Jobs, Jobs, Jobs
Investing in real estate has historically been about location, location, location. That couldn't be more true, and when we look at locations or markets to invest in, we look at Jobs, Jobs, Jobs to determine where we want to invest our partners and our own investment capital.
2022 has been riddled with all kinds of news surrounding doom and gloom in traditional paper markets and hard asset markets alike. Inflation driven by multiple factors coming through the pandemic seems to be the driving force behind the negative news.
Let's stop and consider a couple of things we are looking at. Sometimes we need to look past mainstream media to find golden eggs.
First, jobs and employment numbers continue to baffle economists and the Fed. Employers are facing labor shortages, leading to low and declining unemployment numbers.
Second, low unemployment leads to more and more wage increases year over year. Employees from the Great Resignation era are demanding higher pay as a result of labor shortages as well as talent shortages.
Third, jobs drive a couple of things related to real estate. The first is housing purchases that have slowed considerably due to higher long-term mortgage rates. The second is rentals. Rentals tend to have supply constraints in times of lower purchase activity. People still need a place to live even in high inflationary and recession periods.
We are excited to have made acquisitions this year in two of the top ten markets for job growth in 2022. Atlanta ranked #7 on the list compiled by the Bureau of Labor Statistics with 5.7% growth year over year. Dallas ranked #1 on the list with 6.7% growth year over year. read the article: “10 major metros recording the biggest job growth so far this year “
That is a lot of growth meaning there is a higher demand for housing both in the purchase market and in multi-family rental spaces.
Understanding the macro and microeconomic drivers of these markets is one of the biggest things we look at on our partner's behalf. Our investment partners at Groundswell Assets trust us to steward their hard-earned capital with two primary expectations. First, a return OF their investment and second, a return ON their investment. That's what we do well for our investors and we're excited about it.
In 2022, we backed out of more deals than we closed on. We are patient as we recognize that our job is to patiently identify opportunities that will hedge against the downside risks and create higher-than-average upside opportunities. Our partners not only rely on this type of fiduciary responsibility, they demand it. We set high standards for the assets and the groups we choose to partner with to make sure our investor partners are confident in our ability to multiply their money.
Passive income is not free of risk. The best thing one of our partners told us recently was, "I don't invest in the asset, I invest in the team that is managing the asset. I expect the team to do a great job for me." That tells us a lot.
Asset management and investment selection are consequential aspects of the business that we take seriously. We're thrilled to work with so many amazing people to build wealth together. This is not a one-and-done business. It is a long-term relationship business. Our investment partners and the vendors who work with us are our friends. For that, we are grateful!
Just like how we look at Jobs, Jobs, Jobs to determine where to seek the best returns, we're blessed that our investor partners continue to have confidence in us with the Job they entrust us to do for them.
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There are still positions open on a couple of the deals we've already closed.
