Turn The Real Estate Market Crash in 2024 Into Cash

[00:00:00] This week's Listener of the Week is my mom. Mom, thank you for leaving me a five star review. Send me your address and I'll send you a little thank you. But really, for all you listening, leave us a five star review. You might be next week's Listener of the Week. I'm very excited for this episode as we round the corner for Q4.

And we are talking today about turning the real estate market crash of 2024 into cash. I have a client who in the 80s bought a property for 30, 000. This was this old decrepit warehouse in pretty Dang Central Denver that had been foreclosed on. And I believe it was on a whole city block. The bank had to get rid of it.

Nobody had any use for it and this group bought it out of foreclosure. A few years ago, they [00:01:00] sold the building for 12 million dollars to developers. So bought it for 30 grand, sold it for 12 million. Is there anything we might be able to relate this to today? Of course we can. The office doom crash of 2020 forlore.

Right? And all the while, while office seems to be in a free fall, industrial real estate is still booming. So this is a staunch flip from the story I just told you, right? This was a warehouse that in the 80s, office space was the bee's knees, the bell of the ball. Nobody wanted warehouse space and Q2023, you can't give away office space and everybody wants warehouse space.

Who would have thought? So, I didn't make this up. All the great real estate investors talk about this at [00:02:00] Infinitum. The best investments come when you zig when others are zagging. Why? Because how in the world are you going to do as good or better than others if you're following the crowd? That's literally not possible.

You can't get ahead of the crowd if you follow it, right? So industrial real estate investing has been on the up and up for the last five, 10 years. Have you missed it? No. Are you going to see the same upside as the folks who bought it 10 years ago? No way. Everybody knows industrial real estate's the hottest, coolest asset to buy.

But what about office space? Will office space ever come back? Of course not. Eh, we don't know. You see, when you go with the crowd, you're limiting yourself. Right? [00:03:00] I was in a development panel. I wasn't in it. I was listening to it. And there's a gentleman here in town by the name of Mark Shaker. And he, for all intents and purposes, developed what is called the Stanley Marketplace, which has been a really absurdly impressive family centric marketplace in Denver, Aurora.

They absolutely home run this property out of the park. And Mark was one of the speakers in the panel and Mark prior to his real estate development career and the Stanley marketplace had never worked in real estate and something he said that really stood out to me about the project was that he feels like had he worked in real estate prior to this development, he never would have pursued it because it seemed too outlandish. Too complicated, impossible, right? Like, he did what seemed [00:04:00] impossible to a traditional real estate owner, broker. And he zigged, went into a property that nobody wanted to touch, got a ton of money from the city. Absolute home run marketplace. So now I'm going to be honest with you. Zigging while others zag is not easy, right?

If you want to live a 1% life, you have to do a 99% of people won't do and that's put effort into something. And there's also risk associated with this. So you have to assess your own risk tolerance and oh my gosh, I could talk about risk for an entire season. But yes, risk is not for everybody. But if you want to do something greater than the crowd in real estate, there will be risk associated and you just have to really figure out your relationship with risk based on time in your life.

It would make more sense to be more risky when you didn't have kids as opposed to when you [00:05:00] have mouths to feed. So, what are some actionable steps you can do to zig while others zag? Well, let me tell you first, it's D Y O R. B Y O B. C 3 P O. I'm just kidding. D Y O R stands for Do Your Own Research. B Y O B stands for Bring Your Own Beer.

You don't need to bring beer to this party, just do your research. When you drive around, start looking at properties. Look at your habits. Look at your friends habits. What do you need? What do you use? What do you not use? You know what I find we need more? Small bay warehousing, right? We need more, for all intents and purposes, just garages for the trades to store their stuff.

We need more automotive shops. We need more senior living. Another one I could make a season about. The baby boomers are coming quick, and there's not nearly enough senior living for them. And who knows, [00:06:00] maybe we might even need office space, space, space. Now, I'm really excited. This is probably my favorite episode I've ever written, because I'm ending it with an anecdote that is so perfect for how we started.

The couple who sold the property for 12 million, who bought it in foreclosure for 30, 000, reached out to me March of 2020, I'm talking a week into the pandemic, and he said, Do you know of any good opportunities? And I was like, no, dude, like, no, but nothing's happened in the past week. And he said, I'm looking to buy when there's blood in the streets.

What does that mean? He is trying to do what he did in the 80s again. He was looking to do it again. Playbook again. Zig while others zag. You're gonna hear that phrase in your life. Buy when there's blood in the streets. This is how the smartest investors [00:07:00] thrive in commercial real estate. My buddy was at it again.

Now, what questions can I answer for you? And I want you to DM me at @avivarealeastate the questions. Also, if you want to get into commercial real estate investing and brokerage, you don't know where to start, go to my show notes. There's a link to a freebie, a free guide I made. Next week, we are talking about the number one mistake to avoid while investing in real estate, state, state.

Thank you, and we'll see you next week.