Residential real estate is the name of the game to combat hyperinflation

Recently I discussed why I am doubling down on real estate exposure in my personal wealth by taking out a large loan to buy a condominium. I discussed it in below link:

You can read more in detail in the below link, but high level view is that while rising interest rate is pressuring short-term price on housing by dampening demand (people can’t afford to pay more), the value of homes is going up because of inflation in the prices of the raw materials of those buildings – THE REPLACEMENT VALUE IS GOING UP

today – we saw another landmark deal that essentially confirms my view on the prospect for real estate market.

I don’t have much resources, but I like to follow smart investors that have significant resources and political networks. One of them is Blackstone – a savvy private investor with very strong track record in private equity and real estate

this week, Blackstone announced acquisition of PREFFERED APARTMENT FOR $5.8BN – THIS IS A HIGHLY BULLISH BET ON RESIDENTIAL REAL ESTATE MARKET.

Below slide from Preferred Apartment investor presentation that show good overview of the real estate portfolio.

IT IS A HIGHLY DIVERSIFIED RESIDENTIAL REAL ESTATE PORTFOLIO – ACROSS 34 MARKETS, 13 STATES, AND 100 PROPERTIES – THIS MEANS THAT THIS IS A BULLISH BET ON RESIDENTIAL REAL ESTATE MARKET OVERALL NOT A SPECIFIC BET ON PARTICULAR GEOGRAPHY.

While implied replacement value is going up, the cash flow is improving from residential real estate – reflecting the appreciating value of homes that is not getting captured in short-term price dynamics. Single-family rent is up over 10% Y/Y.

I remain highly bullish on real estate market. I have largely exited my equity portfolio (outside of 401K and high growth mutual funds like Baron Funds) and I am shifting gears to more REAL ASSETS like apartments, gold, and Rolex watches.

If you are interested in the rationale for investing in gold, please read below article:

If you are interested in rationale for investing in Rolex watches, please read below article:

*not investment advice