Brexit stands for the British exit from the European Union. The surprising defeat of baby boomer voters in England to exit the EU after forty years is a referendum that roiled global markets, including currencies, causing the British pound to fall to its lowest level in decades.

The European Union was 28 countries founded in 1957, and its original aim was to prevent wars and strengthen economic bonds. Simply put The EU was a real estate play designed to protect the members property and businesses but I will come back to that later. Clearly the people of England don't feel protected today and voted to go it alone and I believe this is going to greatly influence real estate investing in America.

Clearly we are entering very uncertain times as I have been suggesting for some time now. Spain, Greece, now closer to home, Puerto Rico all burdened with debt. Unprotected borders in Europe allowing millions of migrants threaten the jobs and economics of people throughout Europe. On June 24, England took an unprecedented and historic action to exit the EU and be free to make decisions best for them. You must do the same now.

And the effects were immediate and will be long lasting. Today gold had its biggest move in two years, the pound hit it lowest level in seven-year low and the Treasury Department said anticipated rate hikes are off the table through year end. Consider if you live in London when you woke up this morning your groceries got 15% more expensive overnight. This is most likely going to throw the world economy into slower growth possibly even recession.

Those with money will seek to put that money in safe havens and I believe a great deal of that money will find its way to income-producing real estate assets in America as investors worldwide seek to protect their wealth and get cash flow.

By now you know how I feel about income producing properties (apartments). I have been quoted saying, "over the next decade multi-family real estate will prove to be one of the best investments of our lifetime." And I put my money where my mouth is. I currently own almost 4000 apartments for myself and allow very close family and friends to invest in, that I personally oversee the purchase and management.

Last year for the first time I saw a tremendous amount of competition while buying deals throughout the Southeast USA. Europeans, Japanese, Canadians and South American buyers pushing up the pricing of apartment deals. That will continue to producing record prices and with Britain electing to leave the EU, I believe this will may accelerate.

If you are in a position to do so you should consider multi-family investment properties at this time. Here are some excerpts from a short article written by my friends at Axiometrics (an apartment data services & student housing market research assists investors, developers, & property managers.)

"Great Britain voters decided on June 23 to leave the European Union. The somewhat surprising 52%-48% result — the "remain" side had a narrow lead in the final pre-vote polls — was capped by Prime Minister David Cameron's announcement that he would resign.

Analysts are mixed about the effect the “Brexit” from the EU will have on the British economy, but the decision could make an impact on apartment investment in the United States, Axiometrics economists say.

International investors have been increasing their holdings in the U.S. over the past several years, as they have gained a better understanding of the American apartment market and appreciation of the sector’s profitability. Before recently, the idea of professionally managed properties of 300 units or more just didn’t translate.

But international investors sunk $16.3 billion into U.S. multifamily in 2015, about 11% of the record $150 billion worth of transactions in the sector, according to Real Capital Analytics (RCA). While Canadian investors provided the lion’s share of that international money ($11 billion), those from Great Britain had the second highest concentration at $2 billion.

The Brexit could decrease the value of British real estate, at least in the short term, as the United Kingdom attempts to first negotiate its way out of the EU, then seeks new trade deals on its own. That could send British speculators looking for someplace safe to spend their investment pounds and shillings, and the United States has one of the most attractive apartment markets in the world, according to Axiometrics economists.

Multifamily – comprising apartments, condominiums, student housing, senior housing and other products – is one of the five primary commercial real estate sectors, along with retail, office, industrial and lodging. The sector accounted for 25%-30% exposure of all commercial real estate portfolios in 2015 and the first quarter of 2016 – meaning multifamily is bringing in more than its share of investment compared to other sectors.

Meanwhile, the U.S. government made international investment in America easier by easing the tax burden on many of these deals. For example, a non-U.S. investor can now own up to 10% of a REIT before incurring federal taxes – up from 5%. This December 2015 action also exempts certain foreign pension funds from taxes from their U.S. property holdings.” Full article click here

What does all this mean to you. If you have money saved, invest in only hard assets that produce income. Stay away from stocks you have no control and they will roll over from these current highs. I sold every stock I own earlier this week.

If you love the real estate angle start learning everything you can about income producing assets - apartment complexes. It is vital you start creating multiple flows of indestructible income in addition to what you are doing now. I talk about this in my newest book, The Millionaire Booklet.

When you start investing in apartments there are three basic ways to do so, 1) buy your own deals, 2) invest in a REIT (hate this idea) and 3) find someone you trust who is already invested and see if you can buy some of their position in deals they are already in. This is a brilliant way for an investor to protect their investment.

If you buy your own deals stay close to home and know what you are investing in. Start with a minimum of sixteen units. Avoid single family residence (homes) and condos and only buy multi-units at one address. The second way, the easiest way is to simply invest money into a real estate investment trust. I hate this idea as you are buying shares in a company run buy guys who get paid for raising money not for managing real estate.

The third option is to find someone you know who is already invested in apartments and purchase a position in their deals. For instance, I have allowed very close family and friends to buy parts of my deals. They purchase part of a deal I already own and I take a piece of their upside in the deal for running it. I run all the operations and they know their money is being treated right because I have more invested in the deal than they do. (To protect yourself make sure that person has more invested in the deal than you do.)

There are so many indications the multi-family apartment investment space will continue to be good:

75million baby boomers moving into retirement.

Many of today's apartment complexes will be converted to retirement communities in the future.

80m millennials have little or no interest in buying a home and will rent apartments.

It's getting more and more expensive to build new units.

400,000 apartments built last year, and one million new renters.

I will be writing more on investing in apartments in the future because I love it and want to help you get started. If you have any questions post in comments I will do my best to comment.

Grant Cardone, CEO CardoneAcquisitions

Written by

Grant Cardone

Grant Cardone

Best-Selling Author | International Speaker | CEO of 4 Private Co's | Real Estate Holdings of $350M Founder GCTV

https://www.linkedin.com/pulse/brexit-effect-usa-apartment-investing-grant-cardone

(http://www.autoadmit.com/thread.php?thread_id=3266371&forum_id=2#30787573)

Enjoy new rochelle

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