Latest / Financial Survival Network / Unlocking the American Dream: Navigating Wealth with Craig Cecilio #5933

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Unlocking the American Dream: Navigating Wealth with Craig Cecilio #5933 · Financial Survival Network

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Thirty percent, maybe even more forty percent of all homes might be owned by
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hedge funds, a large hedge funds. So the American dream is definitely getting
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tougher to do, especially in this climate with increased interest rates. We're predominant
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a multi family space and we are pretty bullish there. There has its own
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set of issues, of course, with all the debt out there rising pretty
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hard and the floating rates coming do with that, So we really do see
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opportunities to be purchasers in that space as well. As you are listening to
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Carrie Let's's Financial Survival Network, where you get valuable information you just can't find
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anywhere else to thrive in today's trying times. You need the Financial Survival Network
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now more than ever. Go to Financial Survivalnetwork dot com and get your free
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newsletter and gift. Financial Survival Network now more than ever, And welcome you
0:59
are in listening to watching the Financial Survival Network. I'm your host, Carrie
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Luntz. Hey. Real estate, real estate, real estate. You know,
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in tough times, you know, if you invest smartly in real estate,
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especially after it's come down a little bit, that could be the key
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to generational wealth. Some of my best deals I've ever made in my life
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have been a real estate because when you do it right, you'll get a
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windfall. But the key is you got to do it right. And with
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us now is Craig Sicilio, founder of Diversity Fund, a fund out of
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Chicago. A. You've been a guest on the show before, Craig.
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We're really happy to have you back. Yeah, thanks, Kerry, thanks
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for having me on the show today. So you believe that the American dreams
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should be available to everyone regardless, and I totally agree with you. And
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that doesn't always seem to be the case today, does it now? Especially
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today today, we're any definitely a different time period. The markets have been
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frothy for so long or at least a whole decade in rendering a downturn here,
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and those downturns really present a lot of opportunity for people. I know
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there's a lot of fear out there. However, this is where the transparence
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of wealth happens. This is when those distressed assets are on the market,
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and this is where the institutions go in and really buy from each other.
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At the end of the day, we make that well, yeah, that's
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it, and Hey, the smart buyers know when to buy. But look
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like we do have sectors of real estate that are once upon a time where
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thought to be storybook trophy properties that are now in the dumps and nobody can
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quite figure out what to do with them. I'm talking about office buildings because
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the entire way that we live, work and shop and it's all changing,
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right, So yeah, so opportunity is it residential? Is there opportunity in
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those commercial properties that are no longer going to be in use they can be
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repurposed and perhaps turn to residential or something else. So what's your thoughts?
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Well, see, I think each market's gonna be a little different and the
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influence is gonna be a lot on. I hate to say bring politics in
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this, but there's a lot of policies that got place. Do you look
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in at cities like San Francisco and New York and what's going on there?
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Even la those are larger problems and just real estate problems. At the end
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of the day, we had the whole pandemic to work from home culture.
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A lot of things have changed, but at the end of the day,
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I do see a little bit of a thirst for people to work with each
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other to come back the office. I am seeing that, I'm seeing some
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leading indicators out there, so I would I'm a little bit kind of I
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would say bullish on this. If I come across some good office space,
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I'd like to put a good offer out there and kind of see where the
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tides come in. As far as rezoning, I'm not sure if you've ever
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done anything in New York City or some of these news cities that just doesn't
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really happen. You could say that, and you know this person or that
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person, but I don't see that being a solution on at least a holistic
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level. Well, interesting thing is those old buildings in New York. I'm
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talking the ones that were built in the late teens, nineteen teens, twenties,
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thirties, and forties. Those buildings were much more repurposable, if that's
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a word. Then the newer buildings from the seventies, sixties, seventies and
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on, because there were smaller buildings due to the building technology of the distance
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that they'd go from the elevator core was perfect for renovating, rehabbing, converting
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into residential. The newer buildings, you know, you have one hundred thousand
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foot floors with no anything, you know, just open space, and they
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really don't lend themselves to that repurposing. You got any ideas what to do
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with these newer high rise skyscrapers that are no longer going to be occupied for
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commercial uses. Yeah, I'm not even touched that. I'm more not so
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much of the office space myself that that is something that Yeah, I just
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at the end of the day, there's a lot of smart people out there.
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I have firm beliefs that someone's going to figure something out to make a
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buck off of that with dis kind of ads that someone's going to buy them,
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take a gamble on it, and usually figure something out. That's kind
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of been History has proven that that people have been resourceful and know how to
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reposition assets, especially in the commercial space. So I'm pretty again, pretty
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bullish that things will will turn around when I'm not sure, but I'm pretty
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sure it will happen at some time. Yeah, it's just it's kind of
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the sixty four trillion dollar question, you know, getting back to what you
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do, And I'm only pumping you for information because you're an expert in this,
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an expert in residential real estate. How do we make it work for
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everybody going ahead? How does everybody get to realize the American dream? It's
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right now, it's tough. I recently read some on an article about thirty
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percent, maybe even more forty percent of homes might be owned by hedge funds,
6:27
a large hedge funds. So the American dream is definitely getting tougher to
6:30
do, especially in this climate with increased interest rates. We're predominant a multi
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family space and we are pretty bullish there. There has its own set of
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issues, of course, with all the debt out there rising pretty hard and
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the floating rates coming to do with that. So we really do see opportunities
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to be purchasers in that space as well as but I haven't really seen residential
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single family come down as much as I thought it would be. I think
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sellers have just had great rates and so they're not incentivized to sell their homes
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for discounts, and buyers, unfortunately, with these higher interest rates, they
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need to have those prices a little bit lower to purchase to keep that payment
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the same. But there hasn't been since the last downturn that was a tough
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one to survive when all those loans can do to those teaser rates, those
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ninja loan products out there. We don't have that this time around, so
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it's a little different. A lot of people on the sidelines would limited supply.
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Hey, and let's not forget that the three percent mortgage has become an
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asset, whereas before it was just a liability. But when you have an
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undermarket interest rate, then it becomes an asset effectively, and it kind of
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traps you because, hey, unless you could buy your place that you're looking
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to move into for cash, it's going to cost you more than double what
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you're paying now. Assuming if you downsize, you wind up downsizing and paying
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the same price, the same monthly payment for a place half the size.
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So this has led to a really schizophrenic market, hasn't it. Yeah,
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it has, and you're not The bank is not incentivized to allow that loan
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to be assumable because they're only making three percent on their money too at the
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end of the day. So the whole thing is kind of a conundrum.
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At the other day, and looking back at a lot of this came from
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trying to solve the issues from the pandemic and how much money did we pump
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into the market from the pandemic. It was trillions and twenty trillion dollars into
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the market. So this is new territory for us that has never happened before.
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And that much money pumped into the market due to the due to something
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such as the pandemic. And unfortunately they didn't think things through. Yeah,
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well they never do. I mean, we're dealing with let's face it,
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we're dealing with government here. What was the last time they ever thought anything
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through, right, I mean, let's face it, it's government. They
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have their whole separate agenda in place, and their you know, priorities,
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everything else, all right. So looking ahead for real estate and then you
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do this for a living, we see more appreciation. What do you see
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happening here? Oh? I see, I see a slow down across the
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board. I'll stay the area we specialize is multifamily. We're seeing a lot
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of smaller developers and players having capitol calls loans coming to high loan of value
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loans in a lot of trouble right now with that. So I think from
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the other perspective is if you're a buyer, I think there will be some
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good opportunities for you. Since we've talked about the lack of supply in the
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local residential area. Multi family would looks like a strong asset class because people
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need a place to live and they're in a rent I don't see think you
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can see those rents go up as much as they did. They went up
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astronomically the rental price. Maybe you see a little flattening there, but I
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don't see that depressing too much. And then again, with that being said,
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I think you have to look at each local area across the country to
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see those particular markets and how they have changed because there's been a mass migration
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through the pandemic and now with a couple of these things we've talked about earlier,
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Hey, are we going to bring people back the office? Are people
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forced to move out of some of these markets kind of looking at those trends
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at the end of the day, or are they stuck in those areas and
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they're going to stay there? So what does that all look like? A
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lot of moving parts here? That's the truth, you know, that's the
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truth. And obviously there are businesses that require the presence of their employees.
11:03
On the other hand, the flip side of that is, if you're a
11:07
single parent or even two working parents, and you're able to do a hybrid
11:15
thing where you can work at home for part of the time and go to
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the office for part of the time. This is like the greatest thing that
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ever happened to your family. Think about it, you know. So,
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while it's definitely killed the commercial real estate market, it's really a great thing,
11:31
right, Yeah. I mean if you look at some of the stats
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out there, the data says that we have the highest care, highest cost
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of daycare in the world, the US. Yeah. No, how do
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you have a mom, maybe a single mother, how does she get in
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the office? Because of that? That just a numbers just don't work.
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So that's where it comes into handy. The work from home culture does do
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that. And so the greater issue there is that the cost of daycare at
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the end of the day. So there's got to be some kind of balancing
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out here. If you want people back in the office and there's a percentage
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of workforce that economic economically cannot get back to the office, there has to
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be some flexibility there. Yeah, exactly, And so all right, so
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residential peaking, but you're still going to get returns. Assume that inflation is
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going to continue onward. Then even if you keep up with the rate of
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inflation, you're still doing pretty well, aren't you. If you're buying stuff
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today and you factor in the cost of the debt and inflation, so in
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the future, three, four or five years out, that balance the self
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out. You you look at what you bought, you bought a pretty good
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deal. So for instance, I'm looking at something I'm buying at a seven
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percent interest rate, and let's just say rates in three or four years come
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down to just five percent. Yeah, you're going to make some You're going
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to you'll make some good money on the asset you bought, as long as
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you adjust it with the new the new rate to stay's environment. Sure,
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So so oh really, really it looks pretty good for the future. Or
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it's certainly better than other autset classes. Right, yeah, And I'm gonna
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circle list back. Who really has the funds to hold things long term?
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So if you look at how many people have that most people struggle economically at
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the end of the day in this country, and the top one percent they're
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the ones that, hey, you know, they love this time period because
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they could hold, they could buy and hold. They don't have to worry
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about their day to day bills. So that's what they do. They go
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in, they buy things discounted, they hold on it, and then the
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market's good, they sell. So they're not really worried about their day to
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day activities, how they're going to pay the rent or the mortgage or daycare
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and those things. They're professional investors. They are very rational and they're very
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patient at the end of the day. And it's tough. It's tough for
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everyone else to have that same mindset. Yeah, yeah, it really is.
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But you need to somehow get that mindset right if you want to ahead,
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you got to get out of the struggle mindset and into the opportunity mindset,
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if you will. Right, it's tough. Yeah, you should be
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thinking that way. That's some of the stuff. And I'll go talk about
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the financial education that's not really taught in schools or anything, and how do
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you learn about how do mess and all that? Could you describe financial education
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because there wasn't taught in any school I ever went to. Yeah, I
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don't. I don't know. I'm just trying to think if I ever had
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that did a lot of schooling saying that No, no, I can't think
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of a class that was said in high school college afterwards, I just yeah,
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I'm just not really. Yeah, I got fortunate to have some mentors
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at an early age to teach me this stuff. But yeah, I don't
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remember anything. I couldn't agree with you more. And you know, it's
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something that's really in short supply, and you don't know you don't have it
14:52
until you find out that you really need it, and then you don't have
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it. Right, it's too late usually most of that time. Yeah,
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but but there's always hope and look, you can get it, and certainly
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on the internet, it's never been easier to obtain that vitally needed financial education
15:15
than now. Right, Yeah, I mean in some cases today, definitely.
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I don't want to say it's too late for people. There's always an
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opportunity to learn. I think there's opportunities today for people to take advantage of.
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I really do think the way the economy is with a lot of people
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could be creative with their jobs. A lot of people have a side hustles
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nowadays. This wasn't here in the past. There's a lot of opportunity for
15:37
people to look beyond their W two job and to make some income from themselves,
15:43
but really to study how to make long term wealth is very important.
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There's still not a lot of education out there about it. There's a lot
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of disinformation. I can't understand that disinformation. But we all know when the
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algorithms drive the traffic and drive the articles that you read all day long,
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every day you're reading right now, where there's a lot going on the news
16:03
politically, geopolitically is going on. There's a couple of wars going on at
16:07
the end of the day, so there's a lot out there that's being pushed.
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But I do hear a lot more about Travis Kelsey and Taylor Swift than
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I do about the war in Ukraine, though that find that fast. So
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to keep our priorities straight here, what's more important than Taylor Swift? I
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don't know the other guys. So Travis I've heard something about on my kids
16:26
mention it whatever. Yeah, but yeah, like you could be doing something
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useful instead of the stargazing or actually know a couple of other choice words for
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it, but we'll just call it stargazing, all right. So, Greig,
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people want to find you, want to get in touch with you.
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Where do you go to find Craig. Yeah, great, easy pers my
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company Diversity Fund dot com or we're active or active platform that's opened up for
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micro investors as low as five hundred dollars take advantage of these distress assets in
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this downturn. Check me out my social profiles LinkedIn Twitter, Instagram, Craig
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Cicilio very easy to find. I don't think anyone else has the name so
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excellent. Well, there's a link in the show notes to this interview on
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Financial Survival Network dot com. Make sure you go there. Sign up for
17:18
our free newsletter, The Guess that's free, like the best things in life.
17:22
If you got a question for Craig myself happy to get it answered for
17:26
you quickly. The email address is Klahcarrie LUTs dot com. Creig, It's
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always a pleasure talking with you. I'd like your global perspective and your holistic
17:37
approach and we'll definitely have you on again soon. Trey, Thanks Kerry,
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thanks for having me, appreciate it. Thanks for listening to Carrie Letz's Financial
17:45
Survival Network, your solution to today's trying times. For the latest, go
17:51
to Financial Survivalnetwork dot com. Financial Survival Network now more than ever CRUs