All Forum Posts by: J. Martin

Hi everyone, we're having another East Bay Meetup! So come join us! If you're coming, please post on the link for the meetup below, rather than this post..

What: East Bay BP Meetup - first of 2014!

When: Thursday, January 16th, 2014 - 6:30PM to 9ish+

Where: Rosamunde Sausage Grill (& Bar)
Swans Market Place, 911 Washington St, Oakland, CA 94607

Get There: Take BART to 12th St/Civic Center Oakland Station& walk down Broadway to decreasing-numbered streets. Make a right on 9th St and walk to the first corner, at 911 Washington St. It is about a 5min walk, a block from the last EB meetup.

Parking at 459 8th St, or other garages nearby at the link on post. Address above.

Meetup Link:

http://www.biggerpockets.com/forums/88/topics/109953-east-bay-meetup---thurs-jan-16-2014-in-oakland

Welcome O'brian, from Norther California.

It's definitely hard to find anywhere near the ratios talked about on BP on the left coast. But there are some out there in less "prime' areas. I haven't gone out of state yet, but many do.. I'm a 'fix and hold' investor too because I don't want to have to do flips my whole life.. lol Here's some tips for the site..

You'll find lots of good info in the "Learn" link across the top navigation bar, and in the link at the top of this introduction forum. You can tag people by putting @ in front of their name, then clicking their name when it pops up at the bottom of the message box. You can click on the "vote" button if you like someone's post or is helpful. And you can earn "awards" for various "achievements" - just look at your profile. Hope that helps with the site! Good luck on your investments!

@Joel Owens , they don't do 5/1, due in 10 out there? I know it can differ quite a bit from location to location. In CA, if you call around, common loans for multifamily are 25% down, 30yr am (on MF, 20-25yr am on other CRE), 1.25 DSCR, a 5/1 ARM is often due in 10 years, with resets from 5-10 years and 3/2/1% prepayment penalties for first 3 years. This can vary a bit though too..You have to be prepared for the reset on your cash flow either way, but at least you don't have to panic about getting cash-in and refi quickly in 5 years with due in 10. And pricing is almost exactly the same, because they get the variable rate vs 10-yr fixed.

Separately, one thing some CRE investors forget to check is what their index is - prime or LIBOR. Consensus is generally that LIBOR will move more quickly upward, while FOMC may lag on on discount rate/prime.. Know when your rates reset and potentially how far.. The 30yr bull market for bonds and ever-decreasing rates is over :( Doesn't mean we'll be at 6% LIBOR next year. But there is a full economic and interest rate cycle ahead of us in the next decade. Hopefully rents will keep pace or beat ;)

I work in bank regulation and have seen hundreds of both tight refi and workout deals on CRE, and specifically MF, although I do not invest in commercial myself because I like 30yr money too much at this rate and haven't hit my conventional cap yet..

You SHOULD NOT rely on your lender to roll it over. They will generally do whatever they think is in their best interest. And that can vary widely from lender to lender. For some, it may not be worth their time, and they'd rather just take their lumps and sell it for you if you don't (aka, foreclose if you can't refi or sell). You can also see from publicly available information from banks that there were also many Troubled Debt Restructures (TDR) that took place, where lenders temporarily reduced rates or made other concessions at renewal due to the borrower's financial weaknesses, with the expectation that they would recover more overall in this scenario. But you can't count on this.

Generally, if you have the resources to right-size the LTV and DSCR, they're not going to refi and let you off the hook without it.. (I'm guessing that's what happened with @Jon Holdman . Him and his partner likely had the resources to do inject equity in one way or another, so the Bank forced them to do it). If you have absolutely no reserves, underwater LTV, bad economy, nothing to cross-collateralize, etc, then you're probably more likely to get to the bargaining table . But at that point, you've risked losing everything. Lesson here is reserves, reserves, reserves, and don't get too overleveraged..!

"If my interpretation is correct, the yield curve were flattened the last two times the stock market peaked and steepened as we get into a recession. As we recovered from the recession, the yield curve gradually became less steep and eventually flattened out."

@Account Closed Yes, oftentimes at a peak, the FOMC is raising short-term rates quickly to cool things down, bringing up the short end of the yield curve. The long end often rises for a while, but when businesses and investors get less confident about the economy, the demand for long-term loans and investments drops, it decreases the long end of the curve, while the FOMC still has short term rates high, creating a flattening, and then inverted yield curve.. A classic predictor of a recession or retracting stock market (although I have heard the joke that an inverted yield curve has predicted 15 of the last 5 recessions lol).

Then, as the Fed realizes what's going on, they slash short-term rates by 50-100bp/meeting to prevent a collapse, rapidly decreasing the short end of the curve, and causing an artificial steepness to the curve because of all the QE going on. But a healthy economy should show some level of natural steepness as long as investors and businesses are still investing long-term, keeping a healthy demand and higher rate for longer-term financing. But I think the current flatness says we're still not there. Look at cash on corporate balance sheets, and there seems to be some confirmation.. A lot of corps are even issuing long-term debt just to pay dividends because it's so cheap and they have no real economic investments to plow their cash into..

Here's some yield curve talk on the great depression if you're interested.. Biggest difference then was deflation.. A whole different problem..

http://www.economicpopulist.org/content/economic-indicators-during-roaring-twenties-and-great-depression-iv

@Joey Budka , glad to see you can make it out.. let me know if you have any sub-8 GRM properties that pop up in your network..

@Chris Music , I saw Denise, and was wondering where you were at..! Talk to you there.

@Jessica Yau , looking forward to talking to you more too.. I'm still <3 W Oakland lol Not quite Belmont! But a cool dynamic nevertheless (w/ plenty of grit remaining..) Actually, I'm looking around for a small place to rent near downtown, lake, W Oak, or temescal starting around February. If you have any units opening up in your building soon, and want a good tenant to pay rent on time and report back to you on the building, let me know!

Posting the meetup info again to keep it handy for those coming to the forum..

What: East Bay BP Meetup - 2014!

When: Thursday, January 16th, 2014 - 6:30PM to 9ish+

Where: Rosamunde Sausage Grill (& Bar)
Swans Market Place, 911 Washington St, Oakland, CA 94607
http://www.yelp.com/biz/rosamunde-sausage-grill-oakland?nb=1

Get There: Take BART to 12th St/Civic Center Oakland Station& walk down Broadway to decreasing-numbered streets. Make a right on 9th St and walk to the first corner, at 911 Washington St. It is about a 5min walk, a block from the last EB meetup.

Parking at 459 8th St, or other garages nearby at the link below. Address above.
http://oaklandparking.spplus.com/Oakland-459-8th-Street-Parking.html

@Denise Madrid , I'm usually not very organized.. but trying! Glad to see you're coming :) Hopefully I can talk to you before you're walking out the door this time!

@Pete Tam and @Kevin Auyong , Looking forward to seeing you two again too.

@Alan Malicse , welcome, and looking forward to meeting you!

@Chris Martin , I think the idea was to put all the timing risk on the buyer and an exchange such as coinbase. You would have to quote the buyer the bitcoin price RIGHT at close, then sell immediately through coinbase or a similar site. Coinbase "freezes" the buy or sell price right when you click it on the current spot price, even though the coins take some time to transfer.. (and USD funds take time to hit your bank account. but the rate is fixed at the time of execution of the transfer). Much like a stock exchange. That's where I bought mine. I wouldn't mind taking it for rent, as long as the rent price is fixed to USD and they pay variable BTC based on my actual exchange rate when they transfer it to me..

Either way, there probably is some timing risk like you said, even with the exchange/fix services out there.. The trick will be finding a bitcoin escrow service that understands you have to price it at the very last minute.. maybe have the escrow keep some extra funds from the buyer as agreement to pay any fees/conversion to get it to USD in seller's bank account...

What: East Bay BP Meetup - 2014!

When: Thursday, January 16th, 2014 - 6:30PM to 9ish+

Where: Rosamunde Sausage Grill (& Bar)
Swans Market Place, 911 Washington St, Oakland, CA 94607
http://www.yelp.com/biz/rosamunde-sausage-grill-oakland?nb=1

Get There: Take BART to 12th St/Civic Center Oakland Station& walk down Broadway to decreasing-numbered streets. Make a right on 9th St and walk to the first corner, at 911 Washington St. It is about a 5min walk, a block from the last EB meetup.

Parking at 459 8th St, or other garages nearby at the link below. Address above.
http://oaklandparking.spplus.com/Oakland-459-8th-Street-Parking.html

More folks from the last EB Meetup post.. come join us!

@Jaren Barnes ,