Enrico Pallazzo

What are you trying to learn? How to invest in your own deals? I do RE for a living. I seem to remember loving The Millionaire Real Estate Investor before I started in the business, not sure how well it holds up. It’s a complex topic, lots to learn. If you’re on Twitter, Moses Kagan is a good follow.

A few updates. 1) I reached out to the institutions that gave us the Freddie / Fannie loans, and the news is pretty muddled, which isn't great news. Basically, this is very much "at the discretion" of the lender, which makes this vastly less useful. Lenders are scrambling to figure out their response. Basically, this seems to be closer to a "suggestion" from the FHFA than I had first realized. 2) As for impact on my operations--too early to say. I expect it to be horrible but I won't have good data until early April when rent is due. 3) As for impact on acquisitions / sales in multifamily--from everybody I've spoken to (both real estate brokers and loan brokers), the market is pretty much frozen. 4) Good point on the 50% thing.

Which numbers?

This changed as of this morning: https://mf.freddiemac.com/COVID-19/ https://www.fanniemae.com/portal/media/corporate-news/2020/renters-covid-19-multifamily-7002.html Basically, multifamily owners will be allowed to defer mortgage payments if they agree to pause evictions due to non-payment of rent. My day job is to own/operate multifamily investments, so I pay a lot of attention to this :-)

I don’t know if this perspective is useful or not. I used to lurk here a lot, but I’ve sort of lost interest in equity markets for the last few years. Obviously I’m interested now which is why I’m back. The reason I mention this is because I am coming to you guys with an outside perspective. Here’s the thing: people on this forum seem much less pessimistic than people on other general interest forums. There are various ways to interpret this, but mine is: for whatever reason, people who are into investing (I.e. the type of human beings that drive market prices) are much more complacent. But I don’t think that complacency will last. I’ll be curious to see what the markets look like next week when panic is more widely held among the investor base. Me, I think this is the single most unpredictable moment in the last hundred years. I don’t think we have ever seen a GLOBAL shock to supply and demand. Global will really complicate our ability to address the shock and stimulate the economy. Given that uncertainty, I like cash right now.

Allowances for loan and lease losses are reported in some detail in FR Y-9C reports. The FR Y-9C reports for the top 50 US bank holding companies are: https://www.ffiec.gov/nicpubweb/nicweb/top50form.aspx All FR Y-9Cs are public. You can search for smaller banks via the "institution search" tab.

Beware of false patterns. Sometimes our intelligence (i.e., ability to recognize patterns) works against us. Let me show you another series of years seeing large drawdowns in a particular country's stock market: 1905 1909 1942 1945 1971 1992 1993 Do you notice how those tend to cluster, and have nice 30-year cycles? Would it surprise you to know that the source was the excel random number generator from 1900-2000?(This was the first series that popped up... I didn't wait for any unusual clustering). In fact just for kicks I pulled together the second set of random numbers. You see how it "proves" that things are getting more clustered more recently? Surely a sign of increased economic interconnectedness and vulnerability! 1913 1935 1950 1979 1993 1994 1997 The fact that there was a crash in 2008 doesn't make it any more likely that there will be a crash today. It does change the general perceived likelihood of such a crash, however, but I'd argue that's a behavioral bias. (That said, for all the usual reasons--e.g., Hussman--I do think the market is pretty frothy right now).