Latest / Financial Survival Network / Crisis Investing for Profit -- Joe Robert #5814

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Crisis Investing for Profit -- Joe Robert #5814 · Financial Survival Network

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I mean typically you're always looking at the same similar factors. Money inflows,
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right, I mean money is what drives prices, So that can be other
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investment from corporations, technology, municipalities, other investors anywhere that's attracting capital and
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jobs, and that there is a greater demand for property than what exists there
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on the market. You're listening to Carrie Letz's Financial Survival Network where you get
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more than ever. And welcome you are listening to watching the Financial Survival Network.
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I'm your host, Carrie lets Well. Joe roberts On with us.
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Now you find a bit Robert Ventures a dot com And even in this crazy
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environment, Joe, you are still finding things to invest in. First,
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tell us your investment perspective, the economy and in what you're doing. All
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right, Well, I think like most investors in this time period, we're
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all trying to guess where the world is going to go, and if we
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all could predict the future, we'd probably all be a lot richer, but
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we at least have to make some best assumptions with our portfolio. So what
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am I currently doing. We invest in two different areas, one being on
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the real estate side for now twenty years. So we're actually have relationships and
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acquiring properties over in the Outer Banks in North Carolina, and this is an
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area that is has a lack of supply of any new homes coming on the
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market. So we're targeting price points under seven hundred thousand dollars. We're acquiring
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lots and we're building spack homes and then going to the market with those.
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I think you know what I'm trying to say is there if you're looking at
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any market across the US right now, it needs you need to understand the
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supply and the demand dynamics and understand the price point in which majority of the
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buyers are able to come in and where it is affordable based on where the
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interest rates are today. And so therefore this market works for us. And
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so we've been acquiring lots there and we're building new homes. Okay, so
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rates, obviously rates are important. Do you expect rates to stay where they
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are go down or go up? What's your perspective there, Try to take
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a little bit of contrary and bets. You know, everyone over last year
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keep saying that rates are going to go down pretty quick, and it kind
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of hasn't happened. So I'm going to take the other side and say that
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I think rates are going to stay let's call it elevated, or at these
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levels longer than people anticipate, because I think there's still a lot of liquidity
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in the system, and therefore there still could be inflation pressures for the preceieable
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future. Okay, so but basically, you know, rates are close to
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what their historical norm. You know, we got spoiled with zero percent interest
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and less than three percent mortgages and all that, but really five percent five
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percent to interest rate, six seven percent mortgage has been the norm for the
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past, with notable exceptions, for the past forty fifty years. Correct,
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And I think, you know, looking out over the next year or so,
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basically what's happening today in the market, we're actually seeing maybe what may
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appear to be a soft landing. Now, things can definitely change overnight with
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anything happen globally, but things are I feel are slowing down in the economy
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and make it slower over the next twelve months. But I think unless things
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get drastically bad, I think they might not need to lower those interest rates,
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and like you're saying, basically keep them at more normal levels moving forward,
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at least for a while. Okay, I'll buy that. And so
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if this is the new norm, what other opportunities besides? I guess lower
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cost real estate? Seven hundred thousand is low cost in this day and age,
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right, Yeah, I mean, I guess it definitely depends on your
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jurisdiction, but yeah, I mean almost you know, the five hundred thousand,
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I mean, I would say five hundred price point is starting to become
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quite an average perch price in a lot of different areas. And I think,
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you know, the other areas that has lower cost maybe like Huntsville,
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Alabama and so forth, where obviously traumatically lower, will increase over the next
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decade, and that maybe great areas look at because of the cost to build.
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Okay, so you like Huntsville, what other markets? So these are
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markets in the south landlord friendly jurisdictions, we would call them growing areas because
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pretty much everything in the South is growing, lower cost, lower tax.
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What else attracts you to these areas? I mean typically you're always looking at
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the same similar factors. Money inflows, right, I mean money is what
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drives prices. So that can be other investment from corporations, technology, municipalities,
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other investors anywhere that's attracting capital and jobs, and that there is a
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greater demand for property than what exists there on the market. Okay, so
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supplied demand fundamentals. So you're not investing in New York State or Illinois or
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California for obvious reasons, correct, And then you know depend Obviously there's experts
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in New York that focus on those markets, but for the general investor,
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it's much easier to invest in areas where you can get things done a lot
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quicker with the local governments, building permits and so forth. It keeps your
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costs down. Okay, so costs the unionization anything else we're looking at.
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Ian. I think the average salary of the jobs being placed in that area
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is pretty important, right, Like I said, kind of following that money,
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if the certain corporations are putting headquarters there or data centers and they're attracting
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high salary six figure jobs that's going to at some point reflect on the average
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median income and household price in that market. All right, so yeah,
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which is totally logical. I mean, look, there was just an article
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out in New York City lust five point three percent of its population, nearly
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half a million people in the past two years. You want to go where
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those people are moving to, right, we want to go to where those
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people are moving to. We want to go where there's talent, there's universities,
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other people want to live. And then where the other you know,
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calling Fortune five hundreds or other larger corporations are willing to set up shop in
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their businesses other headquarters. Right, So well, what about the office buildings.
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Obviously you're not investing in them. Do you have a feeling about about
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where they're heading and any uses for them, because you could pick them up
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really cheap now and a lot of place I think, like most cycles will
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probably happen, is call it it over the next five you know, three
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to seven years, you'll see a lot of buildings come market greatly discounted because
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of the remote work that's occurring, and therefore you know they'll sell at a
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deep discount because the capax orts tis will be too great to get new tenants
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in there, and so they'll be sold at a great discount. No new
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office construction will occur, or they'll be limited new construction that will cur in
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that sector for five or ten years and then maybe, you know, depending
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on the area, ten or fifteen years out, it'll kind of catch back
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up with demand because of lack of construction. I think that will kind of
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it may present an opportunity for office long term in certain areas, not every
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area. Okay, so all right, so the opportunity. What about retail
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space? The trend there has been pretty abysmal, but in certain states,
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like in Florida, retail is doing great. Retail in Florida. I mean
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that's a car a heavy car state, right, So, and there's a
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lot of local shops. You know, when you talk about the barber,
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anything that you basically when you have retail, and you are talking about any
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business that doesn't get affected by Amazon or rely on Amazon, like your hair
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cut, you know, your your wash, alcohol you might pick up and
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so forth, they're going to need a retail space. And there's especially in
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Florida, they're willing to drive and pick that up. You still can't get
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a haircut on Amazon. Maybe they'll get a Edwards scissor hands at You'll be
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able to do that one day, but for now. And yes, you
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can buy groceries and stuff over the web, but you know, it's still
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the kind of thing people generally. Yeah, if you're buying shampoo, easy
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to buy it from Amazon or bathroom cleaner, But when you're buying food that
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you're putting into your body and your family's bodies, you're not necessarily going to
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go for that, correct And I think two sides One, there's always a
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group of people that will always probably exist that when they go to the store,
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they want to pick out their meats. They wouldn't pick out their fish,
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they want to pick out their fruit, and they're very picky on that,
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what color that's been had, it looks like, And they love going
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to the store because that's part of their weekly thing. And I think they're
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always a group of those people. And also just casually browsing Amazon, you
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know, you will see that a lot of these little products are definitely trending
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up in price compared to in store, and I think as more people realize
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that or may get budget friendly over next year as things slow down, they
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might actually be starting to buy more of these things back in store if they're
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cheaper than Amazon, right, so, cheaper and convenience accounts for something.
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You know, a lot of places Amazon will deliver same day, but a
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lot of things they can't deliver the same day, takes two or three days.
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You know, if you're at a toilet paper, you're not going to
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wait for Amazon to deliver it in two or three days, right, correct?
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And not? You know, like I was mentioning, like sometimes right
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now, you go on there and find a case of tissues, but they're
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charging five dollars where maybe you go up to targeek get that for a dollar
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ninety nine each. And really because they have to bake in that the you
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know, shipping and everything else and the convenience. And now I think they've
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kind of realized that some people are willing to pay that premium, so they're
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charging more online. Right. So A one other area you mentioned prequel was
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Web three And first tell us what web three is. And while you think
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it's so desirable to invest in, now, well I've been investing there for
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about five and a half years. Web three, you know, it's really
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I'd like to make it very easy to understand. It's just kind of the
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next software evolution that is bringing more transactions on a peer to peer basis where
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you can interact and do transactions with other individuals, removing other large corporation intermediaries
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or governments within that transaction. I think why we are focused there now is
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because most people are not focused there right. And I've learned over my investing
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career that the best deals to be had or best times acquire, or when
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the people think that the sector or industry is not great to invest in,
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and based on a lot of the overleveraged companies that existed over the last year
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that blew up, I think that has scared a lot of people away.
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And you know now is kind of creating an opportunity to do your what we
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call dollar costs averaging or buy your blue chip like assets that you think will
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be the infrastructure or the settlement layers of transactions for the future digital economy something.
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Yet you know, well, I think everyone the top two examples everyone
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always mentions is bitcoin ethereum. When it comes to ethereum, you know a
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lot of people think that there is a great possibility. Now everything is still
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in its early stage. There's no guarantees, but there's a great possibility that
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a lot of financial transactions can settle on the Ethereum blockchain in the future as
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a settlement layer. Okay, I'll buy it. You know, what do
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you think of the FED now? I mean it's impact on all look digital
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assets. I haven't done enough a study into it to fully understand luch about
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it. I think it's made a little bit more noise and not to be
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too concerning, I think kind of the difference here between digital assets or let's
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say like bitcoin, is the de centralized thesis behind it and the ability to
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send payments from your own wallet somebody across the world without that government agency having
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to approve it to where you get into these you know, central bank digital
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currencies are the FED now system. You know that could always be gated and
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they could always make their decisions on where and how you spend your money.
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Okay, well I think you know. I just remember, I'm just reminded
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of a bumper sticker in a car once and it said don't steal. The
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government hates competition, and the best way they steal is through the most effective
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ever known to man is through inflation. Are they gonna put up with competition
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here? I think. I think that's what's happening right now, and this
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part of every adoption cycle, there's different phases that goes through, and right
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now you know they're trying to reject it, and by putting up a lot
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of these laws or proposals will call it to call things securities or proposals for
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taxes, or Biden's campaign to kind of talk about crypto people. But I
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think at the end of the day, five or ten years, it's obviously
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it's going to happen in some capacity, and short term it's probably a lot
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of noise why they try to prevent certain things that happen. But I think
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because of the global phenomenon, I don't think it's going to be stopped by
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any means. And I think it's gonna be real important to see how this
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plays out in the next couple of years with the election and kind of how
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that transition goes in who comes in all right. I have my own opinion
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about it, but I think it's too early to know. But the one
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thing I know about the government is you can always count on them to screw
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everything up and to kill the party, to piss on your parade, if
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you will. Yeah, But like like China, you know, they banned
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crypt bitcoin mining and everything over the last five you know, five years,
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seven years, call it multiple times, different times, and so I think
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we kind of could be going a little bit through that phase right now where
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the government is trying to stop a lot of the activity for their own agenda.
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But at the end of the day, like I said, it could
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be election, a change of election or whatever. In a couple of years,
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it could go the other direction. But I think if we're looking out
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along five ten year horizon, a lot, you know, there's gonna be
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a lot of this that will be adopted in today's community. All right.
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I guess we're gonna have to find out. But you know, look,
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if possession with intent to distribute bitcoin or other crypto will land you five to
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ten years in jail, I wonder how many people are still going to be
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doing it. But that remains to be seen. That's really the question here.
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I don't have the answer to it. Hey, Joe, appreciate you
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coming on. Hey, any other investment sectors that you're you've been an eye
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on now that you're maybe not putting money into you know, I was just
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one that's kind of been on my mind. We'll call it, let's say,
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and it's kind of a broad range, and you'll probably see a lot
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of the activity on Twitter, but I would definitely say through the SMB space,
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I think being able to utilize this next decade, we'll call it being
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able to utilize technology AI Zapier no code applications and applying these into applying these
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to businesses, making it more efficient, removing some of the overhead of the
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labor and those annual salaries or offshoring part of that labor and reducing costs and
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increasing sales is a great opportunity, whether it's a startup or you're going out
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and acquiring these businesses where there are older generations running them and they're typically not
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willing to learn all the new tools and they're just kind of chugging along waiting
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for someone to come and buy them. All right, how do you find
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that business? By the way, that's what put it to end the paper.
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Looking for company that's profitable or marginally profitable, profitable and as an old
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style management with a resistance to change and the newest technology. I don't think
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that AD's going to get you a lot of tension. Well, I think
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like everything you got to go. So, you know, some things could
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just be Google. Right. Are they all on Google or are they not?
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A lot of these databases of these companies that receive the PPP money,
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there's database out there. They kind of aggregate this information because it public knowledge,
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and you can start from there in certain sectors and you know, make
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a curated list and then go out there and look at the Google, you
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know, Google, and see do they have a website. What's the last
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time they update the website? You know, is it's just original tenure,
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you know, done ten years ago? They have done the updates? What
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are the reviews? Are they even managing the reviews? I think that's a
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great place to start, and then from there I would try to do outreach
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to those owners. Hey, my dry cleaner is a perfect target for this
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because they use paper tickets. If they not, they don't use everything is
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like an alphabetical order. They don't use like bar codes. Like I went
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to a dry cleaner in one place they put these little mini barcodes on my
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clothes. Never had another ticket on there. Another tag you know they put
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through the buttonholes. So so maybe my dry cleaner is a good a good
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place to start here. That is a great one because even when you go
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there, we got the paper two and you know, when they're done,
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they if they had in the computer, it could just it should go around
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the car the you know, the line and it should scan it. It
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should send you a text message automatically when it's done, and you got to
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kind of guess you got a call as already. So yeah, there's a
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lot of things like that that you know, technology has come so far,
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but there's probably saw a lot of room or we could implement this into all
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the businesses that exist out there. And that is a perfect example, like
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none of the dry cleaners that I go to, they don't send me text
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messages saying pick up your clothes clothes and effectively, when you have hanging clothes
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in the dry cleaner, it's inventory, right, It's basically inventory. It's
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a services which have been rendered but not yet paid for, and just to
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pick up your cash flow by bugging people. You know, first you send
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them one then three days, then two days. More than boom boom,
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boom boom, you're sending them one every day and it's all right, already,
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I'll pick it up and that's cash in the bank, right, Yeah,
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I agree. And so I mean, look like, you know,
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my dad had a dental instrument business and they were making enough money every year
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that it didn't impact them to have to grow any bigger, and so there
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was no desire to learn this new technology or to get better at online marketing.
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And so I think, you know, finding these types of owners are
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a lot of them out there, and they're great potential sellers or possibly you
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know, buying majority of the equity and keeping one for a certain time as
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you transition that business and utilize our expertise. All right, I love it,
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Joe. I think that is a great thing. And if you're young.
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A lot of times these smaller companies they need to have a generational shift.
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Health isn't good, they want to retire and then not going to be
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financeable, especially with the state of regional banks now who made a lot of
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these loans. So you get owner financing, you put down ten percent five
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ten percent cash, you cash them out, you give them an earn out,
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and then you proceed to build the business easier to do that than it
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is to go start your own new business, which is very costly in terms
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of time or resources and in terms of building systems from the ground up.
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Where, hey, my dry cleaner has got a lousy system, but it
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is a system. And then I just upgrade his system instead of having to
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build one from the ground up. Where move three doors down from him,
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start my own dry cleaner, and then I got to take market share away,
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right Yeah. And then once you acquire one dry cleaner and you have
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the experience and you put all systems in place for one and it's automated.
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I mean, then the next year you can move onto a second and so
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forth, and maybe after a decade you roll up ten or twenty of these
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and then you sell that to a pe group at a higher multiple and that's
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you know, the way to make real wealth or the next decade. All
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right, after we get off the wire here, I'm going over to my
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dry cleaner. I'm going to make him an offer, all right, Joe,
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Hey, appreciate it, so again, just tell us your website where
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we find you, Yeah, at Robert ventures dot com. And thank thank
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you everybody for joining us today. Hey, And the link is in the
22:02
show notes to this interview on Financial Survival Network dot com. Just click it,
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it'll take you right over there. While you're at the site, please
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sign up for your free newsletter. Joe really appreciate you coming on. We'll
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talk to you again real soon. Thank you, carry thanks for listening to
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Carrie Lenz's Financial Survival Network, your solution to today's trying times. For the
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