When the Dealer is Hot, You Leave the Table
Today’s Stock Market Feels the Same
If you’ve ever played Blackjack, you know: when the dealer keeps pulling 21, it’s time to pick up your chips and move to another table.
That’s exactly where we are in today’s stock market.
Good news is scarce—and when it does appear, rallies turn into selling opportunities. Investors are asking the critical question:
Where should you move your chips now?
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Gold is selling off.
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Crypto is stuck.
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Neither pays dividends or interest.
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Treasury Bills and Notes offer 4.3% yields (1–3 month maturities).
The Federal Reserve has signaled no immediate rate cuts. Stability is elusive.
Meanwhile, traditional hurdles are growing:
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Mortgage rates remain in the mid-6% range.
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Insurance costs continue to climb.
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Job security is wavering—even government and Silicon Valley jobs are at risk.
Home listings are rising. Cancelled and expired listings are mounting.
Even fix-and-flip investors are getting cautious, bidding low to protect against rising holding costs.
Where Smart Money is Moving: Multi-Family Real Estate
Today’s investors are aggressively shifting into Commercial Multi-Family Housing—and it’s easy to see why:
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Rental markets are strong: Renting is safer than buying today.
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Demand is accelerating: Last week I identified 14 potential 5–15 unit properties for an investor. By Thursday, only two remained—under contract.
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Stable returns: Multi-family income outperforms Treasuries with upside potential and tax shelter.
Sample Yields:
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Peninsula properties: Net Operating Income (NOI) averages 4.5%.
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San Francisco: NOI ranges between 5.5%–5.8% in desirable neighborhoods.
These yields match or exceed Treasury Bills and offer appreciation upside—something T-Bills simply can’t.
Why Other Commercial Assets Are Struggling:
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Bank branches, fast food outlets, pharmacies: Increasing closures leave property owners with empty buildings and no cash flow.
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Office buildings: Flooding the market, with many being converted into low-income housing projects.
In contrast, Multi-Family Housing remains a safe harbor for investors.
The Economic Backdrop is Clear:
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GDP Q1 2025: -0.3% decline (expected +0.4%).
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PCE Inflation: 3.7% (up sharply from 2.4%).
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Jobs Report: 177,000 new jobs vs. 133,000 expected.
A second consecutive negative GDP will confirm a recession.
Inflation pressures make rate cuts unlikely—despite what media chatter may suggest.
Smart investors ignore media noise and focus on fundamentals.
Summary:
Income-Producing Real Estate is the Safe Option Right Now.
Recent PacWest CRE Listing (SOLD)
1635 Clay Street, San Francisco
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🏢 $3,650,000 Sale Price
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📈 5.8% CAP Rate
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🏠 10.8 Gross Rent Multiplier (GRM)
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💵 $260K per unit
👉 Book a 15-minute Commercial Real Estate Consultation
Schedule Your Call
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