With rates now hitting 4% + for most loans before the Federal Reserve System (the FED) makes any moves, there is a lot of talk on how that may affect the market. Higher rates mean higher payments, and this will compress yields.

We are happy to report that we had an incredible 2021, and we would like to take a second to dissect why that was. Also, we want to consider what we see for 2022 and the impacts on our business moving forward.

Today there is a lot of talk about how rents are going up each quarter like they normally do over the course of an entire year. We have seen those kinds of rent hikes in real-time. We feel that what is going on with expenses due to inflation is not discussed enough.

Great podcast episode that really goes through our background and how the business came to be. The hosts asks Jonathan great questions that really bring out his story.

Debt markets and where it is today has been a hot topic. Rates are at the lowest they have been ever. This, in large part, has been fueling the significant price gains we have seen in the last 18-24 months. A lot of COVID loan restrictions have now been lifted. We try to absorb what’s going on in the market to make adjustments in our own business.

Real Estate, believe it or not, is cyclical. It ebbs and flows, which is usually affected by the general economy. So, it's not a question of if but when for us. The future is not exactly like the past but it usually rhythms.

We have discussed before how the real estate investment business is a team sport. This team generally consists of our property manager, brokers, attorneys, CPAs, etc. However, one team member we haven't touched on yet is the partner in your firm or for that particular deal. In many respects, this person is your most important partner. And the truth is, that partner could make or break a deal as well.

When purchasing a new property, we always intend to close without asking for any credits. Sometimes things arise during the inspection process that cannot be resolved or would make it a terrible deal. We feel as though we are fiduciaries of our investor's capital before they even give us the money. Yet, there is power in the ability to say no, even when we are incentivized to say yes.

Recording of our CPA Ted presenting on the different tax incentives with Real Estate. How most passive investors can best utilize them.

This is a look back on Jonathan’s 20 most popular and valuable tweets in the last year. We hope you find it as valuable as some others have.

This was an interesting week where we made connections with sellers in interesting ways. The only reason that is happening is that we are becoming so entrenched in the OKC market. We are also just always thinking outside of the box.

Last week, I, Jonathan, had the opportunity to attend a great twitter Real Estate conference in Los Angeles. I got to meet investors from all over the country and in almost every asset class. I even got to meet some passive investors and one involved in one of our deals. It was just so cool to meet people I had interacted with online for so long. It opened my eyes to how to think of our business, potential collaborations, and what other asset classes have to offer. It was just an all-around good time talking about all this real estate stuff that we love.

Here at JB2, we use depreciation creatively to offset a lot of the income we are making on the buildings. We also utilize bonus depreciation to further take advantage of the depreciation. Part of the reason our goal is not to sell but hold very long term is to avoid depreciation recapture.

Real estate is in our blood and we have been around the industry for all of our lives. This has had a significant impact on how we view the world and business. It was instilled in us at a young age that real estate was the best path for long-term wealth. And, we have been able to use these lessons in life to forge the path in our real estate business.

At JB2 Investments, we are the ones that dictate the business plan and the direction of where our business goes. However, without our property manager (PM) our plan just can’t be executed. Our property manager takes care of day-to-day operations on-site and is an integral part of our team.

We recently published our interactive map with 2050 projection data for all MSA’s in the US. First, let’s describe what a Metropolitan Statistical Area (MSA) is. It essentially groups the main city with its surrounding communities as a region for mainly demographic purposes.

Leverage is important when it comes to financing deals but relationships with brokers to get in front of more deals is more so. At JB2 Investments, we use leverage in every facet of our business.

In this business, our lifeblood is the ability to find new and sound deals. You can analyze deals any which way and push rents and do other things to make any deal work. But in this business, we have to have a lot of discipline and patience to make sure to enter the right deals. For the JB2 Investments team, that patience and discipline are well worth avoiding the pain of being in a bad deal, especially if we have any investor money on the line. It is a true challenge that we endure daily.

One big challenge many people encounter when working in a new area or embarking on a new large project is finding the right people to do the job and do it right. We have a ton of experience doing large projects with different vendors/contractors. So, we will go into some best practices of how to find the best contractors.

As you all know, the real estate business is a team sport and there is no way to go at it alone. The quality of the people that comprise that team can make all the difference. Here at JB2 Investments, the core team consists of Jeff and Jonathan, but we have a whole slew of vendors that support us, including a CPA, brokers, lawyers, managers, contractors, insurance agents, etc. Without these vital partners, we would not be successful. And to be honest, without these partners, our investors wouldn’t be successful either.

So, let’s dig into why these team members are so important to our ongoing success.