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2021 Real Estate Market Update – Levine Capital

We are excited to move into 2021 with optimism for a speedy recovery. We are hopeful our nation will benefit from the collective strengths, federal support, and not to mention the vaccines.

Moving past 2020

A hedge fund manager whom I met last October recommended a book entitled “The Tao of Warren Buffett.” This is such an eye-opening book that delves deeper into Buffet’s worldly wisdom. A key takeaway from this book that we find worth emphasizing is that the greatest secret to getting rich is empowering your money to compound for you. Taking advantage of tax-sheltered vehicles can help accelerate the compounding in your favor: variations of IRA and 401(k). Even further, a self-directed IRA and solo 401(k) afford you increased flexibility with many alternative investments such as real estate beyond pre-selected offerings. It’s also important to take a close look under the hood and learn what hidden fees are there as they erode the power of compounding in the long run. Whatever investments you are attracted to, it is essential to always remember…as Warren says, “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.”

Tei and I believe that throughout 2021, Investors broadly expect stocks to rally this year as the rollout of vaccines and fresh government spending help the economy recover from the disruption caused by the pandemic. Investors expect volatility in the coming months in the midst of risk stemming from high valuations in parts of the market, elevated coronavirus case rates, and political uncertainty following the recent attack on the Capitol.

The U.S. economy is poised to add more jobs this year than any other on record dating back to 1939, although the expected gain is unlikely to fully replace losses last spring when the coronavirus pandemic first took hold. Economists expect hiring to start slowly gaining momentum later in 2021, as the Covid-19 vaccine becomes widely available. The $900 billion in enhanced unemployment benefits, aid to business, and other relief enacted last month are also projected to boost the economy. Economists suggest that the speed of the economic recovery would be far faster than the two previous recessions in this century. With that being said, it could take another year or longer for job growth to overtake those losses.

Why Real Estate

The specific area of focus is on investing to achieve high returns and lower risk over long periods of time. During the transitional year ahead, one investment that continues to achieve these goals is real estate. High-net-worth investors (HNWIs) are putting more money to work in real estate investments. What is clear is that a majority of HNWIs continue to see opportunities ahead in commercial real estate. Billionaire Andrew Carnegie famously said that 90% of millionaires amassed their wealth by investing in real estate.

What’s next for 2021

We are excited to announce that the Aggregation Fund is now offering attractive monthly tax-sheltered income which includes up to a 12% annual preferred return distributed monthly with a 21% total target return over a 5-year hold, with a potential liquidity option exercisable after Month 30.

My father, Dr. Stewart Levine recently invested an additional $1,000,000 into the fund.

You read that right. This is not a misprint.  And of course, we can always provide him as a reference.

International Investors

Tei Kim, Partner at Levine Capital is seeing pent-up demand from investors in Korea. We are in the midst of opening up a platform for foreign investors!

Upcoming Webinar

We are thrilled to host another webinar in January: How Capital Market Improvements Have Primed Private Lending and SFRs for Rapid Growth. How much capital is available in the market and costs of capital are paramount as capital effectively provides the lifeblood to real estate as a whole.

In our webinar, we are inviting Justin Parker, VP of Treasury from RCN Capital, to discuss how private lending has evolved, making positive impacts on overall real estate. We will also dive into the aftereffects of COVID in the industry. Most importantly, you will learn where future opportunities lie in private lending and how to capitalize on them to your investment advantage.

Please CLICK HERE TO REGISTER and make sure to save this event in your calendar.