WS1857 Why This Cycle Might Be Your Last Predictable One | Jeremy Roll

In these uncertain economic times, the real estate market can seem like a rollercoaster ride. Is it a crash or an opportunity? We're here to break down the complexities and reveal strategies that could help you thrive amidst the turmoil. Join us as we dive into the insights of seasoned investor and industry insider, Jeremy Roll.

Jeremy brings not only his expertise but also a unique perspective on the current downturn. He's banking on the possibility of a further recession to make his move. Discover his strategies and learn how you can leverage this downturn to your advantage.

One often misunderstood topic in real estate investments is capital calls. We'll help you understand the difference between optional and mandatory requests and emphasize a cautious approach, especially in light of a potential recession on the horizon. Plus, we'll uncover two investment strategies for weathering a downturn.

The first strategy involves tax-abated multifamily properties, which can provide stability and potential returns even during a recession. The second strategy involves investing in non-real estate assets, such as ATM machines. This unconventional approach proved successful during the 2008 recession and could be worth considering in today's uncertain climate.

But what about different asset classes? How might they be affected by a potential recession? We'll explore which ones we believe could withstand the storm, including multi-family properties, mobile home parks, and self-storage. On the other hand, we'll discuss why options like office, retail, and industrial properties could be more risky.

In addition to discussing real estate strategies, we'll also touch on the potential impacts of AI on job automation and social programs. As technology advances, it's crucial to stay informed about how it may shape the future of various industries, including real estate.

So, if you're bracing yourself for the next recession, join us for a conversation with Jeremy Roll, and let's navigate these uncertain times together. Don't miss out on valuable insights, tips, and advice that could help you thrive in the real estate market during economic uncertainty.


Want to connect with Jeremy Roll and learn more about his strategies for thriving in the real estate market amidst economic uncertainty? Email him at jroll@rollinvestments.com to start a conve

VISIT OUR WEBSITE
https://lifebridgecapital.com/

Here are ways you can work with us here at Life Bridge Capital:
⚡️START INVESTING TODAY: If you think that real estate syndication may be right for you, contact us today to learn more about our current investment opportunities: https://lifebridgecapital.com/investwithlbc

⚡️Watch on YouTube: https://www.youtube.com/@TheRealEstateSyndicationShow

📝 JOIN THE DISCUSSION
https://www.facebook.com/groups/realestatesyndication

➡️ FOLLOW US
https://twitter.com/whitney_sewell
https://www.instagram.com/whitneysewell/
https://www.linkedin.com/in/whitney-sewell/

⭐ Be Our Guest!
We are continuously working hard to help our listeners with their journey to real estate syndication. If you think you can add value in any way to our listeners who are in commercial real estate, then we’d love to have you over.
Apply here: https://lifebridgecapital.com/join-our-podcast/

Transcript

00:05 -  Jim Piper (Host)
Welcome to your daily real estate syndication show. I'm your host, Jim Piper, and today our guest is passive investor Jeremy Roll. Jeremy started investing in real estate and businesses in 2002 and left the corporate world in 2007 to become a full-time passive cash flow investor. He's currently an investor more than 60 opportunities across more than a billion dollars worth of real estate and business assets. Jeremy is the founder and president of Roll Investment Group and he welcomes emails to network with or help other investors and discuss real estate or business investments of any size. 

00:39
Today in the interview we talked about how and why Jeremy thinks that real estate has already crashed and why it might go further. He also talks about why he's mostly on the sidelines and not allocating a whole lot of new capital. He talked about how to deal with the capital calls. We know many LPs are dealing with that right now. Jeremy talked about how he would analyze a deal that he might have to contribute more capital into. Then he also discusses what two types of investments he's currently making in this difficult market. With that, let's get to the interview. Jeremy, welcome to the show. Let's start out with who you are and how did you get to where you are today? 

01:16 - Jeremy Roll (Guest)
Yes, Thanks again for having me on. I appreciate it. I hope this is helpful for everyone who's listening. Thank you for joining us. My name is Jeremy Roll. I am out in California near Newport Beach. 

01:27
I started investing passively in manager syndicated opportunities back in 2002. That was a long time ago over 20 years. That was in response to, basically, the dot-com crash. For those of you who are old enough, I was just sick and tired of the lack of predictability and the volatility of the stock market. I was looking for more predictability. 

01:45
Personally, I've been focused on passive, more predictable cash flow for over 20 years. The cash flow got me out of the corporate world back in 2007. I've been a full-time passive cash flow investor for over 15, 16 years now and doing it over 20 years in general. I love the space. That's my primary focus in life. That's what I do full-time. Just a little more background. I'm originally from Montreal, Canada, where I grew up. I have an MBA from the Wharton School University of Pennsylvania. I had over 10 years of corporate experience. My last two corporate jobs way back were last one was Toyota headquarters in Los Angeles before they moved to Texas. The previous one to that was actually Disney headquarters. I've got a lot of traditional corporate experience as well, but it's been a long time since I've been in that world. I'm really focused on passive cash flow investing now. 

02:32 -  Jim Piper (Host)
I'm really excited to have you, because I don't know anybody who's been doing it as long as you have, and certainly not full-time. That's super impressive. I just want to jump right into it and get some of your knowledge here. This is a broad question, but can you talk about how you see the state of the economy currently and then, specifically, as it relates to real estate, what you're seeing? 

02:53 - Jeremy Roll (Guest)
Yes, we're actually recording this on a very interesting day. We're recording this in November of 2023. Just today, the latest CPI information was released. I don't know if you saw it, Jim. Did you see it? 

03:04 -  Jim Piper (Host)
I haven't seen it no. 

03:05 - Jeremy Roll (Guest)
Yes, it actually came in slightly better than expected, certainly not worse than hoped. We're now at a core CPI of about 4%, which is a little bit like I think they were expecting 4.1, 4.2. We're at a general overall CPI. I think it was 3.2. The expectation was 3.3 to 3.7. I think it was. 

03:26
Now, if you look at the odds of the Wall Street bets of the rate hike in December and even in January, literally the odds of rate hike are between 0 and 1% for December, so very low, and even as low as 5% or lower for January. I think that we may have seen the last rate hike. We'll have to see. I am a little skeptical of that, just in terms of being conservative in terms of how things have worked in the past with that, if you try to apply the past to the future. As far as to the economy, I'm expecting a recession, probably next year, especially if that was the last rate hike. Not sure when, not sure how it'll be really bad or not, but I am expecting a very high probability of one. 

04:07
As far as real estate goes, I hate to say this, but I'm going to start saying this on podcast because no one's using the word crash, but in reality that is what has happened to the various real estate asset classes, except for single family, which is in the deadlock of pricing, every other asset class is crashed. What I mean by that is they're all down, mostly 20% to 30% on the non-institutional side. Some may be as low as 15, but no matter what, if I said to somebody the market's down 20% to 30%, do you consider that a crash? There's no doubt. If that was the stock market, it'd be covered as a crash and it'd be all over the media. This has happened on the real estate side. We're in the middle of a crash. That pricing is not like an opinion of where it's going to go. It's the actual, real, factual pricing right now. 

04:49
I think that that's the first of two dominoes that's going to fall. One was the interest rate hikes which have caused these price changes. The second and I'm still expecting is if we have a recession. I'm expecting the recession domino to fall, which typically leads to low revenues, increased vacancy. This is during a time where expenses are going to probably continue to go up. That means lower net operating income and lower building values, along with probably more limited partner passive investors scared to invest during that time of a proper recession and therefore less demand for properties and prices probably will go down. I'm mostly on the sidelines, except for really unique situations, waiting for all of this to play out, or at least to see if it does play out or not. 

05:29 -  Jim Piper (Host)
That was a lot right there. I do want to dig into this. What does this mean for LPs? If you're right that it's already crashed and that there's more to go because if you have the recession you're going to have another part of the crash there's two parts to an LP investor the deals you're already in and the deals you're going to get in, and the ones you're already in you can't do much about. I'd like to hear what you think is going to happen to those deals so we can prepare ourselves. What do we do about the future? I know you're sitting on the sidelines and we've talked about this before where others might need still to allocate capital because they can't just keep sitting. Can you talk about both of those things, the current and the future? 

06:13 - Jeremy Roll (Guest)
Let me start with the last thing you mentioned, which is people who are on the sidelines and maybe can't wait. One thing I would caution people to think about is let's just take it back to the past cycle. If I said to you, Jim, you come to me and say what should I invest in today? By the way, I'm not a financial advisor or anything, so it's just my perspective as an investor. But if you say to me, Jeremy, what should I invest in today, I would answer the question with it's November of 2008. What should you invest in today? Right, because that's from a cycle timing perspective. It's probably it is very probably somewhat similar, right? And so the answer is stay on the sidelines and, by the way, treasuries can still get you, despite the fact they went down a little today. Three to six months, treasuries can get you 5.4% plus, right, and that's actually state tax free, and so that's a good option right now, a very good option. If you have to do nothing, it's not doing nothing, it's actually doing something. That's kind of my point, right? So you are able to deploy capital like that. 

07:11
If you are absolutely hell bent to deploying capital into real estate right now, there's two things I would really have you think about. 

07:17
One is how do you get into a deal that has a basis, in other words a price that is actually lower than the current true market price today, adjusted for everything has happened, so that you're protecting some of your downside risk? Right, and there are some ways to do that, but it's just very few and far between. But I would just be highly picky to target that and I would also caution you to try to invest in an asset class that will be a little more immune to a potential economic downturn, which none of them are really ever really fully immune unless you have very. There are some unique situations that come up with a few examples, but very few and far between. So definitely consider that too if you have to, but just know at least what the timing is and what you might be heading towards so you can kind of pick and choose how to mitigate that. So that's my answer to that, and I know there was a second part to this, I'm sorry. 

08:02 -  Jim Piper (Host)
Yeah, no, it's my fault. I always ask multiple questions at the time. I need to stop that. But the first part was what should LPs be looking at with their current portfolio? There's nothing you can actually do, but what should you be preparing for, perhaps? 

08:15 - Jeremy Roll (Guest)
Yeah, so your portfolio will be different than everybody else's and there's a thousand ways to invest. None of them are wrong. Right, it's just whatever's best for you. So, in your particular scenario, if you have any properties that are coming up for refinance or are in a floating rate loan that it may be going to reset, that may have a challenge, that weren't pre-capped at a certain point, I would strongly urge you, if there is a refinance that requires cash in or a capital call to keep this going, to do proper stress testing of the deal and underwriting to make sure that you agree with whatever is being presented to you by the sponsor in terms of where directionally this is going to go, because I have not invested in any floating rate bridge loan, apartment deals, for example, so I'm not dealing with this. 

08:58
But, as a person thinking about this, if I were to have to deal with this, I'd be saying, oh, maybe there's going to be a recession next year. How's I going to impact this property? I am going to guess that the vast majority, if not almost all, of the sponsors are not going to present to you a revenue base that actually includes going down next year because a recession, or maybe the year after, right? So you may need to take it yourself and ask them to make adjustments to the assumptions or adjust it yourself and then see if you create the scenario that you believe is the most probable. Does that make sense for you, therefore, to then contribute to the capital call or to contribute to the cash and refi, you know, to avoid dilution, for example, or to even avoid it for closure in some circumstances? So if you're dealing with that, I would be very, very careful with the underwriting, because sponsors are not known to present scenarios where revenues goes down in their projections ever, and we do have recessions, and so they're typically not 100% realistic. 

09:49 -  Jim Piper (Host)
So just to be clear, if people are looking at a potential capital call, you basically underwrite the deal as if it's coming new to you. But you put your own scenarios in to make sure that you're not just taking the rosy projections perhaps rosy projections of the operator you're digging in saying, are these realistic? And maybe making your own adjustments from there. 

10:11 - Jeremy Roll (Guest)
Exactly, yeah. It just like looking at a new deal where you're like, okay, someone's giving you a business plan, do you agree with it? And if you don't agree with it, what do you think is going to happen with it? Now, you're in the deal, so you're already in the deal, so it's not. Okay, I'm not going to invest. The question is, am I going to participate in the capital call? That should be based off the assumptions and if you don't agree with the assumptions because you're already in a deal, adjust them and see if, therefore, it's really worth you trying to protect your potential dilution. 

10:35 -  Jim Piper (Host)
And explain the downside of dilution. Right, because there's two kinds of capital calls. One is the one where you don't have to participate, but if you don't there's a penalty and you might get diluted. The other is you have to participate or there's other penalties, which hopefully you didn't invest in those deals because you read the PPM beforehand. So let's just talk about the second one. What does dilution actually do? 

10:57 - Jeremy Roll (Guest)
Well, so yeah, and I've never been in a deal that has those other. I always read the operating, so I've never been in a deal that has that other challenge, right, because I'm very careful. It's one of the things I pay very close attention to when I'm looking at those deals. So, look, technically speaking, a typical capital call is not a mandatory but an optional request to put in capital, and if you don't meet that request, that capital can be contributed for you either by another limited partner or by an outside partner, or by debt, you know. Anyway, it can be basically patched up and there are rules dictating. 

11:31
Sometimes we'll order the sponsor has to go in, what they're allowed to take, what interest rates are, etc. 

11:36
Right, and so there are some circumstances where somebody, you can end up in a position where, if you don't put up your equity, then they're going to take a loan against it from somebody else, and so the next person isn't necessarily getting your equity, but they're taking a loan that they're in a debt position, which is safer for them, and they're actually accumulating interest from your own cash flow, for example, that you're going to owe them or you're going to get diluted further, right, so it's almost like a convertible note where it's actually worse over time, right, and so you do have to pay close attention to what the terms are and take all this in consideration when you're considering whether to put the money in. 

12:07
But I think the most important thing to understand is A it doesn't always make sense to actually make a capital call, no matter whatever anybody else is doing. And, b be very careful with the assumptions and if you agree or believe that we might be going into recession, make sure that those projections reflect that, because if those projections are too rosy and they end up being wrong and now you put in the first capital call and now you're being asked to put more money in in a year or two Because the rents didn't go and the expenses went in a certain way that they weren't projecting, that could be yet another place where now you're putting in more and more and more money where it didn't make sense to put any money into begin with. 

12:42 -  Jim Piper (Host)
That's great advice and hopefully you know everyone's read the PPMC, you understand what's happening before you get that capital call and then the key is to make sure you actually underwrite that as new and make sure that the projections make sense. So you know, you mentioned except unique situations right, that you're on the sidelines now and accept unique situations. You also mentioned there might be some asset classes that are semi immune, or you know, to a downturn or less affected by a downturn. Can you talk about some of those asset classes and what things you might be investing in, even though you're mostly on the sidelines? 

13:16 - Jeremy Roll (Guest)
Yeah. So first thing I'll say is that I'm considering two buckets of opportunities right now, so to speak, or two verticals. One is, like I mentioned before, some unique situation where I can go into a real estate asset that is so much under market value that it creates enough padding where I don't have to worry about a price adjustment from here. And so one thing I've been doing actually, you know, throughout the past few years since the pandemic start is investing. The only multifamily I've done, for example, is all tax abated, and the purpose of that was a defensive play, going into recession along with adding extra padding at closing due to switching it from a market rate deal to tax abated deal. So, without getting into too much detail, that typically creates a ton of padding at closing so that the value of the property can go down further. And yet there's been so much built up equity because of the chains and structure that we're probably going to be in an okay place. So that's a defensive play, along with the fact that tax abated buildings typically converted to 50% income restricted. That means that you're going to be lower rents than most of the other market rate buildings, so you're going to be the most in demand because you're going to be at the lowest rents during a difficult time and therefore you may hold on to your renters for longer and have more demand for rental units compared to all the other buildings in the area. So it's a defensive play, but it's also a play where actually you have a ton of padding at closing. So that's one example. 

14:29
On the other bucket that I'm considering is items where I don't have to worry about the asset price decreasing. So that would not be real estate in most cases, but I'm going to give you an example because it's a real life example. I've been investing in the past few years. Just made an investment in August. I've been investing in ATM machines, which is basically a cash flowing business, right with no real estate asset, since 2008. And I went through the last downturn because I invested in January 2008 to see how it does in a recession. And so my concern about that ATM investment is is it going to do well during a recession? Because that's what I think is coming up right and they tend to hold pretty well in my experience during recessions. 

15:05
I'm not worried about depreciation. Those are a case and a bill feeder and a computer and a screen and a keyboard. Those are all depreciating to almost zero anyway, right? That's a very different view than real estate, where you're actually trying to invest in it, appreciating or at least holding its value asset, which may have a challenge in the next 12 months, like we talked about. So those are the two buckets either some unusual, unusually price situation to as defensive play for real estate, or some business that I think will do well in a recession. So I'm more worried about the continuity of the cash flow during a recession as opposed to depreciation. That I don't have to worry about. And I think there was another question in that question. 

15:40 -  Jim Piper (Host)
Yeah, I did it again. I was asking about asset classes that might be less affected by a downturn. 

15:47 - Jeremy Roll (Guest)
Yes. So if you're looking at real estate asset classes, for example, often some of them are less affected. Now I'm going to start off by saying that there is a lot to consider. There are the case, location to consider, there is supply to consider. Going back to multi-family, and a lot of people look at multi-family. There is a ton of supply coming online but impacting very specific cities and I'm not impacting other ones, right? So the first thing you want to do is look at supply of what you're about to invest in and see that may impact Supply, demand kind of forces going into the next one to two years. Number two is I would say that Look on average and again it's gonna depend on location. You have to have a sponsor is gonna execute Well, etc. There's a lot of factors to consider but on average, multi-family tends to hold reasonably well. It still goes down, but it holds well. Mobile home parks tend to hold pretty well during a recession and self storage tends to hold well during a recession where you can get a little bit less predictability because I'm all about predictability in the way that I invest is Certainly right now office. 

16:45
Nobody really knows what's happening with it to begin with, let alone what happens of recession kind of layers on on top and compounds that retail. Often that retail is interesting because if you go into the right retail center you can go into almost counter recession type of a rent roll, so tendency. So, for example, if you invest in a, in a I'll give you the classic examples you invest in a retail strip center that has a furniture store and what's another like high-end selling, high-end chandeliers, and you know all these things that will not do well in a recession. That's not a good idea. But how about a retail search center with a very strong grocer that's doing a lot of Revenues per square foot, along with a gym that people are still gonna use it's a lower-cost gym Along with a 99 cent store and a subway restaurant. Right, you start to see the trend most of those businesses, if not all them, are gonna get through recession. 

17:37
Okay, so if you're gonna look at that asset class, you've got to be really picky and go into it as a defensive play into recession based on the rent rule. Right, there's other factors to consider, of course, where the value of the property can still go down, etc. But but just know that it as well as the fact that if the rent rule. If a lot of the tenants are renewing at this timing, they may have a lot more negotiating power, because during recession there is negotiating power, right. So but but I would say, on the on average, retail can be a little bit dangerous. 

18:05
Office is dangerous, industrial is is actually, interestingly enough, also somewhat dangerous in recession and again, depends on a location, a lot of factors. But if the economy slows, we have recession. That means there are less goods being shipped. That means we end up with some vacant and foreclosed type industrial buildings and those are kind of shells, like they're. Those tend to be very volatile with their rents because they're just a little shell. The box are all similar in most cases. So that means that the rents drop very quickly in that asset class during a recession and that can impact you very quickly. It's not your facility could be the one next door if you're renegotiating, at least at that time that could be challenging, right? So those are just some examples. The point is is that think about each asset class you're considering. You may want to actually create your own list and target very specific asset Classes if you're hell bent on investing right now. 

18:50 -  Jim Piper (Host)
Yeah, that's great stuff, and so we're talking a lot about the recession that that's possibly coming, and it feels like that's been a conversation that's been happening for you know, a couple of years, like it's just around the corner. We never quite get there, yes, so you, you're kind of predicting maybe next year we get there. So can you talk about you know what happens when we get there, but more importantly maybe, and more interestingly, what happens after and how long is it going to be until after? 

19:18 - Jeremy Roll (Guest)
Yeah, great question. So, um, First of all, it's very difficult to know how difficult, how bad, our session is going to be, and what's making it even more difficult right now Is all the stimulus we had, which is now kind of gone, made everything artificial. So just take a step back for a second. Why was this recovery so long? We had a record long cycle. We just went through it right in 2018. Trump had passed some stimulation measures that were not normally put forth during that timing and he extended the the cycle by a little bit, by a couple of years, based on, you know, my opinion and probably a lot of others. Then, during the pandemic, we were in 2020. Based on the inverted yield curve, we were about to have a recession most likely from a probability perspective, that year, if not 2021 and then we had trillions of dollars printed for stimulus, and that just pushed kick the can down the road until what we're talking about today, because literally most of the stimulus dollars have now been spent by most strata of consumers by this fall, and so that's why it's taken so long. It's been very artificial. Now there's some indicator showing, for example, 100% of the time once unemployment has ticked up 50 basis points or higher from its bottom lowest level, which is actually done. We we bottomed out of 344 percent. We're now at 3.9 percent. 100% of the time the past there has been a recession. So if we do not have a recession this time, it'll be the first time ever, right? So you kind of you have to look at some of this data and to get out of the weeds in the media and understand what's going on. I'll give you another data point, which is typically 11 months after the Fed, on average, stops raising rates during a raising rate increase period prior to recession. That's when the recession begins, on average, 11, 11 months later. Of course that can vary, but that would put us from last July until next June. That's why the midpoint of the average of what you do when you expect the recession to start, would be actually next summer, in the June, but it won't probably be exactly June and it might be, could be, but it could be anything surrounding that, plus or minus. That's why I'm expecting a recession next year, for example, and again, I don't know how bad it's gonna be. 

21:18
I can tell you that this particular Situation we're dealing with impacting real estate investors Tremendously because of the interest rates. I mean there is just true carnage going on left to right and everywhere in real estate right now Because of the. There were two factors that caused this. One of the I've been talking about for years is that when you have cap rates that low, it takes, you know, a cap rate at four, it takes like it's twice the magnitude, going up a hundred basis points, and a cap rate at eight going to nine, four to five, eight to nine. And I kept telling people there is a huge danger, given where cap rates are, that if they adjust, it just gonna have a magnified effect because how expensive things work. That was one problem we've had. Now, okay, and that's actually one of the reasons why we still don't have positive leverage. 

22:01
Cap rates haven't caught up to interest rates, because interest rates went up so much and the cap rates were so low that nobody wants to get burned by having to sell it the real market price. It's needed for LPs to come back in, and so that's what we're waiting for, right? It's taken a long time to adjust, and so I think that if we were to have a recession, you should expect rents to go down, vacancies to go up across most asset classes. You should expect expenses to continue to increase. In this environment, you should expect net operating to go down. Net operating income to be lower in a building. So if you invest in a building in December 31st of 2023, there's a good probability that it'll be worth less in December 31st 2024, all things being equal, same multiplier, same cap rate because of revenues potentially going down and expenses continuing to increase. We're gonna layer that on top of a lot of distressed sales coming up, especially a multifamily and office. 

22:50
A lot of stuff will end up in major distress in 24 and 25, based on when loans are coming due, and so if you're looking at those two asset classes specifically, it's specifically a dangerous time for those. 

23:02
And then, as far as the recession goes, typical recession six to as much as 18 months, just on average, and so that part is hard to predict. 

23:14
I can tell you one thing, though with interest rates have gone up as much as they have, that is impacting consumers ability to get loans and refinance loans and buy nicer cars and do all kinds of things. Right. Credit card rates, interest rates are very high. Credit card uses it as a little record, and the worst part about all this is that, even if we get inflation back down to back to the 2%. We've now taken a step up and that isn't going back. And what that step up does is it actually reduces everybody's standard of living, and most common items have gone up 25% in the past three years 8% a year on average, right, non-compounded but and so you're looking at like in the past you would have expected to go up about 10% over three years. So we have a 15% lower standard of living on average, if you wanna call it that, because of all the money that was printed and everything that happened we're not coming back from, unfortunately. 

24:08 -  Jim Piper (Host)
Wow, that was some good stuff. So we're expecting maybe probably a recession in 2024 that will last, probably into 2025, most likely. So then we're talking about after that, the next 10 years. What are the best asset classes for the next 10 years? How do we position ourselves to be ready to get into that? Because hopefully those are happier days to come, so we just gotta get through. People say, stay alive till 25, right, so let's say we do that. What's coming up for the next 10 years? I know it's not a crystal ball, but just kind of what you're seeing and thinking. 

24:43 - Jeremy Roll (Guest)
Yeah, yeah, so next 10 years. So the good news is, if you start investing in 24, 25, and you're able to get in at these great prices when they occur, then you're gonna have the win of your back right, there's nothing like starting. If you start investing in 2009 or 10, you would have had your win of your back. It's the same concept. So, first of all, best asset class for the next 10 years really depends on what you're targeting and what your strategy is. For someone like me who is looking for more predictable cash flow and predictability, I'll be targeting is what I call my tier one apartments, mobile home parks and self storage, just because I feel like they're the most in my mind. They're the most predictable. If I think, 10 years out, where are those gonna be? That's just a subjective opinion, but that's what I'm targeting right. My tier two will be some other stuff that we talked about. I don't know how much I'll be doing of that, but if there's some type of unique, tremendous deal, there's something that can always make sense, and I can give you examples of where, like, even an office building can make sense. By the way, on a 10 year period, if you've got like all government tenants or if you're like here in LA, if you happen to own all the buildings on UCLA medical campus, that's not going anywhere, right. So just for example. So there's always unique opportunities to look at as far as the economy goes. 

25:51
So I am concerned and this is gonna sound a little weird because this is my own opinion, I'm not read it anywhere but I am concerned that, based off of all the money printing that has happened, that, as an investor looking for predictability, this will be my last fully predictable cycle, meaning that it's the last time I think we're gonna positive, predictable GDP growth over the course of the entire typical. So I can wake up in 2025, if the cycle is reset, and say there's going to be positive GDP growth this year and then a year after and a year after, I feel like it's going to be between 0.5 and 2 percent on average per year. By the way, all this can be changed by crazy stimulus, but putting that aside, I feel like it's going to be between 0.5 and 2 percent per year. Structurally, because we have so much debt, the debt overhang is not going to allow us to grow at a higher clip. By the way, that number was 4 percent potential in 2000,. 

26:42
2010,. 3 percent potential in 2010 to 2020 because more and more debt. Now I think we're at 0.5 to 2 percent and when we're finished that cycle, I think if we continue along the money printing which I think is the highest probability we're going to end up as like Japan, which has been like plus or minus 1 percent GDP growth for decades without even knowing what the next quarter is going to happen, and that's not good for someone who's looking for predictable cash flow like me. So I do think this might be the last predictable cycle of growth that I have as an investor in a type of investing that I do. We'll have to see if that is true or not, but I'm definitely concerned about that. I know it's an odd thing to say because I've never really heard anyone else say it. 

27:18 -  Jim Piper (Host)
So yeah, that's really interesting and made me think of, you know, other times where there's been interesting cycles, you know, in the late 90s, 2000s, and then the internet came along and kind of it fundamentally changed the way we operate. So you know this, that we're kind of getting to the times. This might be the last question, but do you see the AI artificial intelligence and that maybe changing things so that there's more automation and maybe that kind of digs us out of our hole? Or am I just hoping that happens in projecting? 

27:50 - Jeremy Roll (Guest)
Well, yeah, like I'm not an AI expert, I can say two things. First of all, ai had a nice little bounce in the stock market recently and I just read an article this week that, like it's interesting, there's actually a negative. Someone did a study. There's now a negative correlation between a company's stock price and the amount that they discuss AI in their quarterly reports at the moment, which is interesting because, like, people are literally now thinking it's been overdone. 

28:11
That being said, what I think is the most probable outcome of AI, if it actually does become more and more prolife rant everywhere, is I'm concerned that our US society and I'm from Canada is heading towards more and more social programs, because I feel like jobs are going to be much more difficult to get, they're going to be automated and I think that we're going to have to print more and more money to support more and more people who cannot find a job. 

28:36
And that is just, if you look at kind of an empire cycle and the fact that the US, if you look at Ray Dalio and he talks about this a lot we're in the stage now. 

28:46
We're following the exact playbook of an empire's decline and one of the things that happens at the end is more and more money printed to try to keep everybody society like without writing and civil. And one of the ways you do that is you print money and hand it out, whether it's universal basic income, whether it's more safety net, social safety nets for people who are unemployed, et cetera, and we're kind of heading in that direction. I think that's the most probable scenario for the next 10 years. On that piece as real estate owners, that's not necessarily a bad thing, because that means that person will continue to be able to afford the rent of whatever they're living in and to be able to continue to afford to put money back into the economy et cetera. But keep in mind, our standard of living has been structurally permanently adjusted, so it's very important to consider that as well. 

29:29 -  Jim Piper (Host)
Yeah, that's great stuff. This has been a really awesome conversation. Jeremy Really appreciate it If listeners are interested in learning more about what you do or what's the best way to connect with you. 

29:38 - Jeremy Roll (Guest)
Yeah, absolutely. Anyone is welcome to reach out to me. I'm happy to help anyway I can for everybody. So easiest way to reach me is my email, which is J-R-O-L-L at Roll Investments, r-o-l-l. Investmentswithanscom, so J-Roll at Roll Investmentscom. 

29:54 -  Jim Piper (Host)
Excellent. Well, thank you very much, Jeremy. We appreciate having you on the show. 

29:57 - Jeremy Roll (Guest)
No problem, thanks for having me. Thanks for everyone who listed until the end here. Hopefully this was helpful for you. 

30:02 -  Jim Piper (Host)
Excellent, thank you. Thank you for listening to the Real Estate Syndication Show. It has been a pleasure to be the guest host today. If you'd like more information about left field investors and how we educate limited partners, provide a network and give access to deal flow, please visit leftfieldinvestorscom. Reach out to me directly at jim at leftfieldinvestorscom. I hope you learned a lot from the show today. Please don't forget to like and subscribe and share the Real Estate Syndication Show with your friends so they can also build wealth in real estate. You can also go to lifebridgecapitalcom and start investing today.