Hi all - been a while.

Behind the scenes, I’ve been trying out video content & building that. You can find me at @Idiotsguidetorealestate on Instagram where I am up close and personal.

It’s been good to write and putting pen to paper.

Let’s talk about some updates and thoughts I have…

Previously, I had been working on an AI underwriting tool called DealIntel.ai. It was a way to capture deal docs via upload & form submission and it would extract docs from a T-12, RR, OM, etc and be able to build a financial model from it with different stress test.

There are a lot of AI tools, but native Claude & ChatGPT are pretty damn good at this stuff right now. You can also use Notebook LM to do all of that and create decks from it.

Claude actually built a super sexy model for an industrial building I was trying to model it.

Email me and I can send it to you!

The trouble with starting an AI wrapper company is that you’re building a house on rented land and if it’s a feature Anthropic or OpenAI. That being said, I learned a lot.

The learnings:

That being said, I don’t know if I would try to build an AI business because I don’t want to compete against the frontier model companies or VC backed competitors.

My cofounder was one of my really good friends & also a real estate investor. It’s also tough to do this as a “side hustle” when there are full time companies focusing on this and I wanted to build a “platform”. With the rise in vibe coding tools as well, it’s very important where you focus your time and energy.

I treated this more as a “another basket” to put my eggs into.

We sold the portfolio in 2023/2024 and only have a single family house now in my partnership. A lot of the sellers in multifamily in my market weren’t really making sense when it came to numbers and I didn’t want to put my investors in a risky financial position.

The opportunity cost for that is super high for crappy returns and you also run the risk of a shitty deal where it all goes bad.

There are so many bad actors in the syndication space that you have to be weary of. I’m happy to do another post on my personal experience with that and how to look out for it.

There’s also a question you have to ask yourself of what markets do you want to play in?

I was doing a deep dive into the PnL of my real estate portfolio before we sold it. I realized that to become wealthy like Ben Mallah or any Rolls Royce driving person, you need a looooot of real estate that you syndicate or you need a lot of good deals with you being the only stake holder.

You can make a few million dollars with syndications, but it’s going to be diluted or sometimes you have to watch out for predatory fees if you’re an LP.

Lately I’ve been evaluating… is real estate the best place to focus my time at this current moment?

I’ve landed on the answer of yes but I need to own the majority of the equity of the deal so I can refinance. In the mean time, I am trying to maximize my cash flow by having a few side hustles & maximizing my W2 income at my day job.

This is the question of what do you want to do. I wanted to be a bigger fish in a small pond originally, but I’ve started to change my mind on it.

The goal for right now is to be a small landlord is a very expensive town. A rising tide lifts all boats. The markets I previously played in (midwest) are great for paper returns but unfortunately, the returns are all eaten up because the huge capex.

In markets like San Francisco Bay Area, it’s easy to increase values if you have the right contacts and are able to add value. These are also very expensive markets with high barrier to entry ($$$, archaic zoning laws) - these will protect the value of your investment.

I am very bullish on the Bay Area long term, but I do not want to invest in California residential (outside of a personal residence) due to a very competitive market, unfriendly landlord laws, terrible insurance coverage, and aging buildings.

The big question I am asking myself is what markets work for me because I want appreciation and some cash flow. I don’t need income from real estate, but I do need real estate to appreciate so I can eventually 1031.

Real estate is in an interesting position. I think the next few years will be opportune times to buy real estate at good discounts.

Long term owners have been battered by rising interest rates, insurance rates, and tax reassessment. Imagine if you’re a 75 year old long term property owner that bought real estate back in the 80s and 90s - how would you feel about the current financial situation?

Would you still have “that dog in you” wanting to deal with tenants?

You also have to factor in commercial loans with their balloon payments due…

Syndicators that bought between 2020-2022 with essentially <4.5% interest rates will have a balloon payment between 5-10 years. Meaning from 2025 to 2032, they will be forced to refinance because their note is coming due.

Oftentimes, they bought at inflated values and the investors are underwater right now.

This is going to be a very interesting time for commercial real estate. I would love to buy a warehouse or two in the next few years 🙂

I really thank all of you for reading this far. it’s been a while since I’ve written anything and I appreciate all of you. Feel free to email me personally 🙂