Over the last year, we have witnessed major economic and political upheaval. Last year we had a republican in the White House and business was the main driver of the economy. Today we have Democrats controlling the White House, Senate and the House of Representatives. We have industry taking a back seat to government initiatives. Wow what a year. Real estate values have fallen by 30% across the nation and many project more pain to come. Unemployment is now 8.7% and rising. Currently, things are bad to lousy in real estate.
When I started NWJ cos the economy was bad, very bad. High unemployment, real estate values down 50% from their late 80s high and credit was almost impossible to come by. During those years we focused on buying distressed properties that offered immediate cash flow ( we had no choice if it didn't cash flow we would have gone broke). The people and banks that we bought property from didn't want anything to do with the assets. They wanted out badly. Interestingly enough, the governments tax law changes are what almost overnight changed the real estate industry. Because of tax law changes no one wanted to be in the real estate business any longer.
"You buy when the blood is in the street. That little formula has worked miracles. It's just the opposite of what the average guy does. You want to buy [when there is] 'panic' and sell [when there is] 'euphoria.' It's all market psychology. It's all fear and greed." - J.P Morgan
We find ourselves in times like those again. Just ask anyone that invested in real estate between 2002-2007, whose deals are not turning out to be nearly what they had expected.
Now is the time for us to focus on the things that our competition is not able to.
1. Growth - the next 5 years will be unbelievable, opportune times for growing this portfolio.
2. Hire - there a lot of great people out there and we will soon need them.
3. Customer Service - companies are cutting back on what they should be doing most. Although we may not be in a financial position to offer all the bells and whistles (cable, internet, papers, gyms, etc) we can help our residents by just being there for them. Answering questions, helping with financial needs, just offering simple Wow experiences.
4. Staff support - help your co-workers. In these stressful times everyone needs something. Maybe its filling in for a day off, or just a kind word of recognition.
In these extraordinary times we need to find the courage to do the hard things that will propel this company to greatness. I look forward to the next 5 years as times of opportunity and expect great results to come of it.
Thanks for making it happening.
Nick
No comments:
Post a Comment