E160: Understanding Real Estate Cycles and Trends with Arn Cenedella

Entrepreneurs Circle

Arn Cenedella is the Founder of Spark Investment Group that helps individuals invest passively in real estate to create additional income streams while freeing up your time to pursue your passions.

He has been investing in real estate for over 40 years and has created a rental portfolio that provides solid monthly cash flow income and capital appreciation. Arn has personally managed his rental portfolio and is now transitioning towards passive investing and larger multifamily properties.

Here are some power takeaways from today’s conversation:

• Powerful life lessons he got from his dad
  
• How to get past the fear of investing
  
• Why shouldn’t go big as soon as you can
  
• The right way to build a team
  
• Understanding cycles and real estate trends
  

Episode Highlights:

How to Get Past the Fear of Investing

Real estate brokerage is not rocket science. After a couple of years, you figure out how it works whether that's through hands-on experience or counseling. As a broker and an agent, and you're working and learning along the way, you eventually get past the fear of what could potentially happen, which is something that holds a lot of us back when it comes to investing.

Always have a lot of forward motion. You learn by doing, and so, you're going to learn some lessons along the way, you're going to take some bumps and bruises. But as long as they're at the scale where you live to fight another day, then it's all part of your evolution.

Investing Ideas

It's often more an appreciation game than a cash flow game. Look at whether the property makes sense today. Look for reasonable, rational reasons for optimism about the future, knowing you don't know what the future is going to throw at you. But if it makes sense today, then the property will support itself.

You can’t go as big as soon as you can because there’s a sequence to things. And when you get out of sequence, that's where you get in danger. If you just plug along, gain experience, go bigger and bigger, then you're in a little safer position. So it’s safer to scale slowly.

You need people to help you along the way, and the way to build teams is to treat people nicely. Treat people with respect, no matter what position they hold. In the residential real estate business, you got contractors, landscapers, insurance people – there's a whole series of people you need to rely on. And so, if you can start creating that key team of people you trust, you can then offload and delegate a lot of the responsibilities.

Understanding Cycles and Real Estate Trends

Life, economy, real estate – it all has cycles. And the only predictable thing is that there is going to change. Therefore, understand that you just can't have a constant up. There has to be a retrenchment and then maybe a little bit of a plateau. The new bottom is reestablished at that point from when growth has occurred.

Generally, there's an upward trajectory. In real estate, the amount of ground is finite. The population keeps growing. But in 10 years, that could be different too. If you take the long-term perspective, this momentary up and down doesn't seem as life-threatening, or you don't get too high when it's going good either.

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