Jonathan Cronin argues election uncertainty is creating real estate opportunities. He recommends chasing larger deals with forced appreciation through operational improvements, and shares an 88-unit apartment that gained $2M in value in 12 months from modest changes. Focus on cash flow from day one and use creative financing to buy distressed properties.
There is a massive opportunity in real estate investing right now in the midst of an election season. I want to talk to you about the main things you need to be looking for and what to do. I'm in an apartment complex right now. I'm going to break down a few things of how it's playing out in today's market in this season and probably share a couple other ones as well. But there's a few things you need to know. One is in the midst of economic uncertainty, which is what is happening right now. First off, some of the most money has been made in an economy in such a situation. But in the midst of economic uncertainty, fear is heightened. People are making moves based on fear, people are hiding, people are selling, people are doing things based on fear. Now some people are doing the opposite, right? Their valuations are down, they're fearful, they're holding on to their properties, doing all kind of stuff. So I want to talk to you about how to combat those things and how to actually make a lot of money if you do it right, if you have the right strategies. A few things to keep in mind. You know, Warren Buffett said, if you were to guarantee me a recession would take place in the next year, the next few months, whatever, I would still continue buying and selling the same securities. I am now investing in the same assets. I am now. What's he saying? He's saying if you know what you're doing, invest in the right things, they should be able to withstand a downturn. Three things you need to know about the types of assets you should be looking at. Because no matter what the market is, there is massive opportunity. So first off, you need to be looking for bigger deal. You need to be looking for things that, that have decreased downsides and increased upsides. Like this. This is an apartment complex, is an 88 unit apartment complex. Bought it $200 a month under market rents at the time we bought it, which was exactly 12 months ago. And then just recently we got a offer in that put us at $2 million more than what we bought it for. And we didn't put barely anything in it for Capex. We just changed out property management, we just changed out a few key people and put better systems in place. So that just happened just a few weeks ago. So that's happening in today's market and in the volatility of today's market. Second thing, and I'm going to break down another deal as well. You need to be looking for forced appreciation. Do not rely on speculation in today's Market. Do not rely on just market valuation increasing based on the market. Rely on something that is proven right. There's a property, there's several properties down the street that are getting better market rents and there's nothing different about the amenities. So in other words, we're not speculating. We know we can come in and increase the rents if we improve the value to the tenants. Obviously, we're not advocating to just increase rents just because. Right. We want to come in, improve operations, improve the value to the tenant, make them feel like it should go up. We want to add things, we want to do different things. Right. So force appreciation is what we're depending on. We're getting into bigger deals. And number three, we're looking for cash flow In a market that's volatile, in a market that is up and down, we don't know what's going to happen. It could go one or two ways. We want to be focusing on properties that are already cash flowing and not bleeding from day one. You can do that. If you can do those three things, then you are going to come up and you're going to do extremely well. Just like this property did. Two million doll dollars in 12 months. I would say as well, thinking about going ahead. If you want to make a lot of money in this market, you want to capitalize on the situation we're in, you need to hit the gas on finding properties. Increase lead flow, increase your lead count. One of our mastermind members just locked in an apartment the other day. He's not doing any bank financing. And that's the fourth bonus point I'll give you. Valuations are down or people are scared. Fourth bonus point. Get creative, okay? Get around people doing creative things. He is not using any bank financ. He's using investors and giving them a 6% preferred return and then giving them 30% equity ownership. There's so many different things. So then basically he benefits from the lower interest or the lower press on the front end. Then whenever it refinances, his investors trucks are getting 18, 20, 30% annualized returns. So talking about opportunity, guys, this is the vehicle you need to get in. Let's hit the gas. Go after just increasing lead flow, get the priorities in order, make sure they're cash flowing, make sure there's forced appreciation that's very, very evident. And then start getting around the right people. So I hope that helps. Let's get out there and knock out some deal. God bless. We'll see you soon.
