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Today, we have the pleasure of chatting with the multi-faceted Mallory 
Meehan, a real estate expert, investor, attorney, and educator at Penn State. Mallory’s diverse background and depth of knowledge in real estate investing make her an invaluable guest as she delves into how real estate education at the university level is evolving and preparing the next generation of investors.
In this episode, Mallory takes us through her journey from studying finance during the Great Financial Crisis to becoming a commercial broker, and eventually transitioning to academia. Her unique perspective on real estate education highlights the importance of equipping students with the skills necessary to explore various asset classes and creative financing structures in real estate.
We discuss a range of topics designed to provide you with practical insights into the world of real estate investing. Whether you are an active or passive investor, Mallory offers a wealth of information to help you understand the current market trends and make informed decisions.
In This Episode
- How real estate programs are shaping the next generation of investors.
- The fundamentals every investor, passive or active, should master.
- Creative real estate strategies, including lease options, tax benefits, and financing structures.
- Insights into the current real estate market trends and where the best opportunities lie in 2025.
Tune in to gain actionable advice and insights that can help you optimize your tax strategy and build lasting wealth.
Mallory, welcome to the show.
Thanks Dave, it’s great to be here!
Yeah, really great to have you on the show. Gosh, I did not even realize they were offering real estate in universities. This is a huge revelation, and I’m really excited about our discussion today. One of our big missions has been education and helping our audience understand that there are different ways to invest outside of stocks, bonds, and mutual funds.
Looking at real estate and alternatives—the fact that you can now take college courses on real estate is fantastic. This allows us to teach it to our kids, and future generations can be more enabled with education to make the right decisions for themselves.
So excited to jump into this. Why don’t we start with your origin story? Tell us how you got into real estate, how you transitioned into teaching, and what you’re doing today.
Yeah, absolutely. So I am a Pennsylvania native, and I came here to Penn State and studied finance and was graduated during the Great Financial Crisis. So obviously, I kind of had a choice—do I try to find a job or stay in school? And so I decided to stay in school. I got my law degree and my MBA while the market was starting to recover.
And then after that, I got into—I had to decide, do I want to go more the legal side or the business side? And the business side spoke to me a little bit more. But I got into commercial brokerage, and so that’s really where I kind of dived into my real estate career. So I got licensed as an attorney, was licensed as a realtor, and I was working with different businesses, understanding their needs, understanding lease structures, understanding acquisitions, and really kind of diving into it.
It was after I spent a couple of years there that this position that I currently hold at Penn State opened up, and it filled a different box for me. It filled an enriching value that I wasn’t necessarily feeling in commercial brokerage. And so I decided to transition to academia.
So I’ve been here now for eight years. I teach several different courses around real estate—real estate finance, real estate markets, real estate law, real estate negotiations. We teach a real estate software course here. We really want to prepare our students to, again, to your point, understand that there are so many other options besides just Wall Street and putting your money into stocks, bonds, and mutual funds.
And I love to teach students how they, even at their age, can start investing in real estate and thinking outside the box and trying to be creative as to how they can start building their wealth early versus thinking they have to save up and wait until they’re in their later 20s, early 30s, to actually start investing.
Yeah and are there other universities across the country? I mean, have you seen kind of a rise in this type of curriculum?
Yeah, there are a number of other colleges. Not every college is going to offer real estate, but there are some other notable colleges that do offer premier real estate education. And I think that here at Penn State, we’re definitely trying to be one of the top providers.
We’ve recently created a master’s program, and so we’re trying to acquire students that maybe want a little more refinement. But yeah, we’re just looking to educate, to your point, and hopefully increase the knowledge and skill set that people can have because real estate is one of those assets that everybody’s going to consume.
In my personal opinion, I think that this should be a topic taught in all high schools, let alone maybe getting an opportunity to take it in college.
Yeah, and really, it starts with financial education overall, besides even just the asset class. I think that is the systemic cause of so many economic troubles in this country. You can become a doctor, a lawyer, or any kind of trade like that, but you’re not taught anything about financial education.
The only thing we’re really left with is whatever Wall Street is pitching, saying, “Hey, these guys are the experts.” They make it so complicated that you feel like you can’t get involved. But once you actually understand some of the fundamentals, you really broaden your horizons in terms of how you can invest. You understand yourself a lot better, your investor DNA, and what makes sense for you.
And I think it can be exciting as well. I mean, that’s where we’ve seen real estate really be exciting, especially for younger people. Whether they’re doing fix-and-flips, little rentals, or Airbnbs, there are so many different places you can take this before even getting into the whole realm of syndications and bigger deals.
I’ve seen my daughter as an example. At age 24, she graduated from Virginia Tech and purchased her first property that they house-hacked. She and her boyfriend house-hacked, and these guys made six figures on a property in 18 months and put that on her balance sheet. If you think about the traditional path—even if you’re educated—you leave university, start working a job, make good money, and put away 20% of your income. But after taxes, how long will it take you to get to six figures on your balance sheet?
You can massively move the needle with real estate at a really young age. So I really applaud you. I think it’s fantastic that you’re teaching this to the next generation.
Why don’t you talk to us a little bit about some of the core things in the classes you’re teaching—some key fundamentals people should be aware of? Again, we have investors who are predominantly on the passive side, but there are also a lot of lessons to be learned on the active side as well.
Yeah, no, absolutely. And I would like to point out that for those who are interested in continuing to learn, they don’t have to go to university to acquire this knowledge. I know that I’m offering courses that educate them, and there are other opportunities for them. I like to consider myself a lifetime learner, and I think that other people should also look at that.
So when I’m teaching my students, one of the first things I’m doing is helping them understand a market. I think that’s really important. Do you want to invest in your backyard, or do you want to invest outside of where you’re currently residing?
Now, if I’m thinking about investing passively, I want to make sure that wherever I’m investing, I can find a solid property manager who will take care of my property and keep me informed on what’s happening so that I don’t end up in a situation where the property value has diminished. That’s one of the first steps—you really want to see what market you want to invest in.
Then, you also want to decide what asset class you want to invest in. Do you want to invest in multifamily? Do you want to invest in single-family? Do you want to invest in commercial, industrial, or land? What asset really speaks to you?
For high-income earners, I don’t necessarily recommend just investing in land because you don’t get the depreciation and other tax benefits of that asset class. But we are seeing that multifamily and single-family rentals are a hot market right now because of our housing crisis. People are able to invest in these. We did have accelerated depreciation, which allowed people to offset some of that value in the early years of owning the property, which really helped on the tax side, especially if you were a net income earner.
So the first step is really understanding what market speaks to you and where you want to put your money. After that, you want to evaluate how much you’re going to spend on the property and how much the rental value is. In the past, we used to see the 1% rule, but since housing prices have increased so much, especially post-COVID, that rule doesn’t necessarily apply as clearly.
We’re not getting rent that’s 1% of the value of what you purchased the property for. But you want to make sure that your rent is covering your expenses at the very least and that you have positive cash flow. Positive cash flow can continue growing, and once you know that’s a stable investment, you want to see how you can leverage that investment to invest in more.
I think that’s a really good place to start. If you have the money, I suggest putting 20% down and financing. Leveraging the property will allow you to get further in your real estate investing versus buying it straight in cash.
Let’s say you have $100,000 saved up, and you’re thinking, “Okay, I could buy a condo.” Maybe $100,000 is a little too low. So let’s say you have $200,000 in an account that’s collecting 3% interest in savings, and you want to buy a property. You could buy a condo in a smaller market and pay all cash, or you could take that $200,000 and buy three properties by putting $45,000 down on each of them.
Now you have three properties that you can depreciate, collect rent from, and use to offset your other income. Depending on whether you’re passive or active, we start getting into how that tax benefit can help you.
For high-net-worth individuals specifically, if you’re thinking passively, there is one avenue. If you can’t classify yourself as a real estate professional—which requires spending 750 hours working on your property, something most professionals with another career can’t actively do—there’s a roundabout way.
You can use a property as a short-term rental, at least for the next year under the current tax code. As long as you’ve rented it out for a minimum of seven days and that property doesn’t rent for longer than an average of 30 days, you can then use your income and expenses on that property to offset your other active income.
Yeah. No, one of the things that I really like about actually having an active strategy paired with a passive strategy is that, you know, most of our audience are very successful executives, entrepreneurs that are busy, right? So time is their greatest asset. They want to invest passively, but having a small portfolio of active things will create massive opportunity for tax savings, as you pointed out.
So real estate professional, one option is that your spouse could actually take over as real estate professional, and you could have a small portfolio to manage, right, just to get that. So in that case, it’s almost really less about the, you know, the cash flow from the property, you know, your tax savings are probably going to be likely much bigger.
And then, yeah, certainly the short-term rentals is a great way to do it, right? Because the requirements are much less to be able to do that. So I think that’s a great way to really complement the passive strategy from a tax side.
The wealthy understand what most people don’t-real estate isn’t just about property, it’s about financial leverage, tax savings, and long-term security.
Yeah. Absolutely. And I think that if we’re talking about, you know, some of the younger generation, some of the strategies that I’m seeing, just like your daughter or the house hacking, you know, where they’re living, they’re having roommates, they’re buying a duplex and renting out the other side.
But the other benefit of having it as your full-time residence, you know, keeping that property for two years, and you’ve improved it, and now you have, you know, an additional equity stake in that property, you now have tax-free income coming in—up to 250,000 if you’re single and 500,000 if you’re married—that you can do and reuse that process over and over again.
And I mean, if I were young again, I think that’s exactly what I would do to start building my wealth. Probably, though, wouldn’t sell the properties. I would just continue to have those as assets. But if you’re getting a job in a different city or you’re moving across, you know, the country, it would add up.
Yeah, it’s interesting, right? Because there are a lot of people who will talk about never owning real estate as a primary residence because, you know, Kiyosaki will talk about it being a doodad and a liability. But I can tell you, having looked back now on probably six or seven home transitions over the course of our career, we have profited on every one of them. And we’ve continued to move that up.
Plus, I think there are some other benefits, and this is what’s cool about having this discussion with you: really understanding all the different dimensions of creative finance. Real estate affords us the opportunity to think outside the box and innovate. Sometimes, like with a client we had recently, who had a multimillion-dollar house, he paid off the house with cash.
But it was probably one of the worst things he could have done. I’ll tell you why, from multiple perspectives. If the bank is giving you money at 6% or 7% and you can get a 20% return on your capital in real estate or other alternatives, I’ll take that money all day long. Number one.
Number two, let’s talk about the mortgage interest deduction you’re getting, which is reducing your tax bill. So, now you’re winning there. And then there’s another thing people just don’t really think about, which is that if you own your house free and clear, you’re actually at much greater risk from creditors. If you have teenagers, or something happens, and creditors come after you, the first place they look is your stock accounts and your primary house. If they take that, and you own it, well, that’s an asset they can seize.
But if the bank owns 80% of it, you have some additional protection. I think that’s another key. Any other thoughts around really creatively thinking and stacking up all the ROI in terms of owning real estate?
Yeah, so there are a couple of different avenues I’ve taken over my career. Sometimes I’ll look at properties, and I want to own them just to get the tax benefits. But there are also opportunities where you can negotiate a lease with an option, which is what I’ve done with a couple of my properties. I negotiate a lease value that’s lower than market rents, and then I find another tenant who wants to come in and pay market rents.
I don’t have any of the liability of actually owning the property. I’m collecting the rent and the spread in between what I’m getting, what I’m being charged by the owner, and what the tenant is paying. Then, I have the tenant lock into a long-term lease with an option to purchase. So, that option to purchase upfront is going to be higher than the option I had to purchase it from the original owner.
Not only do I create that monthly spread, but I also create that equity spread once the eventual buyer decides to go forward. Then, I’m just assigning the contract. It’s a great way to be creative. Now, you’re not getting all of those tax incentives that you might with ownership, but you’re still able to collect cash flow. Plus, creditors wouldn’t be able to come after you for the property because you’re not listed on the deed, and you’re not liable for that mortgage either.
Yeah, love it. What are some of the metrics you look at, Mallory, in terms of, number one, going into some deals? What are some of the key metrics you’re really looking for? And then also, as you transition into asset management and looking at your assets, what are some of those KPIs you’re managing to?
Yeah, so I think one important thing to note is that when you’re purchasing a property, not only do you have to be concerned about the purchase price, but you also have to be concerned about the closing costs. Depending on the state you’re in, those closing costs can really add up and affect your ROI. For example, in Pennsylvania, where I have a lot of my assets, we have a one percent transfer tax on both sides. So, if you’re buying or selling, you’re paying one percent in tax right off the bat just to acquire the property.
This is another reason why I decided to do a lease option, so I didn’t have to pay those closing costs twice. If I buy it, I’m paying 1% on the buy side and then paying 1% on the sale side on the other side. So that’s one of the metrics I look at, and I want to make sure that I’m at least in positive cash flow. I want to make sure that my asset is going to be producing for me, covering all my expenses.
I also want to make sure that what I buy has a value based on the market that shows at least a 2% to 5% appreciation rate. Most of the markets I look at, I’ve researched over the past 10 years to see how much properties have increased year over year. Even though right now we’re kind of seeing a decline in property values, I think that’s because we had overinflation with a lot of bidding wars post-COVID. We’re seeing that balance out.
But if you buy in a market where you know, year over year, compounding, you’re going to see on average a 2% to 5% increase, and you’re planning to hold the asset for three to five years, your return on investment is going to exceed what the average 12% return from the S&P 500 would get you.
So, that’s one of the key metrics I look at. I also look at, obviously, what the rental potential is. Most of my properties are in the single-family realm, and I look at, if I’m going to use this property as a full-time residence and do a long-term lease, what is my rent value? Versus if I go the midterm rental route and rent it out monthly, how much rent could I get with that method?
Then, I look at the short-term method and say, okay, knowing that my vacancy is going to increase, but I’ll be able to receive a higher average rent, which method is going to provide me with the highest returns while balancing that out with the risk? That’s how I look at my portfolio.
I’ve transitioned some of my properties between multiple strategies. I’ve converted some short-terms to long-terms, and some long-terms to mid-terms. You really have to understand what’s happening in the market and where the demand lies so that you can utilize the asset to receive the highest rate of return.
Yeah, and I think there’s another key metric in there that people don’t really talk about, but it’s an interesting dynamic in today’s world: the devaluation of the dollar. Owning real estate is such a hedge against the dollar, and you’re paying down that debt with future dollars, which are worth less. Do you have any calculations on that, or do you factor that into your analysis?
It’s an interesting point. I wouldn’t necessarily say that I calculate it directly, but I think, indirectly, you’re calculating it based on the appreciation value of the property itself. You’re understanding what the average appreciation rate has been, and then, if you’re looking at your debt and balance statement, how much of that asset will you have paid off in the future. From there, you can understand if you can sell it at that appreciation rate and what your rate of return would be.
Typically, I like to see an ROI of about 15% or higher, so that’s usually my target. When I’m looking at commercial properties and cap rates, I always tell my students: it’s the one time you buy high and try to sell low. You want to try to find something that needs a little improvement, maybe it has a tenant whose lease is about to expire or convert, and you can identify another opportunity to put in a new tenant. You can buy that property at a discount, then acquire it, put the new tenant in, and now you’ve exceeded the property’s value.
You might have bought it at a 10% cap rate, but with the new 10-year lease, you could sell the property at a 6% cap rate, which means you’ve gained a 4% spread in value. You’re going to see a huge return. But again, it comes down to understanding which market you want to invest in and what asset class you’re looking to get into.
Yeah. Can you break that down for some investors who aren’t familiar with cap rates and how they’re calculated, what it means from your teaching perspective?
Yeah, so absolutely. So a cap rate or capitalization rate looks at your property’s NOI, the net operating income. So that’s all of your income minus all of your expenses before any mortgage or, you know, any expense related to capital expenditures. So your NOI divided by the sale price or divided by the valuation of the property. And so that percentage basically takes into account how much money you’re cash flowing and what the value of the property was when you bought it. And if you’re looking at cap rates, the cap rate tells you what your average rate of return is going to be for that specific property. And so, you know, a lot of people, especially in bigger cities, they’re used to seeing four to five to six percent. So you’re not getting as high of a return.
But you’re still getting all of the benefits on the tax side for investing in those income-producing properties. And so in different markets, if you’re buying at a higher cap rate, it generally means that your cash flow is a little bit lower or your sale price has been adjusted because there’s some sort of risk or some sort of improvements needed.
And so if you’re looking for a value-add opportunity, you do want to try to find something that has a higher cap rate because it’s saying that either the building has some sort of capital expense that’s probably going to need to happen, a new roof, a new HVAC, updated parking lot, anything like that, or they have a tenant that’s about to turn over and there’s a huge risk with a vacancy.
Yeah, makes sense. So how about from, let’s put your attorney hat on now and let’s talk about, you know, due diligence and risk. A lot of people I think can be excited about real estate. They know they want to diversify. It’s a good asset class to get into. But, you know, they kind of can get paralysis by analysis and just not take that really the next step. So what are some of those key points that they should be aware of?
You know, on the due diligence side and really understanding the risk fully.
Yeah, and I think that it’s really important to get eyes on the property. I know a lot of people buy property sight unseen. I mean, that’s a huge, huge risk. And so I always recommend that if you are buying a property, you always have some sort of inspection clause. And so that’s basically your get out of jail free card. You can back out of the deal without penalty. And the reason I say that is because
You never know what could be behind the walls. You never know what things there might not be showing through a listing or through pictures that you’re seeing online. And so your due diligence is you have to go and see the property. Another reason that’s important is because you don’t know who your neighbors are and you don’t know what value or effect those people around you or
Commercial properties around you could potentially have on your particular property. I just gave this example to my students the other day. There was a property that was being sold to a homeless shelter. And so that homeless shelter was coming in in a primarily residential area. And the effect of that homeless shelter next to these other properties had a huge impact.
On the value, right? And so while we don’t necessarily think about that, if you were trying to buy this property next to the homeless shelter as a rental property and you didn’t go and see that there was in fact a homeless shelter next door, that’s a huge risk that you’re now taking because your rental rates are most likely going to be impacted by that situation. And so I highly recommend having, you know, an inspection clause. I always
You want to also make sure that you find a good quality handyman or someone who has experience in that particular market that if you can’t go out on site, you can at least hire somebody to put eyes on the property that can give you an assessment of exactly what is going on. I think not only do people have analysis paralysis, but sometimes they get a little too excited and they jump the gun.
And they get into an asset that later is just going to be a money pit for them and they keep having to put improvements because they didn’t do their due diligence in the beginning.
Yeah, and what would you say from like, if you were to compare asset classes, right? Against say the S&P versus real estate. You know, what are some of your kind of pros, cons, or your investment thesis towards real estate?
Yeah, I mean with real estate, you’re always going to be concerned with the vacancy, right? You’re always going to be concerned about the tenant risk. And no matter what type of property you invest in, that’s always going to be a risk that you have. You might have a solid tenant that’s great, always paying their rent on time, but if they go bankrupt, like if you had a Bed Bath & Beyond or you had a
Big Lots in your anchor shopping center that you had and now you’re stuck with a large portion of your portfolio that you’re going to need to fill where a lot of companies are starting to downsize and they’re not filling those types of spaces. So that’s, you know, one of those things that you’re going to have to look at. Now, as far as what kind of assets are maybe up and coming and ones that I’m looking at currently,
We’ve all seen that the office market has kind of taken a tank. And with the work-from-home models like that, a lot of especially class C office, which would be basically not updated, probably built in the 80s, 90s, really challenging to put the amenities that we’re seeing in some of these nicer office spaces. And so the attraction to companies is really less. And so we’re kind of left with what do we do?
With all of these properties. So if I owned office space that I can’t fill now, I’m going to try to either sell it at a discount and just cut my losses, or I got to figure out what kind of tenancy I can then put into this that’s going to produce a rate of return that provides me with the confidence that I should keep this asset. One of the asset classes right now that’s really up and coming and that I think is going to see a lot of traction coming forward.
Are data centers. And it’s not necessarily a sexy kind of asset class, because I think a lot of people love the multifamily and mixed-use space, you know, in downtown markets. But data centers are going to be extremely important as we continue to see AI increase in the market. We continue to see companies needing to put their data and their servers in larger spaces.
We should be seeing a huge intake of data center rentals. And so if I own a Class C office space right now, I would be looking at the current trends. I would be thinking about converting my Class C office space potentially into a data center office.
Yeah. I mean, one of the reasons for us why we like real estate and when I compare it to, you know, the S&P, I mean, typically if people are buying an individual equity, right, they’re only hoping for really a linear gain. So if you buy a thousand dollars worth of Tesla stock, the only thing you’re hoping for is for it to go up in value. I mean, unless you’re day trading or something, right?
You know, with that, you really only have one chance to succeed. But when you look at real estate, right, there’s multiple ways to actually increase your upside, as well as protect your downside, right? Because you’re getting the tax efficiency, you’re driving income, so you’re getting cash flow off of it right away. You’ve got leverage to the component. And you’ve also got that forced appreciation, right? Where you’re driving value into that asset. So,
I always like to think of that as really like a trifecta, right? And this is why when you look at portfolios of the ultra-wealthy, you look at endowment portfolios, and these are some of the best of the best investors and they’ve got 30% plus of their allocations to real estate because they understand this.
Yeah, and I think that’s important to note. It’s like if I buy a share or, you know, a thousand dollars of Tesla stock, while I might have voting rights to contribute to what’s happening, I don’t have any direct control over what Tesla is doing as far as their management and their back end. You know, they might make a decision or Elon Musk might make a statement that then dramatically affects the value of the stock.
Versus, I have real estate. I have control. I have the ability to pivot if I needed to without having to worry that I don’t have that capacity. Like I said, I have the ability to pivot if I see my long-term rental isn’t succeeding and I can pivot to a midterm rental.
So I think also owning real estate versus stocks is that you have the control, you have the ability to affect the value, whereas with stocks, it’s just kind of a sit and wait game where you don’t really have that direct control.
Owning real estate gives you control over your wealth in ways that stocks never will. You can pivot, innovate, and optimize your returns.
Yeah. So we’re at the beginning of 2025. Where do you think the real estate market is heading, including with interest rates this year?
Yeah, I think that if you would have asked me that question in Q4 of last year, I would have had a different answer. I really think that real estate investors will have a good 2025. I don’t necessarily think that interest rates are going to come down too much. I think that we’ll probably see another 50 basis point decrease this year.
But I do think that we’re set for a potential other tax reform, especially given the Trump administration and some of the policy changes that they had done in 2017. I think that we’re going to see some of those come back. So real estate investors, one of the things I think will come back will be 100% accelerated depreciation. And so that’s going to be a huge thing where if you’re buying at a higher interest rate, yeah, you’re going to have some higher upfront costs, but if you’re able to depreciate that asset 100%, that’s really going to help offset some of those increases in values.
I think that we also need to look at other policies that are currently happening within the market. And so it’s going to be important to see what the Trump administration appoints as far as leaders, especially in industries related to real estate.
Now, I think we’re going to continue to see what’s happening in the office markets. And I think that, you know, recently the federal government made an announcement that they’re looking to bring everybody back to office, right? And so that’s a big push to try to get, you know, the office space momentum and then assets that aren’t being utilized. We’re going to see, okay, how can we utilize those assets in a different direction?
And so I think this year is going to be a lot of transition, but I think it’s going to be a good year to be a real estate investor, given that interest rates are likely not to increase. I mean, assuming everything is going well, but also that I anticipate us having a new updated tax reform that tends to be very favorable to real estate investors.
Yeah, I would agree with that. And what do you think on the single family side? Do you think the single family is totally overvalued? We’ve seen such increases over the past couple of years. Is that going to kind of stay the same or drop off or what are you feeling there?
For single families, I think we’re going to kind of see a plateau. I don’t think we’re going to see much of any increase and properties have been sitting on the market a lot longer than they had in the past. And so what we are seeing is pricing that we maybe once thought could happen. These high interest rates have clearly priced people out of the market. And so we are, if we don’t see it plateau, we might see single family decline by a couple percentage points.
And so that is probably going to come into equilibrium in 2026. Just waiting to see again what happens with interest rates and what happens with the federal policies that are likely to come out this year. I always tell people that starting in single family is good, but if you start in multifamily, you’re able to diversify and eliminate some of your risks. You’re only replacing one roof instead of, you know, six roofs and you’re only replacing one HVAC system instead of six HVAC systems.
And so you have to understand some of the risks that come into that. You have, you know, the ability to have eight tenants versus one single tenant. And if that one single tenant leaves, your entire cashflow is gone versus if one tenant leaves, you still have seven tenants left in your multifamily. And so single family will, I think, kind of the market will correct itself and I think that that’s going to continue happening this year.
Yeah. And how about on the commercial side? A lot of multifamily office, you know, there’s definitely some challenges with those that use floating rate debt. A lot of that debt is coming due maybe this year. Rates are, you know, the rate caps have been super expensive, just eating into those profits. Have you seen any creative solutions and what do you think is going to happen there?
So a lot of those debts that are coming due now, the owners or investors are really asking the bank to extend their notes for at least another year so that they can see what’s happening with the interest rate environment. I think that different assets of commercial investments will be strong, whereas others will not be as strong. Like I said, office, we’re still going to see a decline in office. Now, if you want to buy office at a discount, this is the time to buy office space. And especially those class B and class C spaces that are likely not to have as much desire or attractability.
And I think that the multifamily is kind of in the middle. That’s a middle of the road of the commercial properties, we are seeing a strong retail bound. And that was something that a lot of people were surprised about, that we are seeing retail spaces being filled and they’re being filled by, you know, tenants that are quality tenants. And so I think we’re going to see retail be a strong, strong investment this year. But again, nothing is going to stand next to data centers.
I think data centers are going to be the number one performer this year, maybe second to industrial space, which is kind of starting to see a decline. We saw such a spike in industrial when e-commerce was being so much dependent upon. But now people want to get back into the stores. They want to get back and they want to shop in person, which is why we’re starting to see that retail bound.
That is going to, I think your two strongest ones are going to be the data centers and retail, and your two weakest are going to be number one office, but then coming in some of those multifamily as well.
Yeah, we’re just launching our latest opportunity in the MedTel medical office business space and our medical office buildings. And it’s a really interesting model where you have anchor tenants of dental practices that sign 10-year leases and have 60% of your tenant base is already locked up before you either do new construction or you do value add. Any thoughts on that space?
Yeah, I think that the medical science space also saw a huge increase during COVID and post-COVID. That space has taken a little bit of a hit, you know, and we saw maybe too much hospital space that wasn’t necessarily needed. But I think to your point, if you’re able to find specialty groups, you’re able to find those chiropractors, those dentists, those orthodontists, podiatrists, you know, very specialized practices that are not seeing a decline in their patients, you’re able to lock in those longer-term leases and that’s a really great model to be able to put together a portfolio, especially if you’re able to pre-lease them before you start construction on a new venture.
Yeah. Mallory, if you could give just one piece of advice to the audience about how they could accelerate their own wealth trajectory, what would it be?
I have a strong feel of don’t wait, buy. Especially when there’s a lot of uncertainty in the market. I like to tell people when you smell blood in the water, you dive in instead of retreat because that’s where you’re going to find the best opportunities.
And so people are uncertain right now. They’re not sure what’s going to happen in this real estate market that we’re in. And that uncertainty brings in some really nice wiggle room when it comes to acquisitions. So I like to tell people one, do your due deal right before jumping in, but don’t be afraid to buy even with this uncertainty because the likelihood of your asset appreciating, the likelihood of your tax benefits offsetting your income are so much greater that don’t wait, buy.
Yeah, sage advice, right? If you were to follow the likes of Peter Schiff, I mean, 10, 15 years ago, you know, it’s been a panic, panic, panic every year. And, you know, the amount of money you’ve made, if you’ve taken action over the course of the years, right, you’re going to be way ahead.
You know, it’s just doing your due diligence and understanding, you know, your own risk tolerance and not spreading yourself too thin and making these decisions. So, really appreciate that sage advice and all of the wisdom you’ve shared with us today.
If people would like to connect with you, maybe check out some of your courses and learn more, what is the best place?
Yeah, so my website inspirewealthmgt.com is where you can find information about me, about my courses that I offer, and they can follow me at ProfM. on Instagram, Twitter, Facebook. I’m on all of the social media accounts.
Also, Inspire Wealth, that is my education company. So I’m always happy to share my knowledge. I love talking about real estate. I love talking about tax benefits and all of the legal ways that you can safely protect your assets.
Awesome. Thanks so much, Mallory. Appreciate it.
Thanks, Dave.