All Forum Posts by: Brian Serina

Be careful of Stockton.  RE is very cyclical and Stockton is an area that gets hammered every down cycle. 

“Cheap” is relative.  We have seen a flurry of activity from Bay Area investors buying up comm here in the Sac area, driving up prices in both MF and and comm retail.

Hi Victor, I’m in Folsom.  I am not doing any ‘flipping’ but I know the market here.  If you want to meet up for coffee sometime let me know.  

Hi, I am in the Sacramento area (Folsom to be exact). - Brian

There is risk in everything. Finding sponsors that can change their operating procedures without going over the cliff should market conditions change is key. Many of the deals we look at seem to have some pretty rosy assumptions 3~5years out. What happens if the storm clouds move in and all the predictions made in years past said only sunny weather? What's their game plan? I have looked at apartment deals here without any mention of rent control. Rents are assumed to just keep going up until this huge refi takes place and we all get our capital returned. No mention at all about how they would adjust their financial and operating model should these activists get their way - and they are a growing lot, a take no prisoners virulent group, very loud, and they want things to change. Yet many sponsors make no mention of this. Sponsors and investors that recognize that social and cultural conditions could also negatively affect their assumed 30% IRR would have a better chance of survival if and when the apartment bear market arrives.

@ John Corey   I agree, you have to be willing to lock up money for awhile but isn’t that the essence of R/E itself?  I think CF is still evolving.  And for this to evolve in a positive way, there has to be some sort of ranking system of sponsors so if they f up it would be like a stain on their performance history and that would have to involve some sort of cooperation between CF platforms, sort of like apartment owners and bad tenants.  It would not surprise me that a good handful of the bad boys on RS will be finding their way over to some of the other platforms.  I am almost certain that a million bucks was stolen out of one deal I was in so these two idiots could live the high life.  They quit paying last year and they are basically insolvent now and the money was not used to buy and fix houses yet they are out there raising money again.  I highly doubt RS will do anything, they are winding down.  It would take some federal indictments to be handed down with lengthy prison sentences to follow to let all the sponsors know they are being watched should they be thinking of crossing the line.

Hi Jamar, I am in the Sacramento area.  Feel free to contact me.  If I can help in any way, would be happy to.

I don’t blame you...California has somewhat of a foul odor when it comes to business and property investors and the free-rent activists are being heard.

Hi Kelly, the rents in the Sac area have some catching up to do, that’s for sure.  But as long as people keep moving here from other higher priced areas, we will continue to grow but at a much slower pace.   For me personally, I would (and do) rather give up a point or two and invest in something with economies of scale in the heartland of America that would provide both income and maybe a little price appreciation and let the experts manage the asset in the area.  A hundred grand goes a lot further in the heartland than in any of the California metro cities.

Here in California, if it’s a bad idea, expect the worst.  And not to be outdone, the individual cities have their own unique ideas.