards for a little bit. I don’t think it ever has, but that’s what makes the world run. I think what you’re getting to is like, “Hey, what if I wait”. If you wait the best time to do anything was yesterday, they always change.
Like for example, infinite banking, they always change the rules. Best time was yesterday, best time to buy another one was yesterday. It’s just constantly going to be that. You guys are just like making it tough for your guys. Just be prudent, stoic, and just constantly dollar cost average into stuff that makes sense.
And it’s difficult now because you’re getting started. But to me, that’s the outlook that you have. You don’t need to be like me and have a hundred percent of my stuff in alternative investments. That’s for sure. I totally respect if you want 20 to 50% into paper assets, that’s fine. But over time, the kind of the percentage definitely goes to the alternative assets size and look at, I seen as group tiger, 21, it’s all $10 million families and above all paper assets.
They don’t own like mutual funds and stuff like that.
I do think that we’ll always try to be conventional in some manner from our perspective, but I have a job to do and just convince my spouse that this is legit. And try to jump into one of these more conventional deals you do.
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