I mean typically you're always looking at the same similar factors. Money inflows,
right, I mean money is what drives prices, So that can be other
investment from corporations, technology, municipalities, other investors anywhere that's attracting capital and
jobs, and that there is a greater demand for property than what exists there
on the market. You're listening to Carrie Letz's Financial Survival Network where you get
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I'm your host, Carrie lets Well. Joe roberts On with us.
Now you find a bit Robert Ventures a dot com And even in this crazy
environment, Joe, you are still finding things to invest in. First,
tell us your investment perspective, the economy and in what you're doing. All
right, Well, I think like most investors in this time period, we're
all trying to guess where the world is going to go, and if we
all could predict the future, we'd probably all be a lot richer, but
we at least have to make some best assumptions with our portfolio. So what
am I currently doing. We invest in two different areas, one being on
the real estate side for now twenty years. So we're actually have relationships and
acquiring properties over in the Outer Banks in North Carolina, and this is an
area that is has a lack of supply of any new homes coming on the
market. So we're targeting price points under seven hundred thousand dollars. We're acquiring
lots and we're building spack homes and then going to the market with those.
I think you know what I'm trying to say is there if you're looking at
any market across the US right now, it needs you need to understand the
supply and the demand dynamics and understand the price point in which majority of the
buyers are able to come in and where it is affordable based on where the
interest rates are today. And so therefore this market works for us. And
so we've been acquiring lots there and we're building new homes. Okay, so
rates, obviously rates are important. Do you expect rates to stay where they
are go down or go up? What's your perspective there, Try to take
a little bit of contrary and bets. You know, everyone over last year
keep saying that rates are going to go down pretty quick, and it kind
of hasn't happened. So I'm going to take the other side and say that
I think rates are going to stay let's call it elevated, or at these
levels longer than people anticipate, because I think there's still a lot of liquidity
in the system, and therefore there still could be inflation pressures for the preceieable
future. Okay, so but basically, you know, rates are close to
what their historical norm. You know, we got spoiled with zero percent interest
and less than three percent mortgages and all that, but really five percent five
percent to interest rate, six seven percent mortgage has been the norm for the
past, with notable exceptions, for the past forty fifty years. Correct,
And I think, you know, looking out over the next year or so,
basically what's happening today in the market, we're actually seeing maybe what may
appear to be a soft landing. Now, things can definitely change overnight with
anything happen globally, but things are I feel are slowing down in the economy
and make it slower over the next twelve months. But I think unless things
get drastically bad, I think they might not need to lower those interest rates,
and like you're saying, basically keep them at more normal levels moving forward,
at least for a while. Okay, I'll buy that. And so
if this is the new norm, what other opportunities besides? I guess lower
cost real estate? Seven hundred thousand is low cost in this day and age,
right, Yeah, I mean, I guess it definitely depends on your
jurisdiction, but yeah, I mean almost you know, the five hundred thousand,
I mean, I would say five hundred price point is starting to become
quite an average perch price in a lot of different areas. And I think,
you know, the other areas that has lower cost maybe like Huntsville,
Alabama and so forth, where obviously traumatically lower, will increase over the next
decade, and that maybe great areas look at because of the cost to build.
Okay, so you like Huntsville, what other markets? So these are
markets in the south landlord friendly jurisdictions, we would call them growing areas because
pretty much everything in the South is growing, lower cost, lower tax.
What else attracts you to these areas? I mean typically you're always looking at
the same similar factors. Money inflows, right, I mean money is what
drives prices. So that can be other investment from corporations, technology, municipalities,
other investors anywhere that's attracting capital and jobs, and that there is a
greater demand for property than what exists there on the market. Okay, so
supplied demand fundamentals. So you're not investing in New York State or Illinois or
California for obvious reasons, correct, And then you know depend Obviously there's experts
in New York that focus on those markets, but for the general investor,
it's much easier to invest in areas where you can get things done a lot
quicker with the local governments, building permits and so forth. It keeps your
costs down. Okay, so costs the unionization anything else we're looking at.
Ian. I think the average salary of the jobs being placed in that area
is pretty important, right, Like I said, kind of following that money,
if the certain corporations are putting headquarters there or data centers and they're attracting
high salary six figure jobs that's going to at some point reflect on the average
median income and household price in that market. All right, so yeah,
which is totally logical. I mean, look, there was just an article
out in New York City lust five point three percent of its population, nearly
half a million people in the past two years. You want to go where
those people are moving to, right, we want to go to where those
people are moving to. We want to go where there's talent, there's universities,
other people want to live. And then where the other you know,
calling Fortune five hundreds or other larger corporations are willing to set up shop in
their businesses other headquarters. Right, So well, what about the office buildings.
Obviously you're not investing in them. Do you have a feeling about about
where they're heading and any uses for them, because you could pick them up
really cheap now and a lot of place I think, like most cycles will
probably happen, is call it it over the next five you know, three
to seven years, you'll see a lot of buildings come market greatly discounted because
of the remote work that's occurring, and therefore you know they'll sell at a
deep discount because the capax orts tis will be too great to get new tenants
in there, and so they'll be sold at a great discount. No new
office construction will occur, or they'll be limited new construction that will cur in
that sector for five or ten years and then maybe, you know, depending
on the area, ten or fifteen years out, it'll kind of catch back
up with demand because of lack of construction. I think that will kind of
it may present an opportunity for office long term in certain areas, not every
area. Okay, so all right, so the opportunity. What about retail
space? The trend there has been pretty abysmal, but in certain states,
like in Florida, retail is doing great. Retail in Florida. I mean
that's a car a heavy car state, right, So, and there's a
lot of local shops. You know, when you talk about the barber,
anything that you basically when you have retail, and you are talking about any
business that doesn't get affected by Amazon or rely on Amazon, like your hair
cut, you know, your your wash, alcohol you might pick up and
so forth, they're going to need a retail space. And there's especially in
Florida, they're willing to drive and pick that up. You still can't get
a haircut on Amazon. Maybe they'll get a Edwards scissor hands at You'll be
able to do that one day, but for now. And yes, you
can buy groceries and stuff over the web, but you know, it's still
the kind of thing people generally. Yeah, if you're buying shampoo, easy
to buy it from Amazon or bathroom cleaner, But when you're buying food that
you're putting into your body and your family's bodies, you're not necessarily going to
go for that, correct And I think two sides One, there's always a
group of people that will always probably exist that when they go to the store,
they want to pick out their meats. They wouldn't pick out their fish,
they want to pick out their fruit, and they're very picky on that,
what color that's been had, it looks like, And they love going
to the store because that's part of their weekly thing. And I think they're
always a group of those people. And also just casually browsing Amazon, you
know, you will see that a lot of these little products are definitely trending
up in price compared to in store, and I think as more people realize
that or may get budget friendly over next year as things slow down, they
might actually be starting to buy more of these things back in store if they're
cheaper than Amazon, right, so, cheaper and convenience accounts for something.
You know, a lot of places Amazon will deliver same day, but a
lot of things they can't deliver the same day, takes two or three days.
You know, if you're at a toilet paper, you're not going to
wait for Amazon to deliver it in two or three days, right, correct?
And not? You know, like I was mentioning, like sometimes right
now, you go on there and find a case of tissues, but they're
charging five dollars where maybe you go up to targeek get that for a dollar
ninety nine each. And really because they have to bake in that the you
know, shipping and everything else and the convenience. And now I think they've
kind of realized that some people are willing to pay that premium, so they're
charging more online. Right. So A one other area you mentioned prequel was
Web three And first tell us what web three is. And while you think
it's so desirable to invest in, now, well I've been investing there for
about five and a half years. Web three, you know, it's really
I'd like to make it very easy to understand. It's just kind of the
next software evolution that is bringing more transactions on a peer to peer basis where
you can interact and do transactions with other individuals, removing other large corporation intermediaries
or governments within that transaction. I think why we are focused there now is
because most people are not focused there right. And I've learned over my investing
career that the best deals to be had or best times acquire, or when
the people think that the sector or industry is not great to invest in,
and based on a lot of the overleveraged companies that existed over the last year
that blew up, I think that has scared a lot of people away.
And you know now is kind of creating an opportunity to do your what we
call dollar costs averaging or buy your blue chip like assets that you think will
be the infrastructure or the settlement layers of transactions for the future digital economy something.
Yet you know, well, I think everyone the top two examples everyone
always mentions is bitcoin ethereum. When it comes to ethereum, you know a
lot of people think that there is a great possibility. Now everything is still
in its early stage. There's no guarantees, but there's a great possibility that
a lot of financial transactions can settle on the Ethereum blockchain in the future as
a settlement layer. Okay, I'll buy it. You know, what do
you think of the FED now? I mean it's impact on all look digital
assets. I haven't done enough a study into it to fully understand luch about
it. I think it's made a little bit more noise and not to be
too concerning, I think kind of the difference here between digital assets or let's
say like bitcoin, is the de centralized thesis behind it and the ability to
send payments from your own wallet somebody across the world without that government agency having
to approve it to where you get into these you know, central bank digital
currencies are the FED now system. You know that could always be gated and
they could always make their decisions on where and how you spend your money.
Okay, well I think you know. I just remember, I'm just reminded
of a bumper sticker in a car once and it said don't steal. The
government hates competition, and the best way they steal is through the most effective
ever known to man is through inflation. Are they gonna put up with competition
here? I think. I think that's what's happening right now, and this
part of every adoption cycle, there's different phases that goes through, and right
now you know they're trying to reject it, and by putting up a lot
of these laws or proposals will call it to call things securities or proposals for
taxes, or Biden's campaign to kind of talk about crypto people. But I
think at the end of the day, five or ten years, it's obviously
it's going to happen in some capacity, and short term it's probably a lot
of noise why they try to prevent certain things that happen. But I think
because of the global phenomenon, I don't think it's going to be stopped by
any means. And I think it's gonna be real important to see how this
plays out in the next couple of years with the election and kind of how
that transition goes in who comes in all right. I have my own opinion
about it, but I think it's too early to know. But the one
thing I know about the government is you can always count on them to screw
everything up and to kill the party, to piss on your parade, if
you will. Yeah, But like like China, you know, they banned
crypt bitcoin mining and everything over the last five you know, five years,
seven years, call it multiple times, different times, and so I think
we kind of could be going a little bit through that phase right now where
the government is trying to stop a lot of the activity for their own agenda.
But at the end of the day, like I said, it could
be election, a change of election or whatever. In a couple of years,
it could go the other direction. But I think if we're looking out
along five ten year horizon, a lot, you know, there's gonna be
a lot of this that will be adopted in today's community. All right.
I guess we're gonna have to find out. But you know, look,
if possession with intent to distribute bitcoin or other crypto will land you five to
ten years in jail, I wonder how many people are still going to be
doing it. But that remains to be seen. That's really the question here.
I don't have the answer to it. Hey, Joe, appreciate you
coming on. Hey, any other investment sectors that you're you've been an eye
on now that you're maybe not putting money into you know, I was just
one that's kind of been on my mind. We'll call it, let's say,
and it's kind of a broad range, and you'll probably see a lot
of the activity on Twitter, but I would definitely say through the SMB space,
I think being able to utilize this next decade, we'll call it being
able to utilize technology AI Zapier no code applications and applying these into applying these
to businesses, making it more efficient, removing some of the overhead of the
labor and those annual salaries or offshoring part of that labor and reducing costs and
increasing sales is a great opportunity, whether it's a startup or you're going out
and acquiring these businesses where there are older generations running them and they're typically not
willing to learn all the new tools and they're just kind of chugging along waiting
for someone to come and buy them. All right, how do you find
that business? By the way, that's what put it to end the paper.
Looking for company that's profitable or marginally profitable, profitable and as an old
style management with a resistance to change and the newest technology. I don't think
that AD's going to get you a lot of tension. Well, I think
like everything you got to go. So, you know, some things could
just be Google. Right. Are they all on Google or are they not?
A lot of these databases of these companies that receive the PPP money,
there's database out there. They kind of aggregate this information because it public knowledge,
and you can start from there in certain sectors and you know, make
a curated list and then go out there and look at the Google, you
know, Google, and see do they have a website. What's the last
time they update the website? You know, is it's just original tenure,
you know, done ten years ago? They have done the updates? What
are the reviews? Are they even managing the reviews? I think that's a
great place to start, and then from there I would try to do outreach
to those owners. Hey, my dry cleaner is a perfect target for this
because they use paper tickets. If they not, they don't use everything is
like an alphabetical order. They don't use like bar codes. Like I went
to a dry cleaner in one place they put these little mini barcodes on my
clothes. Never had another ticket on there. Another tag you know they put
through the buttonholes. So so maybe my dry cleaner is a good a good
place to start here. That is a great one because even when you go
there, we got the paper two and you know, when they're done,
they if they had in the computer, it could just it should go around
the car the you know, the line and it should scan it. It
should send you a text message automatically when it's done, and you got to
kind of guess you got a call as already. So yeah, there's a
lot of things like that that you know, technology has come so far,
but there's probably saw a lot of room or we could implement this into all
the businesses that exist out there. And that is a perfect example, like
none of the dry cleaners that I go to, they don't send me text
messages saying pick up your clothes clothes and effectively, when you have hanging clothes
in the dry cleaner, it's inventory, right, It's basically inventory. It's
a services which have been rendered but not yet paid for, and just to
pick up your cash flow by bugging people. You know, first you send
them one then three days, then two days. More than boom boom,
boom boom, you're sending them one every day and it's all right, already,
I'll pick it up and that's cash in the bank, right, Yeah,
I agree. And so I mean, look like, you know,
my dad had a dental instrument business and they were making enough money every year
that it didn't impact them to have to grow any bigger, and so there
was no desire to learn this new technology or to get better at online marketing.
And so I think, you know, finding these types of owners are
a lot of them out there, and they're great potential sellers or possibly you
know, buying majority of the equity and keeping one for a certain time as
you transition that business and utilize our expertise. All right, I love it,
Joe. I think that is a great thing. And if you're young.
A lot of times these smaller companies they need to have a generational shift.
Health isn't good, they want to retire and then not going to be
financeable, especially with the state of regional banks now who made a lot of
these loans. So you get owner financing, you put down ten percent five
ten percent cash, you cash them out, you give them an earn out,
and then you proceed to build the business easier to do that than it
is to go start your own new business, which is very costly in terms
of time or resources and in terms of building systems from the ground up.
Where, hey, my dry cleaner has got a lousy system, but it
is a system. And then I just upgrade his system instead of having to
build one from the ground up. Where move three doors down from him,
start my own dry cleaner, and then I got to take market share away,
right Yeah. And then once you acquire one dry cleaner and you have
the experience and you put all systems in place for one and it's automated.
I mean, then the next year you can move onto a second and so
forth, and maybe after a decade you roll up ten or twenty of these
and then you sell that to a pe group at a higher multiple and that's
you know, the way to make real wealth or the next decade. All
right, after we get off the wire here, I'm going over to my
dry cleaner. I'm going to make him an offer, all right, Joe,
Hey, appreciate it, so again, just tell us your website where
we find you, Yeah, at Robert ventures dot com. And thank thank
you everybody for joining us today. Hey, And the link is in the
show notes to this interview on Financial Survival Network dot com. Just click it,
it'll take you right over there. While you're at the site, please
sign up for your free newsletter. Joe really appreciate you coming on. We'll
talk to you again real soon. Thank you, carry thanks for listening to
Carrie Lenz's Financial Survival Network, your solution to today's trying times. For the
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