π¨ The Fed Pulse π¨
π― November Rate Cut:
The Fed surprised markets with a 125-basis-point rate cut post-election.
Itβs symbolic but not a quick fixβrate changes take time to work through the economy.π December Decision Uncertain:
All eyes are on December 18th.
Core inflation held steady at 3.3%, while overall inflation nudged up to 2.6%. Mixed signals make the Fedβs next move a coin toss.ποΈ Economic Mixed Bag:
Retail sales surged in October, thanks to hurricane-related stockpiling.
On the flip side, U.S. industrial production hit a 22-month lowβa sign of lingering economic weakness.π Bright Spot in Capital Goods:
Non-defense capital goods orders ticked up, hinting at some stability in business investment.π Looking Ahead to 2025:
My take rates should stabilize by mid-2025. But until then, inflation could rise further.
DEEP DIVE
A breakdown of new builds' 250K profit

4051 S Prairie Ave, Chicago
If you watch real estate investors long enough, you'll see this: their careers often evolve in a predictable way.
It starts with flipping houses or renovating rentals, then moves to multifamily apartments.
Some graduate to commercial real estate or land development.
And finally, toward the end of the cycle?
They become financiers, at the top of the money pyramid.
They fund the next generation of deals.
This isnβt some hard-and-fast rule, but Iβve seen it play out time and again.
Of course, you can crush it staying in one nicheβwhether itβs flipping houses, owning multifamily, or playing the commercial game.
But for me?
In 2020, I pivoted to commercial real estate.
I sold my residential portfolio to focus on industrial properties.
That said, thereβs one residential model Iβve kept in my toolbox because it is so reliable.
Itβs not flashy, and it wonβt make headlines.
But it delivers steady profits.
There's no need for heavy rehab.
Iβm talking about infill urban new construction residential developments.
My partners and I have been building homes in Chicago's up-and-coming neighborhoods, like Bronzeville and Canaryville.
They're on the rise, and you can still buy teardown or vacant lots at a decent price.
Hereβs why this model works.
Less Competition: Fix-and-flip is a bloodbath. This niche? Itβs a much quieter.
Predictable: We build the same house design on cookie-cutter lots, so itβs rinsed and repeat.
No Engineering: Chicago city lots have utility hookups. So, no drainage or engineering issues.
Better Margins: The profit margins are higher andβmore importantlyβpredictable.
Financing: Local banks love these projects, and you donβt have to rely on hard money.
No Sketchy Contractors: New construction attracts higher-quality contractors. No more chasing down Cousin Johnny, whoβs juggling three jobs and ghosting your calls.
No Change Orders: Once youβve done a few builds, the process is dialed in. Compare that to rehabs, where budget swings of 10-20% are standard.
The Downsides
It Takes Time: the full cycle is just over a year: 3 months for permits, 6 months to build, and 3 months to sell.
Hard to Scale: These lots are limited in these neighborhoods.
The Numbers
Hereβs a real-world breakdown of these projectsβa three-flat in Bronzeville:
Sale Price: $900,000β$950,000
Lot Cost: $125,000 (weβve bought lots for as low as $75,000, but prices are climbing)
Construction Cost: ~$525,000
Gross Profit: $200,000β$250,000. This does not include closing and carrying costs.
Hereβs the full breakdown of construction costs so you can see exactly where the money goes:
Excavation/Foundation: $16,000
Concrete: $35,600
Water Service: $31,000
Lumber: $49,600
Framing: $32,000
Trim: $25,000
Drywall: $13,000
Roof: $21,000
Siding/Soffit/Gutters: $20,000
Porch: $25,000
Windows/Doors: $15,000
Flooring: $19,000
Tiles: $10,000
HVAC: $31,000
Electric: $35,000
Plumbing: $24,000
Painting: $16,000
Insulation: $10,000
Project Management: $25,000
Masonry: $13,500
Dumpster/Trash: $2,500
Landscaping: $4,500
Interior Finishes: $40,000
Fence: $6,000
Porta Potty: $2,500
Total Construction Cost: ~$525,000
The result?
A predictable $200,000β$250,000 gross profit.
And with the process dialed in, it's a hell of a lot easier than a heavy-lift renovation.
Letβs Wrap it Up β°
New Construction > Heavy Rehabs: Itβs easier and less stressful.
The best models arenβt necessarily scalable, but theyβre predictable and frictionless.
So, thatβs my playbook.
Got questions or want to dig deeper into the numbers?
Hit reply.
(I read every email and care about your success).
Be well,

ποΈ News & Moves π
Trumpβs βTariffs 2.0β plan is stirring things up: a 60% tariff on China and 20% on everyone else.
The goal? Revenue and leverage in trade talks. Reality?
Tariffs might bring $1.1T but could shrink global trade, spook markets, and slap inflation on imports.
Mexicoβs sweating too, with threats of a 25% tariff tied to migration.
If this turns into a trade war, the βRoaring 2020sβ could stumble.
My bet? Tariffs are bargaining chips, not a long-term strategy.
Letβs see if this plays out smartβor sparks chaos.
The Fedβs latest report flags rising delinquency rates in commercial real estate (CRE) loans, now at a decade-high 11% for big banks.
Smaller banks, with heavier CRE exposure, are also feeling the heat.
Banks are beefing up reserves to brace for potential losses, but the pressureβs on with high borrowing costs and stressed property owners.
Fed Chair Powell says the banking system is resilientβmy take?
CRE will stay rocky, but no major storms.
Thoughts?