Hey there, Best Ever Community!

In today’s newsletter, Congress targets institutional investors, real estate scammers lose their edge, and one investor reveals how his condo conversion deal made $600,000 in just nine months. 

Let’s real estate!

_{🗞 NO-FLUFF NEWS}
TOP HEADLINES

🔮 2024 Apartment Forecast: Despite concerns about uncertainties and a potential recession, the 2024 forecast for the rental market shows robust fundamentals for multifamily. CRE Daily explains.

❗️Bold Prediction: A recent report from ING Economics predicts that federal interest rates will likely be cut six times in 2024, thanks to a cooling labor market, easing inflationary pressures, and consumer spending that’s expected to slow.

📉 Industrial Sales Keep Dropping: Despite record-high property values, the number of industrial property sale closings has plummeted 39% from early 2022 peaks, reaching lows not seen since 2012. 

🏠 CRE Pricing ‘May Have Hit Bottom’: Green Street's Commercial Property Price Index decreased by 3% in November and is down 10% YoY and 22% from its March 2022 peak. One researcher says property pricing “may well have hit bottom.”

🏆 Midwest vs. Everybody: In RentCafe’s 2023 Year-End Report, Miami ranked as the nation’s most competitive rental market, but the Midwest — with three cities in the top 5 and 10 of the top 30 — was the real winner.

_{🎙 THE BEST EVER SHOW}
CONGRESS’S ATTACK ON INSTITUTIONAL INVESTORS

This week on the Best Ever Show, Logan Freeman of FTW Investments discusses two proposed pieces of legislation: the End Hedge Fund Control of American Homes Act and the American Neighborhoods Protection Act. The former proposes that hedge funds must sell off all their single-family home assets over a 10-year period, effectively banning them from owning them entirely, while the latter would require corporate owners of more than 75 single-family homes to pay an annual fee of $10,000 per home into a housing trust fund to be used as down payment assistance for families.

Here's a breakdown of Logan’s key points and how these bills might impact real estate investors:

🏠 Potential Impact on the Housing Market: If the bills were to pass, positive effects might include increased housing affordability, stabilized or decreased rental rates, and a potential decline in housing prices. However, there could also be negative consequences, such as reduced access to financing and disruption in the housing supply chain, including a slowdown in new housing construction that could halt the current build–to-rent trend.

👀 Watch Out, Mobile Home Parks: Should these bills gain approval, institutional investors will be pushed toward other asset classes — most likely multifamily and mobile home parks, with the latter feeling the biggest impact. Such an influx of large investors into the mobile home sector could increase property prices and rental rates, further exacerbating the affordability crisis rather than helping it.

🤔 Alternatives and Considerations: Logan suggests that policymakers could consider alternative measures, such as higher taxes or fees on investment properties to discourage speculation and encourage long-term ownership, zoning regulations to limit investment properties, the right of first refusal for local governments or land trusts, and increased funding for affordable housing, which could help address concerns about housing affordability without restricting private investment.

🗝 What It All Means: These Democrat-led bills are unlikely to pass in a Republican-controlled house; however, they (and those that have come before them) are an indication of where Congress's focus is regarding the affordability crisis. So even if these bills don’t pass, future attacks on real estate investors, institutional or otherwise, could be coming down the pike.

👉 Listen to the full episode here.

_{✍️ BEST EVER BLOG}
FROM JOHN CASMON

Falling for a real estate scam is the fear of every novice investor. Many assume that scams only target the elderly and gullible, but the truth is smart, sophisticated investors can fall victim to scams as well.  

The vast majority of people in real estate and other investments are good-natured folks who want to do the right thing. However, a handful of bad apples can ruin the general public’s trust when it comes to investments. Scammers and schemers will always lurk around, but you don’t have to fall prey to their next hustle. Here are some red flags to look for to avoid being scammed.

 🚩 An Unbelievable Offer: Scammers love to entice prospects with unbelievable returns. Profit projections that are beyond market norms should be a clear indication that something is amiss.

 🚩 Guaranteed Returns: If someone is guaranteeing returns on an equity investment — RUN! Equity investments are not guaranteed. They are calculated risks and smart investors minimize those risks as much as possible, but they would never guarantee returns.

🚩 Complex Deal Structure: If you don’t understand the basic structure of the investment, there’s a chance that could be deliberate. You want to understand where you fit in the capital stack, who gets paid when, and options to exit your investment.

👉 Read the full article for more. 

_{🏠 DEAL BREAKDOWN}
CONDO CONVERSION DEAL MAKES $600K IN 9 MONTHS

Isaac Sebbag made over $600,000 on this deal in just nine months. Here's how he did it. 👇

🏢 Property Details: Four-unit building midway through condo conversion construction purchased in Jersey City in September of 2021. 

💸 Finances: Purchase price was $1.5 million with $250,000 in capital raised. $1.35 million loan, plus $200,000 for construction.

💼 Business Plan: Completed condo conversion, added washers and dryers to bathrooms, added HVAC, fully renovated kitchens, and provided direct backyard access for unit one.

🍾 Results: 50% cash-on-cash return in nine months. Sold for a total of $2.57 million. 

If you have a deal you'd like us to feature, share it with us!

_{🌎 BEST EVER CONFERENCE 2024}
MAKE 2024 THE BEST YEAR EVER

We’re all hearing it. Gloom and doom about CRE. But the truth is, there are opportunities for those who are strategic, collaborative, and creative!

And when we all get together for the Best Ever Conference in Salt Lake City in April, that’s our goal — to prepare you to succeed with:

🔮 An overview of the current macroeconomic climate and what to expect in the coming months.

🎤 A jam-packed program with diverse speakers covering the most pressing topics for investors like you.

🤝 Unparalleled networking with CRE heavyweights. Our audience represents over $50 billion in assets under management and $400 million of unplaced capital. 96% of attendees have executed, invested in, or worked at a company that has done at least one commercial deal in the last six months. And countless companies – from Spartan Investment Group to Viking Capital – have been formed at BEC.

👉 Set yourself up for success in 2024 and beyond. Register today using code BESTEVER24 to save 15%.

_{🎓 EXPERT RESOURCES}
FREE DOCUMENT DOWNLOAD

🏆 The Ultimate Success Formula for Finding Deals and Private Money

I attended Tony Robbins’s “Unleash the Power Within” seminar, and one of my biggest takeaways was the Ultimate Success Formula. If you reflect on anything you’ve accomplished in your life, no matter how big or small, I can guarantee you that you followed this formula. 

👉 Download now!

🙏 Thanks for reading!

Let’s keep in touch! If you received this newsletter from another source, feel free to subscribe here. We’re also available on LinkedIn, Instagram, and YouTube.

Have a Best Ever day!

—Joe Fairless