Tariffs, Recession & Real Estate: The Storm No One’s Ready For
Ken McElroy Show
Ken McElroy
4.8 • 692 Ratings
🗓️ 28 March 2025
⏱️ 24 minutes
🧾️ Download transcript
Summary
Ken McElroy and Mauricio Rauld analyze the economic impacts of new tariffs, potential stagflation, and the changing landscape of real estate investing. They also explore hidden risks, recession signals, and the murky legality of modern syndication strategies.
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Visit Ken's Bookstore: https://kenmcelroy.com/books
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ABOUT KEN: Ken is the author of the bestselling books The ABC’s of Real Estate Investing, The Advanced Guide to Real Estate Investing, and The ABC’s of Property Management. With over two decades of experience in real estate investing, Ken McElroy is passionate about sharing the good life by helping real estate investors grow and prosper. This podcast is a place for Ken to discuss numerous topics connected to real estate investing, including finance, budgeting, the entrepreneur mindset, and creating passive income. Ken offers a wealth of personal experiences, practical advice, success stories, and even some informative setbacks, all presented here to educate and inspire. Whether you’re a new or seasoned investor, the information and resources on this podcast will set you on a path where you and your investments can thrive.
Ken's company: https://mccompanies.com
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Transcript
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| 0:00.0 | Hey everyone. In this episode, Ken sits down with Maricio Ralt to talk about the potential impacts of the upcoming tariffs on real estate and also a broader discussion on the economy in general. Hope you enjoy. |
| 0:19.0 | So how will tariffs imposed by Trump's administration, particularly on building materials like lumber, steel, affect the costs and strategies for real estate syndication? |
| 0:29.6 | Well, as you know, when it comes to tariffs, there's really two big consequences of it. |
| 0:34.3 | Number one, it generally causes inflation as a whole, right? So usually |
| 0:38.8 | owning real assets in an inflationary period is the way to go. It's actually one of the |
| 0:43.0 | reasons I think gold has been really skyrocketed over the last couple months. And so owning |
| 0:46.7 | things like real estate, I mean, real estate will just generally appreciate or really |
| 0:50.3 | inflate when inflation happens. And a tariff, if it's true that tariffs will continue the inflationary pressures, |
| 0:55.7 | then I would anticipate real estate prices. |
| 0:57.5 | All else being equal, real estate prices go on, up. |
| 1:00.8 | And specifically as to construction materials like lumber and copper and all these things, |
| 1:05.1 | that just increases, as you know, the cost of construction. |
| 1:07.6 | And so if the cost of construction is going up, that means the replacement costs are |
| 1:11.4 | going up. And so even if you're not in the development world and you're just buying already existing |
| 1:14.9 | inventory, if the replacement cost is going up, everything else is going to follow from that |
| 1:19.4 | as a baseline. So net net, if you believe, and this is a big if, if you believe the tariffs will |
| 1:24.4 | stay on there for a while, then I would expect some inflationary |
| 1:28.4 | pressures, which I think will be net net positive. It would be a tailwind for real estate. |
| 1:32.6 | I feel like we just went through that with the pandemic. The supply chain, like we got rattled. |
| 1:40.0 | All my construction costs went up like crazy. All're all paint and appliances and lumber and drywall and concrete and roofing materials and on and on and on. |
| 1:50.4 | And I was like, holy crap. |
| 1:52.4 | Like I just got crushed. |
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