This is a big deal for me. It’s my third book on real estate investing. (Many of us got acquainted through my second book.) But it’s my first book released by a significant publisher. Or any publisher. (I self-published the first two.)

I’ve honestly been a bit disappointed in the timing of this book. I wrote the majority of it quite a while ago. But publishing delays from COVID and more pushed it back.

Can you invest in real estate with your IRA or 401(k)?

YES! Well…maybe.

This question turns on the word “you.” Because I can confidently tell you the answer completely depends on “you.”

Here’s what I mean. The tax code definitely allows you to make these investments. But many investors, through ignorance of the tax code, don’t take advantage of this opportunity.

“Come on. It sounds too good to be true!

You can’t tell me it’s this good. There must be some downsides.”

There are.

And don’t let anyone tell you there aren’t! Like every other investment, real estate syndications have potential pitfalls that you need to look out for before investing.

Have you ever read the Constitution? I remembered the We The People part. Being an American citizen without reading a detailed publication of our fundamental rights and privileges seems quite foolish.

Similarly, investing in a private real estate deal without reading the Private Placement Memorandum – the PPM – seems quite foolish as well.

Are you ready to graduate?

I’m not talking about school. I’m talking about moving up from residential to commercial real estate investing.

Now some of you didn’t invest in residential real estate in the first place. But many of us have. And most others inherently understand it. We’ve watched the HGTV shows. We know that lady from work or that college friend who flipped that house.

Nothing.

Absolutely nothing.

Nothing happens when Elon Musk tweets a broken heart emoji.

Or a diamond hands emoji.

Or any other emoji.

If you’re a commercial real estate investor that is.

Remember those charts they showed you? How your $200k mortgage would cost you $555,555.55 to pay off over 30 years. Proving you should pay off your mortgage as soon as possible to beat the bank.

I’m here to tell you they are absolutely right.

If there’s no inflation.

There’s a different calculator to use in the case of inflation. And its effect is magnified in the case of high inflation.

Let’s face it, friends and readers. Inflation isn’t coming.

Inflation is already here.

The evidence is all around us. Last week’s Consumer Price Index report, well known for understating true inflation, reported a massive jump.

Those of us who’ve recently tried to buy a car, build a deck, purchase a home, or even a puppy are all too familiar with what’s going on.

People fly across borders to stare at them. Tourists pay big money to fly over them in helicopters. And a few daring souls have even built tightropes to walk across them.

Waterfalls.

Honestly, I was a bit perplexed the first time I read about one in an investment context. Then I realized almost every commercial real estate and private equity deal out there has what's known as a waterfall structure.

One of my new investors, Bill, left me a voicemail yesterday.

“Hey, uhh, Paul, I’ve got a question on my distribution. Can you call me?”

I knew what exactly what Bill wanted to discuss. If I didn’t care about Bill personally, I could have copied and pasted another email to reply to him before he asked his question. Of course, I didn’t do that. I called Bill back after lunch, and it was precisely as I had predicted.

Do you enjoy major league baseball? Have you thought about the great lengths someone else must go to...in order to allow you to enjoy this sport from the comfort of your recliner?

MLB recruiters work hard so we can watch from our couch or box seats, and the team owners can enjoy a nice profit.

Do you remember where you were when the space shuttle shattered and plummeted to earth?

I do. I was on the way to lunch at the college cafeteria. I’ll never forget the horrifying images as the shuttle exploded a minute after takeoff, sending a shower of smoke, steel and bodies in a hundred directions.

The tide has gone out. Have you noticed? Did you hear about what’s going on? So apparently someone in Wuhan, China ate a bat or something...

OK enough joking around. Seriously, commercial real estate is facing a day of reckoning. A day we knew was coming. We have been warning everyone who would listen on BiggerPockets and on podcasts, etc., since 2017.

An experienced residential real estate investor called me the other day. He was a bit new to commercial real estate and he had a question:

“I thought I heard you say that a lower cap rate means a higher price. Did I hear you right? What do you mean?”

Depreciation Schedules. IRS codes. Accounting. Paperwork. The very thought of these concepts is enough to put me to sleep at my desk. Well, they used to be.