Banker Questions From Book Recommendation – Part I
1. Where do you think we are at in the 18 year cycle?
2. Do you think the events of covid push us back in the cycle like the wars did in the early 1900s?
I got asked these two questions by a banker relationship I’ve got here in Kansas City.
The reason why he asked me these questions is I had recently gifted him a book I had read in 2014 that completely changed my thinking regarding real estate investing.
Now this book is almost 450 pages of history. It is a dry, not necessarily a “fun” read.
However, it has made all the difference in my life. And it provides me the framework to actually be able to TIME the real estate market.
I decided more people need to learn about this information as it is just too important. You don’t need to read the book but you can follow me as I share more details.
And it applies to EVERYTHING because we are a rent seeking world and EVERYTHING gets capitalized back into the price (e.g. the “rent”) of land.
I’ve had to create two articles because it was too verbose for LinkedIn articles apparently!
The two questions are probably on your mind as well:
1. Where do you think we are at in the 18 year cycle?
2. Do you think the events of covid push us back in the cycle like the wars did in the early 1900s?
=== Below is my (edited for anonymity and clarity) response: ===
Glad you enjoyed the book. I believe we are just before the “winner’s curse” phase.
On page 360 there is the real estate clock – we are about at 14:00 on the outside of the clock.
List of Tall Buildings on Wikipedia – Scroll down to the list of Buildings under construction (https://lnkd.in/d8_mzCPj). Search for years when completion is 2024 and 2025 – it’s over half and a vast majority of the other half have a “?”.
Also, not only the tallest buildings but the biggest projects is something to watch. NEOM (https://lnkd.in/dXnmht2F) being built in the Middle East (amongst what else has literally been created from sand there) is something to watch.
You have sports teams trading ownership at the highest prices ever, even with adjusted for inflation numbers.
Look back to late 2017 and 2018 – go look at your loans that the bank did. Was volume lower? There was less interest in the market because “prices” were higher then, relatively speaking.
We were due for a slow down in 2020 anyways. All covid did was accelerated the decline which caused a massive springboard back to reality, and then beyond because of the intense built up tension that covid and lockdowns created. That is why the decline didn’t last very long – it purely was not TIME for the decline to last very long. I really cannot state it any more simply than that.
=== I’ll end part one here and we will take a look at the past 2-3 years and most importantly WHERE TIME will take us into the future in the next part. ===
