All Forum Posts by: Robert C.

Ok, let me say I'm really asking because I'm bored today with sheltering in place! But I've been for some reason seeing the phrase "heavy hitters" popping up more than I remember on BP, referring to a particular group forum contributors. 

So what do you think makes someone a heavy hitter here? Is it just the number of posts and likes a person gets? Is it whether they've appeared on the podcast or spoken at an event? Is it their wisdom or an assumption about their net worth? There are definitely investors on BP who have a larger sphere of influence and therefore probably receive both the outsized praise (and criticisms) that comes with real estate forum fame. Is it all well-deserved?? 

If you're one of those folks, what do you think about about being niche-internet-famous?! (Feel free to tag people you want to hear answer that question!). 

@Amy Martin, If this isn’t about “teaching life lessons” (you'll get a lot of unsolicited advice on parenting on BP, I'm sure... lol), then I don't see why gifting/providing income isn't a valid option. I would probably talk with a tax attorney or trust attorney to make sure you know all the angles with the least amount of tax consequences. 

@Amy Martin, Hi Amy - without cosigning, I think your lending options are particularly limited during the current environment. However, I believe now is a great time to learn the business. Would she be interested in learning from a different angle, such as becoming a real estate agent? Many of the agents I know who started at the beginning of the 2008 crisis did quite well in subsequent years. There was enough runway to learn the business in time for when the market took off again, and they were able to reinvest earnings in their own investments. 

@Jay Hinrichs, Okay, Jay... maybe I should be panicking a little more. Haha. "The 'Undertaker Of Silicon Valley' Stays Busy As Startups Lay Off Thousands".

@Jay Hinrichs, I think this is where paying attention to local market fluctuations trumps macro economic predictions for the time being. And yes, the core Bay Area is an oddball when it comes to this stuff. And also, yes, I hope that economist is wrong!

So far all the new A class around here is sticking to their pricing guns, and I am still renting for the same numbers. 

I also wonder where all the money goes during this next recovery. If there is deflation, I think that means the wealth gap will have hit a new level and will be the tale of two economies. Even these last 10 years you have economists reporting minimal inflation, stagnant wages. And yet going to ski in Lake Tahoe or eating out in the Bay Area is like double the price. It’s a different world in some parts of the country than others, and that has to be fixed. 

@Brian Burke, I've got all my eggs in the Bay Area basket, and it's done very well for me, but even I have to admit that the politics here gets old after a while. Even with the constant forehead banging with what's being legislated, however, somebody would have to convince me that Silicon Valley has lost its tech luster, or we've got an actual solution to the housing supply issue (hint... we're never going to) before I believe the market hit would be longterm. 

And maybe something will happen. 10 years ago, the danger list was pretty much "earthquake" and "tech burst". Now it's those plus "Prop 13 repeal", "tech regulation/break-up", "wealth gap", and maybe there will be a tipping point when people just decide to leave. So the list is bigger than it was, even if we're probably not imminently in danger. 

I do think one interesting potential positive coming out of the coronavirus, is that California seems to be handling itself quite well so far responding to the health crisis. So if there really is a large paradigm/cultural shift coming out of this disaster, and we 1.) handle ourselves better than other states, plus 2.) recover financially faster than other states like the last couple recessions, then that could become a tangible positive reputational beacon that keeps the investment landscape strong. 

The name of the game here as a small potato investor like myself is still taking advantage of legislated market disruptions, whether it be rent control, ADU's, or supply constrictions. It makes sense that we wouldn't be a widespread syndication hotspot, though.

Anyway, congrats on the book, and I'll be getting a copy! I would put you #1 as far as insightfulness and constructive commentary on the BP forums and podcasts (not that there aren't other great contributors here as well), so thanks for the time you put in. I'll probably be reaching out to your company as we see the other side of this, because I do have my sights set on diversifying my portfolio this time around. 

@Joel Owens, Appreciate the response. Are STNL's mostly cashflow plays, or is there an appreciation expectation as well? My understanding of STNL's is that they depend on the quality of the tenant, and the terms/length of the lease. Does the value of the product decreases as the lease term shortens? What's a typical exit strategy?

@Joel Owens, Hey Joel, I'm wondering what sort of commercial investments you would target coming out of this downturn besides STNL? I've read a lot of your posts, and you are clearly an expert in the commercial space. I'm in multifamily and don't know that much on the subject. My one commercial experience was a two-tenant (restaurant and dry cleaner) that left a bad taste, and I haven't been back since. 

All I hear as an outsider (even prior to the virus) is that retail has been in trouble. And with the economy shut down, it seems to me that would affect many of the businesses that were doing well (restaurants, event/activity spaces, office, hotels). So what's left? How do you invest in commercial properties in the wake of Amazon + Coronavirus? 

Maybe the answer is none! But one thing that has always bothered me since the last recession is that it seems like EVERYBODY has been a winner in REI. That could be the bias of posters on BP, too. Can anyone point to places that did poorly, or performed significantly under expectations?

People always say that real estate is local, so then shouldn't there be more variation in outcomes even during an expansion? 

There's the idea floating around that much of the reason REI and the stock market have done so well this round is because of the money that was pumped into the system during the GFC, and it's not because there was anything special about the fundamentals of any particular asset class. Well, what does that mean going forward if we're talking trillions more coming out of this next downturn? Where does all that money end up?

We've all got time on our hands, so now seems like a good time to reflect on how the last 10 years have gone, and maybe that can give us some hints as to what our crystal balls are telling us. 

@Jay Hinrichs, Exactly - it can be good or bad. My parents owned a plot of land in our NJ town that they bought back in the 80's with grand plans to eventually build, and then it got classified as wetlands or something in the 90's and that was the end of that! And there are certainly advantages that other business don't get, which is probably why most of us chose RE investment to begin with. 

Anyway, everybody is a little bit right about the current situation, but I like to point out that we also need to pay attention to reality. And the reality, whether we like it or not, is that "landlords" are an almost universally despised group of of folks - especially where politics are concerned. So, we can't be that surprised that we're not going to be getting a flood of help. We're also living at a time where the wealth gap is the center of attention. And it doesn't take a history buff to know that the "haves" have always been considered the land owners for like thousands of years. I'm not saying the pitchforks are coming for us, but we can't be too surprised when we get thrown under the bus now and again.