All Forum Posts by: Natasha Keck

@Hersh M. Agreed.  With all the FED manipulation it's hard to see the underlying economics that will eventually surface.  Luckily the housing market moves very slow so I can afford to wait for more than a few days of data in the bond market.

@Cary F. If I drop the Japan reference, and just talk about prolonged low interest rates (a possibility so that the government can afford to service its debt) and the foreign money pouring in to US real estate (we're the least lame option) yields could still be going lower and lower in real estate suggesting that it's worth loading up on more real estate even with declining yields.

@Jason V. The trifecta!  Bullets, booze and real estate.  Thanks for the detailed analysis.

@Shital Thakkar As long as the US is seen as a safe haven for foreign money, I think yields will continue to drop.  In my San Francisco Bay Area market, people are not worrying about GREAT or even GOOD deals, they're fighting for TERRIBLE deals.  I would assume the same can be said for Dallas?

@Luka Milicevic It would seem that you are keeping your yield expectations steady, despite not getting the deals right now suggesting you don't think it's time to chase yield.  

I'm glad to hear no one thinks the Venezuela scenario (hyper-inflation) is something to worry about.  Preparing for that looks more similar to hoarding food and supplies than a financial position.

@Russell Brazil Your plan sounds prudent.  Locking up as much debt as you can for as long a term as possible works well in both inflation and stagflation scenarios.  Are you still seeing acceptable yields in your market for commercial apartment buildings?

@Luka Milicevic  Are you still able to meet your yield expectations with deals or are yields dropping in your market too?

@Russell Brazil Agreed, inflation benefits those with hard assets.  My concern in distinguishing between stagflation and inflation is that I am largely sitting on the sidelines right now because the deals I see aren't meeting my thresholds for returns.  Stagflation would suggest I need to lower my yield expectations and continue buying because the yields are only going to get worse.  Are you still in buying mode?

@Russell Brazil

I've read a lot about having a three legged stool approach as a way to preserve and grow wealth involving a hedge for

1. deflation (depression, falling prices)
2. inflation (status quo, slowly rising prices)
3. uncertainty

It would seem to me that we have two additional possibilities on our horizon due to our federal debt levels:

1. stagflation (steady prices for extended time.  Think Japan.  We'd better load up on all the yield we can get.)
2. hyper-inflation (rapidly rising prices.  Think Venezuela.  Look out for political unrest.)

Are you starting to hedge for stagflation or hyper-inflation?

Thanks for the welcome, and also for the wealth of information on the BP site. I kind of feel like there are five levels for a real estate investor: observer, accidental / inherit, dabbler, serious, transformational. We're trying to move from dabbler to serious and would consider BP one of the educational pieces to make that transition.