Freedom has questions, and we want answers from you!
If you’re a real estate investor, we’d love your thoughts on the below. Please send responses to info@freedomfinancialfunds.com for an opportunity to be published in our follow-up piece.
- How housing short is the nation and individual markets?
- Many pundits have been saying the United States is housing short by a lot – will that be the case?
- If so, will rents provide sufficient return to overcome increased capital and operating costs?
- Will cap rates resist moving to a level necessary to achieve positive leverage?
- Will those with a basis based on a sub 4% cap rate avoid writing down asset value?
- If it turns out that household formations are short of the new supply of all housing (for sale, and for rent) as some project, what will vacancy for all housing units look like in 12 months?
- No one knows what the true elasticity of demand is, so like all things in the future, we fly blind.
- Is all the dry powder that was reportedly on the sidelines, still there?
- If not, why?
- Was it debt and not equity?
- How can we get reporting on dry powder to be more accurately reported in the future?
- Given that yield for risk-free assets has changed considerably since much of the dry powder was raised, what is the revised hurdle risk to motivate the investment of these funds?
- Will Pensions and other allocators cut their real estate allocations because their stock and bond portfolios fell?
- If so, how much?
- What will the new yield requirements be for Senior Debt, Junior Debt, Preferred Equity, and JV or Common Equity?
- Will Courts make government entities pay for the property taking that transpired over the past three years?
- If not, will the risk premium change for the impacted asset class as investors gain enough time to reflect on what happened and the risks of it happening again?
- Will the most recent California Appellate Court ruling that limits a lender’s right to collect default interest only on the amount of a defaulted payment and not an entire loan hold up in a Supreme Court appeal?
- Will loan availability be impacted by this ruling? If so, a little or a lot?
- What will the midterms yield?
- Will the House or the Senate flip?
- Will that lead to gridlock and less spending?
- Will the FED ease its rate of increases if it perceives that the Fiscal side of the equation is restrained?
- Will inflation expectations of the US citizen change?
- Will State Legislatures change and if so, how?
- What will the impacts be on property rights and contract rights as a result?
- Will the USA energy policy change?
- Will the USA policy for immigration change?
- Will our political class work to solve problems or continue to bicker and be a problem?
- Geopolitical risks
- Will the Ukraine war escalate?
- Will China make a move against Taiwan?
- Wars change economies and cause inflation, supply chain disruption, agony, grief, and pain. Will the world get safer or more dangerous in the next year?
- Will supply chains remain in peril?
- Black Swan
- There will undoubtedly be events no one predicted. Will 2023 be a relatively calm or eventful year is anybody’s guess!