who’s still out there…
fdjake?
rookienyc?
bluemoon?
-Mike
Would be amazing to have this group back and chatting.
I’m visiting after 10 years. Lots have changed in my life. Went from a bird dog putting up bandit signs to just signing a my first $6M development partnership deal. It’s all on hold now because I think this time around is unprecedented. But I remember fdjake’s posts teasing us about how people say that during every time. ‘This time it’s different’ etc etc.
fdjake, rookieNYC, and the others… if you guys are reading this, I hope you realize the value and service you all brought through your posts and I would love to reconnect!
I’m here. Looking at some incredible opportunities that are presenting themselves.
Here’s my thoughts.
This is going to get FAR WORSE. This virus is a LUNG EATER. People are blowing it off. Americans, unfortunately, are dopes. They don’t save, don’t plan. don’t listen. They are not going to fully appreciate how bad this virus is until they get it. Here’s my standard question I ask everyone I know regarding the corona virus.
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Do you currently, personally know anyone with the corona virus? Most of the people I talk to answer NO.
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Within a month YOU will know someone personally who has this virus or YOU will have it!!
The money being thrown at this by our politicians won’t do much to stop the crash that is really coming in stocks.
The market has been built on bullsht for 10 years. Low interest rates allowed companies to borrow at artificially low rates, buy back their stock, push the price up and let top executives collect massive bonuses and option awards. Now the sht has hit the fan, company balance sheets are saddled with massive debt and the stock price is in the toilet. And we now have NOTHING…No work force, no economy…NOTHING until this virus is over.
But…
There are INSANE bargains out there that could get even cheaper as this virus plays out.
A few weeks of free money is not going to stop what’s unfolding here. Idiot Americans will buy Xboxes, Flatscreeens, New Iphones. These checks aren’t going to people like US…They’re going to the people in this country who can’t put their hands on $400 in an emergency. Which is 40% of our population.
Good luck to all the “look at Me” nit wits out there making $150K/year but still don’t have $2000 in the bank because they have a Range Rover payment at $1000/month and a $450,000 mortgage. GOOD LUCK DUMMY!!! Hope the Range Rover is comfortable because you’ll be LIVING IN IT SOON!!!
“Hell is Coming.”
But…For those of us who live within our means, save, invest. PAY ATTENTION!!! Generational investing opportunities are about to appear almost every where.
Stay tuned. I’ll be back…
We must take this virus seriously. Look what happened to Italy. Military trucks loaded of dead corpse searching a land to bury. Very horrifying.
Lung Eater?!
Best description I’ve heard.
With a history of chronic bronchitis…it’s got me holded up pretty good.
Even isolating with my son…at a vacant rental…as my wife just returned from out of country.
Started using instacart this week.
Bout it for now.
Stay safe.
-Mike
Glad you’re around! :beer
I was tempted to buy stocks last week after the immediate drops but I held back knowing things will get worse in a few weeks. But I missed out on some amazing quick gains during today’s rally.
Generational wealth is the goal! I’ve been saving, living FAR below my means, and I actually just recently partnered the majority of my funds into a multi-unit development deal. I’m tempting to cancel and preserve my funds for this crash but the development deal itself is generational wealth. So I’ll have to make do with the cash reserves that I have remaining.
So… the real estate market will take time to absorb this hit. In the short term, there’s the immediate slow down in transactions, people holding off on buying a home, continuing to rent, and hoping they don’t lose their jobs. In the long term, at least 2-3 years from now, that’s when I think we’ll see the foreclosures/price reductions/etc start to take off if the job losses are as severe as expected.
After going through the 2008 recession, I want to do more this time around. More than just look for discounted rentals, short sales, etc. I’m actually tired of dealing with all of that and want to move onto bigger deals!
I’ll be spending much more time this time around on stocks, businesses (senior housing facilities), and exploring all avenues of creating generational wealth.
Good luck to everyone, looking forward to some great discussions!
So we reconvene under interesting circumstances. Ty for reaching out . Hello to my friends Fdjake,Mdhaas,NJ Bird Dog,allagash and others .
Nj Bird Dog congratulations on moving up in the scale of your deals, good stuff .
My feelings about the current environment. It all happened at blinding speed while I agree and disagree with Fdjake ( no surprise old friend ) I do feel that having dry powder is the most coveted asset for this time. I also agree that the economy will get worse before it gets better . Where I disagree is this virus will get worse, look at China,Italy and numerous other countries. They have moved past the worst phase of this pandemic, and it seems they may be heading out of the woods. But this is yet to be seen. What really interests me is why Mexico has practically zero cases ?.
As most of you know I started out over 12 years ago lending my own personal capital that blossomed into a large business. But yes that doesn’t come without playing with the larger firms who are quite apprehensive at this time. This in itself makes for the opportunity that I have waited for. This all reminds me of 2008-2009 in FL. My point is that lenders with dry powder are selling water in the desert. The days of brokers browbeating me for competitive pricing , ridiculous terms, high LTV’s are over. In the last 5 days I have sent out 4 terms sheets of my terms , take it or leave it. I have been disgusted at the race to the bottom pricing that has plagued the bridge lending industry. I railed against the fix and flip lenders with ridiculous loan terms, I never joined in these deals and may have missed some upside over the years but many of the buyers of this paper are on the ropes. Toorak, Alphaflow, Roc Capital, Peer Street all on pause and reevaluating their flat out ridiculous business model. . All the while I focused on income-producing properties. I gravitated away from SFH after I thankfully made it out of FL successfully . I never lent on superluxury,non liquid markets,anything rural,no land . I lived by this creed for my entire career and I feel even more strongly now. My loan sizes have increased at my fund over the years $2mm-$30mm, but my personal deal size always stayed under $1.5mm. I love a simple mixed use property in Queens at 50-60% LTV 12% + 2 points, hardlock box, throw it on my warehouse line to get leverage and make a 20% yield. I have done this hundreds of times over my career and it still excites me to this day. Even more, after watching the stock market black swan event.
Interestingly enough I don’t see a large decline coming for SFH, the market is pretty strong in my neck of the woods. For me personally what I learn time and time again is just stay in my lane . I was not impervious to the stock market decline but it touched only 7% of my portfolio, as I’m not invested in stocks. I never have been, truthfully speaking it was my wifes’ 401k that was hit . I personally own zero stock. I have been a CRE Debt guy from the day I came in this business and feel even more strongly now.
Anyone looking to enter the stock market I would say this . Consider it all risk capital, I never liked the market and still don’t . Simply because I dont have control like I do in the debt markets. I understand my downside with originating debt. I’m an expert in probability and I feel very comfortable with that risk. After spending the better part of a decade in a deep work intensely focused mode on just origination.
I see such a gap in the market I’m forming a small balance income-producing bridge fund seeded with my own capital , Tri State area only . No better real estate market in the world. It will be this way for a long time. Certain areas of the debt market are never coming back while others will in time.
Great to see everyone is still around and doing well. We are blessed for that and sincerely hope your families are well.
…NYC
Great to hear from you!
Will repost when time permits.
-Mike
So awesome to see everyone back! Well, almost everyone.
Anyone shorting the market right now? SQQQ? Seems like a no brainier but I know only enough about the stock market to get myself into trouble.
My local RE market is still very hot with homes selling within a few days on the market. Surely this can’t continue. Just looking for a way to build up more some cash while I wait for better RE market conditions.
Welcome back NYC! :beer
“Do you currently, personally know anyone who has the Corona virus?..Within a month…”
That didn’t take long …
Friend in my city just contracted it.
Personally…I’ll be taking Bill Gates analysis into consideration…and self isolating till something like end of May… even that’s a crap shoot…with an underlying condition.
No singing Kumbaya with Trump on Easter Sunday.
Rookie… Mexico is getting hit. My wife just returned from Monterrey on Saturday. The largest cluster in that city is in an affluent area called San Pedro. I wouldn’t be surprised if the contraction there started from someone traveling to South Korea…as Kia Motors has a large presence in MTY. But they’re, (Mexico), lucky. They’ve been given much more lead time vs places like NYC which had all that influx of international air traffic.
'Bout it for now… not used to working from just a smartphone.
-Mike
Great to hear from rookieNYC and the others here!
Here’s what I’m seeing as far as the real estate market goes in my area. The market is strong with limited supply of homes for sale. Prices have risen but are not at nose bleed levels. I also don’t see people pulling equity out of their homes to buy stupid sh*t like they did in 2006. NO Florida condo’s, NO second homes. I do see many refinancing to lower rate mortgages. I think many are still licking wounds from the great recession and aren’t in a hurry to bury themselves in real estate ATM money.
As for the virus. Unfortunately it is going to get much worse. I have an inside view of it and it is not pretty. Quietly numerous hotels are being converted to covid treatment hospitals staffed by the national guard. Still a ton of nit wits out there going to the beach, having parties, going to parks. It won’t get real until the bodies start piling up. I also have heard from some friends working at high levels in federal agencies that China has more new cases and the numbers of dead they reported originally are massively under the real levels.
There is no doubt a curve to this. As rookie pointed out, things are getting better in Italy which is good news. My deepest fear is the lack of common sense in this country. I predict that the United States will be hit harder than any developed country on earth. We lack discipline here and that is THE ONE THING that this virus thrives on. You have to consistently wash your hands, wear gloves and masks. Oh, and don’t buy the BS from the CDC that masks don’t prevent the spread. THEY DO!!! WEAR ONE if you’re out in public. If you need to reuse it leave it out in the sun for 20 minutes with the outside facing the sun. Most people won’t be in environments where there are massive volumes of this virus like an ER.
One last thing…CLEAN THE BOTTOM OF YOUR SHOES WITH BLEACH!!! Think about this. If someone has this virus, they sneeze, the droplets end up on the floor where they can live for hours. You walk on that area and literally take the Covid virus home with you. 10% bleach spray solution on the bottoms of your shoes, leave it on there and leave the shoes outside or in the garage.
BE SAFE, ASSUME EVEREYONE YOU ENCOUNTER HAS COVID AND ACT ACCORDINGLY!!!
Stopping in to say good seeing the ol’ gang.
As usual FDJake providing invaluable wisdom. I couldn’t agree more with your advice above.
We all need to pay close attention to it. This could turn out to be a once in a life time buying opportunity for those of us with enough dry powder! :beer
This market downturn is far from over.
As FDJake has always said “buy em when they hate em”
UPDATE:
We are about to enter the body stacking phase of this pandemic. It is unfolding as I expected. Pockets of disease are now turning into cities of disease. The death toll will sky rocket over the next few months as what’s happening in NYC starts occurring in Georgia, LA, Florida, and other large population areas. I am still seeing groups of people out talking and acting as though this is no big deal. The warming weather may help some.
So what to do??
IMHO the stock market is about to hit the real crash. Wall St will come to realize this isn’t going to be over in weeks or months and that supply chains have become broken and won’t be fixed soon. Cascading bankruptcies and business closures are coming. The FDIC just took over a bank in W. Virginia which they contributed directly to the corona virus economic fallout.
Where are the opportunities??
OK…CASH, CASH, CASH…Anyone with it is going to be king of the world. I fully expect to see people selling Boats, Collector Cars, Motorcycles, ANYTHING they can to raise cash. Dead assets like land will be next.
As for the stock market…Stay away until the dust settles. BUT…I think FORD is going back to $2 or so. They have a new electric SUV coming out that is already completely sold out. TESLA is about to get some massive competition as in GM and FORD. The difference is these two companies won’t need to build TENTS to meet production promises. They’ll turn out electric cars by the millions. BOTH have electric versions of their insanely popular pickup trucks just 2 years out.
What vehicle is driven by more millionaires than any other on planet earth???
The Ford F-150!!!
Imagine an electric version with 1000 ft/lbs of torque!
In 2022 you won’t have to Imagine it. You can have one in your driveway. NO OIL CHANGES, NO TUNEUPS, 100K miles between brake jobs, NO EXHAUST SYSTEM REPAIRS, NO EMISSION TESTS, NO NOISE!!! It’s coming folks and we ain’t going back when it gets here.
One other favorite of mine that I’ve gone back to the trough on numerous times is GOODYEAR TIRE. Take a look at a 20 year chart of GT…That stock has been down to $4 at least 4 times in 20 years. Runs back up to $16 or $30 depending on where we are in the cycle. Bottom line? It’s an economic play. Doesn’t matter which car company wins the battle, they ALL buy Goodyear tires. Even if car sales crash, people will keep their old cars and buy new tires. It may drag along to bottom at $3-$4 for a few years but at some point it’ll be $16 again. OH…and it currently pays 11.87% dividend but that could get eliminated as the company moves to reserve cash. I don’t really care. At some point I’ll make 4X to 7X my money on this stock.
One other point…OIL PRICES are in the toilet. OIL is a HUGE price component of tire production costs. Goodyear just had that cost cut by more than HALF!!!
Real Estate???
My phone is already ringing with sellers looking to bail out. Picked up 2 this week. Bargains from people who didn’t want VISITORS coming thru their homes!!! Here’s my pitch…I’ll come by…I’ll be wearing an N95 mask with gloves. We won’t talk in the property. I follow you through remaining 6 feet behind you at all times, I will not TOUCH a single door knob in your property. After ONE walk through we go outside, discuss the price. Agree or don’t and I drive away. 2 deals done last week like this. I hand them a box of gloves, they use THEIR pen to sign the P&S. That goes into a plastic bag when signed then to my attorney. DONE!!! They LOVE IT!!
IMHO this is great insight and advice. As dire as things may become, this is what will allow one to take advantage of great opportunities that should come up. It happened in 08/09 and many people made millions and become millionaires.
Keep that powder dry until those grand slam opportunities come around.
It’s been YEARS since I was on this forum and this place was the first RE forum I ever joined. It’s good to be back! Sadly what prompted my return is this pandemic :shocked
My parents and I have been putting a lot of time, effort, and money into RE since the 08 recession and we’ve done very well in both residential and commercial. I’m the only one in the family to take over my dad’s businesses (CPA firm + RE firm) so I’m feeling the pressure as they’re both very lucrative. A great opportunity for generational wealth.
We’re very worried at the moment, however, as one of our largest acquisitions mid way through last year was an LA Fitness. Great location, large chunk of land in a beautiful city, below market rent, part of a larger shopping center, and we got it for a great price with a brand new lease term. Sadly, it’s been non-operational since March 15th and they’re not paying us rent until they open back up. Our biggest concern is if they file for bankruptcy which would effectively allow them to sever the lease and renegotiate rent at a much lower price point. Gyms will be the last thing to open when it’s safe to do so so sadly, I am expecting the worst possible scenario.
We do have ample cash on hand, we have zero debt on all our properties, and all of our other tenants are still paying rent so there is some positive news. We don’t own any stocks but it’s been really fun watching the absurd market swings. Talk about a game of emotions!
I don’t see residential taking too much of a hit this time around. Perhaps in a few cities/states but nothing like 08. My theory is that commercial will take a huge hit. Restaurants, gyms, office…all of these were prize acquisitions before all this happened and they’re all effectively dead in the water right now. I’m curious as to what will happen to those massive multi-use properties being built all over the U.S. that are filled with restaurants, retail, office space, movie theater, and apartments.