#160 Emerging Trends in Passive Real Estate Investing in 2023

Hey, everyone. Today we're going to be discussing the latest trends and developments in the real estate market, particularly when it comes to passive real estate investing, and how even when you feel like the deals have dried up, you can still find success as an investor, especially for the long term. So we talk about emerging trends in passive real estate investing in 2023. So stay tuned. Welcome to the Passive Income MD podcast, where we talk about creating your ideal life through multiple streams of income. I'm your host, Peter Kim. If you enjoy hearing about this stuff, make sure to hit subscribe so I can bring it to you every week. Now let's get on with the show. So welcome wherever you're listening, watching to this, wherever you are, between cases, walking your dogs, you know, sitting around the house, whatever it is, we just want to say thank you so much. Like I mentioned, we cross over that 1 million downloads mark when it comes to our podcast. And that's something that we never really thought would ever happen in terms of a milestone. It's not something we're looking forward to. It happened because of you, the listener, because of you sharing with other people for you, subscribing for whatever platform you're on. We just want to thank you again and we want to make sure we bring you value each and every week. So we're going to be talking about some of the trends in real estate investing today. So for those who are not familiar with the concept, passive real estate investing, that's what we're going to be talking about today. It refers to investing in real estate assets or investments without active involvement. When it comes to the management of the property, it means that you're essentially investing in other people's deals. Now, this industry is constantly evolving. It's something obviously that's been going on ever since there's been real estate. But it's something that as a community, I feel like we can take advantage of what's going on in today's market if we can understand it, put the fear aside and look for opportunities. Hey everyone. I'm excited to tell you about PIMDCON, the Physician Real Estate and Entrepreneurship Conference happening on September 21st through 23rd. This year, as always, we're bringing together some of the smartest minds in real estate investing and entrepreneurship to speak at this event. Now, what sets this conference apart from others goes way beyond the speakers. It's being part of the community that's created at our live events. Now, this year, we're offering specific tracks focus on real estate investing or entrepreneurship acceleration, so you can customize your experience and focus on what matters to you the most. Now, our expert speakers, coaches and workshops, they're going to help you gain the knowledge and confidence you need to take your next steps forward and towards achieving financial success and independence way beyond medicine. And it's not just about the information you're going to learn from the speakers. It's about the conversations you'll have with other attendees that I know will spark new ideas, inspire you to take action. So every year people leave PIM Nikon and they launch their real estate investing careers while others grow their portfolio in exponential ways. I mean, ways you wouldn't have even imagined. Now this year is going to be no different as you leverage your big ideas to expand your vision for what's possible. So join us in person in Los Angeles on September 21st through 23rd. There's also a virtual option available for those who can't come live. So don't miss out on this opportunity to connect with a community of like minded individuals and gain practical skills and knowledge to help you achieve your financial goals. Save that date September 21st to 23rd, 2023. I'll see you there. Thanks everyone. Bye. So let's talk about a few key points when it comes to passive real estate investing and the trends today. Number one, in today's market, people are looking in terms of a long term approach. The last couple years of short term gains, a lot of that is gone. Now with interest rates being what they're at, with the market being where they're at, being able to get in and get out again, people took advantage of that over the last seven, 10 years. But in today's market, that's not what people are looking to do. I mean, everything is cyclical. So whatever happened before will happen again. But whenever it's happening now, it happened maybe 10, 15 years ago. So again, while it might be tempting to try to look for some quick profits, if anybody's promising that right now, it's probably almost a too good to be true situation. Having that long term perspective and investing in assets that are going to yield steady returns, hopefully some big cash for you over, over time, that's what you should be looking for. Now we've seen some asset classes that are in trouble. Office space right now, you're hearing about it all over the place, especially in these major metropolitan areas. They're at steep discounts, but still nobody, nobody is buying them. People are looking to see whether they can reposition these properties, these office spaces, into more residential or other experiential commercial, but Even then, people are having a hard time selling these properties mainly because people are working from home. I mean, who wants an office space? And most people want to work from home, right? However, in the multifamily space, in the apartment space, market factors are actually pretty good. I mean housing, because of interest rates being high, it's unaffordable. People are not able to buy homes. Young people, millennials are still moving into urban areas. That's where all the fun stuff is happening, where all the jobs are where people want to be, they want to congregate. Those are wins at the back of multifamily. And so those are looking great. So look for these kind of economic demographic factors when it comes to looking at different types of investments. What I would tell you is when you're getting into some of these passive real estate investments for from where we're at in the market today, expect to be in at least on the longer end of these ranges. When they promise you ranges from three to seven years. Expect that five to seven year range. Look for the returns. Make sure that your money because it's not liquid, meaning that once you make the investment, you're probably on for the ride the entire duration. Make sure that that's an investment that makes sense for you considering your portfolio. Think about the long term. Hey everyone wanted to tell you about FlipMD. It's a competitive marketplace where physicians can source and secure consulting side gigs. Jobs come from a broad range of clients across all major industries who are looking for medical experts in their field like you and me. Now FlipMD allows physicians to pick and choose the consulting work that fits their schedule and their interests so you can continue to provide quality patient care while exploring new opportunities. And here's the coolest part. You get to set the parameters for your work, including an hourly rate. So join the thousands of physicians who are diversifying their income streams and expanding their careers with FlipMD. With FlipMD you can pick up consulting work whenever you're available, try out a non clinical career, or even do something completely outside of the realm of patient care. It's a centralized source of well paying side gigs that will help you build your physician brand. Join now and see why new physicians are joining every day. Visit flip md.com again. That's flip-md.com now back to our show. Next, make sure that your mindset during this time is cautiously optimistic. That also means to be somewhat opportunistic. You're going to hear about deals and still they're going to sound great. But you want to be cautious you want to do your due diligence more than ever before. You want to be able to navigate the ups and downs, whatever the market's at right now, be able to make informed investment decisions and keep that stance right, of being cautiously optimistic. And at the same time, you want to be opportunistic. What that means is that you want to look for opportunities out there because they're going to present themselves over the next six to 18 months. I'm starting to see some of that today. You're starting to see price drops. You're starting to see reductions where it wouldn't have happened before. You're seeing sometimes in the order of 10, 20, even 30%, a good number of commercial loans, whether it's office, even multifamily. A lot of them are coming due before 2025. And so what's going to happen during that time? Credit is starting to slowly dry up. So a lot of these deals, they're worried about whether they'll be able to refinance or not. If the deals aren't operating well from a number standpoint, a lot of these properties will need to sell at a loss and hopefully the bank doesn't have to take them over. But if you start seeing a lot of these in the marketplace, you start hearing a lot of this news, know that prices are dropping and that's probably an opportunity to be opportunistic, to find good chances to get into deals at what's called a great basis that means a great price to get it. Well, you've probably heard about real estate, well that great saying that says you make money when you buy. Now that's more relevant to this time more than ever before. I've stayed cautiously optimistic, meaning that I'm still looking at deals. I'm looking for opportunities where there is a story behind it, meaning that the property maybe was at higher price. So there's been a discount now that it's distressed in a way that there are reasons why the seller needs to sell. Now I'm looking for these opportunities and more and more of them are coming on the market and as we speak, and I know I've said this again and again, but many of you have been waiting for the bottom to ride that big wave. Well, we're coming up on that time right now, so make sure you're ready to go and strike when the opportunity presents itself. Hey everyone, I want to share a super exciting announcement. We have a brand new deal that just opened up with Ascent Equity Group, which I'm a co founder at. Now this is a multifamily syndication deal called the Encanto. And I think it's perfect for this exact market. It's a Class A, A location in Goodyear, Arizona, where properties are booming. Now we have another investment in that region that's doing extremely well. Now, you might be stressed about inflation, interest rates and recession and wonder if now is the right time. So I highly encourage you to go to ascentequitygroup.com deal so you can see why this is a diamond in the rough deal that you don't want to miss. Get all the information@ascentequitygroup.com deal again, that's Ascent A S C E n t equity group.com steel. All right. Now let's get back to the show. Okay. Another trend that we're noticing this year is that urban demographics and what's happening in the urban landscape, A lot of that is currently changing. As passive investors, as smart, savvy members of this community, we want to stay ahead of that curve. We've all heard about baby boomers and the aging population. Well, that's going to present a ton of opportunities for you and me. Maybe that's in the senior living space. Maybe that's the way the cities are made up and people, in terms of younger people are moving into the city. Maybe that creates some opportunities. The baby boomers are going to be retiring. Where are they going to live? Where are the demographic trends heading? Where are certain areas where they like to live? Maybe it's Florida, maybe it's somewhere like Arizona where the weather's different, where people want to live in those areas. That's going to lead to significant investments in that area. And also it's going to lead to opportunities for you to jump in with some people who are doing deals in that area, especially that cater to that population, whether it's the younger millennial generation or whether it's the older baby boomer retirement generation. And this is a little note actually with baby boomer generation is that all of those businesses that they own, they've had a hard time selling them off. They're going to have to sell them off because they're going to be into, they're going to go into retirement. So just so you know, there's going to be a massive influx of opportunities for businesses to be sold and for us to buy them at a significant discount if that's something you're looking for. Again, I know that's not real estate, but it's just a point that I wanted to make, especially because we're talking about aging demographics. All right, all right. Here's another trend that's happening all across the country now that people are able to live wherever they want to live, work, remote, have a different quality of life. I think that people, especially coming out of the pandemic, people are looking for that quality of life. I know I am. I think you are too. So certain areas that provide that where the cost of living is reasonable and also provides all the great amenities of living in a bigger city. A lot of those areas are still seeing rent increases during the during this time, especially if there's a strong job market and that's going to be attractive to both renters and buyers. Some of these top ranked real estate markets include places like Nashville, Dallas, Fort Worth area, Atlanta, Raleigh, Phoenix, Charlotte, even Miami. Some of these areas are still seen as growth areas over time. Again, we're looking long term here. We're not looking for the short term, we're looking for long term places to invest. When we look to invest in passive real estate, we looking for ultimately cash flow that you know, these deals will come, they'll sell and then you'll be able to roll into the next deal. But we're looking for that cash flow for long term to replace our income, to provide that passive income for us so that we can live and spend that money however we want to live, however we want. Ultimately looking for that passive income to be able to replace our income to joy, to allow us to spend that money however we want without having to put all that time and energy in. We've already put the time and energy in working in our day jobs. We want to follow that into more passive income streams. Also things that we're looking at right now and seeing in the market is trending towards longer term debt. Now what that means is that people are getting leverage right now when they're getting taking loans for real estate properties. They're looking for the long term. I think that's what people are looking for, a little bit more security than the short term floating rates. So note that when you're going to be an investment right now, you're probably going to see some of those longer term loan rates that provide some security in terms of what the rent going to be and hopefully that creates cash flow off the bat. But again, for investors like you and me, that might provide some sort of security that you know that this investment is set up for the long term. Again, think long term right now, think five, seven and 10 years. Not those quick turnaround flicks, fix and flips. Obviously real Estate prices are notoriously difficult to predict. And also interest rates, no one predicted what happened with interest rates. They knew it would go up, but nowhere in any underwriting models did anybody suspect that it would go up 5 percentage points. Right? But investing in quality assets, no matter the case, if you buy it at the right price and you buy it with good debt in terms of good loans, you can weather any sort of fluctuations over time. And that's what we're looking for, those types of deals. So what do I believe? I believe that real estate investing, it's a real estate class that has sustained ups and downs. Now it doesn't always go up and down with the stock market. It's known that not necessarily correlate. Now it's happened in 2008. They correlated very well because that crash was due to the real estate market. But I think that in today's world, you can prepare for a season of sustained growth in the future. You can prepare yourself for what's going to happen over the next 16, 18 months, where you're going to see prices dip and opportunities present themselves. It requires some level of patience, careful planning, putting your capital together, educating yourself, forming a community or being part of communities of people talking about this so that you can stay informed about the latest trends and developments in the industry. If that becomes the case, you can set yourselves up to ride this next wave again. We only get one or two of these in our lifetime, I believe, where we can take advantage of a really big real estate or investment wave so we can really create the generational wealth for ourselves that not only give us freedom from our day jobs, but also help set up our lives so that we can live however we want. Now if you want to learn more about real estate investing, other financial topics, even how to create new businesses, I wanna let you know our conference is coming up. It's coming up in September 21st through 23rd. We've already had a ton of people sign up because it's now active. If you go to pimdcon.com you're gonna learn about this conference. We're gonna be packing with expert speakers, mastermind sessions, coaching, networking opportunities that can really help you level up your game when it comes to finances, both when it comes to real estate investing, your passive real estate, passive income game, as well as even building businesses and entrepreneurship. I'm really excited about the timing of this year's conference. It's going to be happening when so much is going around in the world and so it helps to surround yourself with other like minded people learn from others and put yourselves and create an actionable plan to set yourselves up for the future. So if you want to learn more about it, Visit our website pimdcon.com and see you there. Enjoy the show. Let me know by dropping a review in the podcast app you're listening to us in. And if you haven't already, make sure to hit subscribe. Are you a part of our community yet? Join thousands of physicians who are also on this journey to creating their ideal lives through multiple streams of income. You can join us on our Facebook group Passive Income Docs, and you can always learn more at our website passiveincomemd.com thanks again for allowing me to be a part of your journey. See you next time.