Amy Sylvis is the founder and principal of Sylvis Capital, a real estate firm that invests in large commercial real estate properties in emerging markets throughout the United States. Accredited and non-accredited investors appreciate investing alongside her to take advantage of not only her extensive experience but also her detailed research and exclusive relationships.
In this episode, Chad welcomes back Amy to talk about the supply and demand of currency, buyer and seller sentiment in commercial real estate assets, and how businesses are attempting to stay afloat. They also explore inflation, regressive taxes, and how savvy investors can take advantage of devalued money with borrowed funds. Lastly, they discuss the potential risks associated with such a drastic currency devaluation and how it could lead to major economic changes in the future.
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[00:01 - 06:02] Opening Segment
Welcoming back Amy
Listen to episode 19 of the Real Estate Runway if you haven’t yet!
The US economy was intentionally shut down in March 2020 to save lives during the pandemic
Leading to a 30% increase in the US currency supply
This allowed businesses to continue functioning and prevented the economy from collapsing
[06:03 - 13:02] Consequences of Inflation during the Pandemic
Inflation is an increase in the number of currency units in circulation
Rising prices are a symptom of this occurring
More dollars chasing the same amount of goods and services leads to higher prices
A decrease in supply chain of virtually everything due to shutdowns caused scarcity
Increase in currency supply not distributed equally, leading to the rich getting richer and those on fixed income not getting access to those dollars as soon
Leverage was used to multiply wealth in real estate, but prices still rose due to a reduction in supply and free money from borrowing at rates below inflation
[13:03 - 22:49] Inflation Induced Debt Destruction
Going into debt responsibly for productive assets is beneficial due to inflation-induced debt destruction
The purchasing power of a dollar has decreased over the past 10 years
Borrowers are on the winning side and lenders are on the losing side in this situation
Inflation-induced debt destruction is when borrowers pay down their debt with devalued dollars
Hyperinflation could lead to borrowers owning their assets outright after paying off their lender
Utilizing debt can lead to wealth generation on both sides of the coin
The dollar has depreciated by 95% since its inception
[22:50 - 35:29] What does the future look like?
History doesn't repeat itself verbatim, but it often rhymes
The Fed's rate hikes may lead to a recession if they hold too long at higher rates
On average, within two years of the first rate hike comes the first rate cut
Interest rates are likely to level out at sub-6 %
It is important to be aware of global economic connections and decisions
Class A and B renters are better able to absorb rent increases than Class C renters
[35:30 - 36:46] Closing Segment
See the links below to connect with Amy
“It's so important to utilize these concrete numbers so people can visualize because gosh knows Wall Street isn't teaching us about this, and neither is the education system.” - Amy Sylvis
“Shutting down the economy could have blasted us back to the dark ages in a depression that none of us could ever imagine.” - Amy Sylvis
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Real Estate Runway Podcast is all about alternative business and investment strategies to help you amplify life, and maximize wealth! Click here to find out more about the host, Chad Sutton.