Morgan

Thank you for sharing your thread. I missed it earlier. I’m not sure if the VAR costs are included in the analysis I provided, but it is something I need to research further. I believe, but could be wrong, the cost of batteries are dropping significantly and is making utility scale energy storage economical, or close to it. Storage is necessary to transition to solar and wind, and that is being solved. My understanding is as renewables with storage are implemented, carbon based energies will be turned off balancing the load on the grid.

Think about all the motors needed to move tens of thousands of panels reliably everyday. Electric motors are fairly cheap, but they add up. That being said, I wouldn’t be surprised if in some locations the one axis tracking builds provide a better ROI despite the higher build cost.

Based on what I’ve read, utility scale solar farms are about 65% cheaper to build per watt than residential systems. See photo below. Underutilized roof space is a good option, but I’m not sure if it’s worth it on purely a cost basis at this point. This doesn’t take having some back up power for your home into consideration. Some people are willing to pay for that. @JRM do you have any reports on the limited supply of minerals needed to make panels and batteries? I’ve read about recycling old batteries (presumably panels can be recycled too) and they can reuse 95% of the original battery I think. Obviously the supply chain to do this is still being developed, but even if all batteries are recycled, 5% of the new batteries will need newly mined material. Minerals for 5% of the global battery supply is a lot of minerals. Anyways, I agree there are obstacles, but there certainly can be solutions. Not to mention new battery chemistries, or different chemistries used in different scenarios. It won’t all be lithium-ion.

Yes you’re correct, at least for dense areas. As the world becomes more urbanized (I think 2 billion more people are expected to move to cities by 2050), well located land for solar farms will become more scarce. In rural areas, I’m not sure if that’s true though. I wonder if there will be lots of smaller-ish scale solar farms dotted around everywhere for rural populations? Another aspect is the power loss from long distance power transmission. Another variable for analysis for site selection. I don’t know enough to make any determination about this, but I assume it’s something that needs to be considered.

True. The value of the land on the solar farm would likely have gone up. The old mounts in the ground, wiring, etc will be reusable. Take the old panels off and install the new ones. Same with new batteries. Do you think land in good locations for connecting to the grid will become more rare? The cost of infrastructure to add more transmission lines is probably fairly expensive, so being well located will probably become more valuable over time. I'm not sure if here will be so much density for solar that it actually impacts the value in this way. What do you think?

I have been reading a bit lately about the prices of solar. Basically the price to build a solar farm with some battery backup has now fallen below the cost of building a new coal fired plant. Now the economics are in solar's favor, which is good, but it leads me to the question of how much will a solar farm built today, be worth in 20 years? Let’s say a $10m solar farm is built with a 20 year contract signed by the utility provider to buy electricity. At the end of the 20 year contract, some maintenance will have been done on the solar farm, and presumably it will have been a profitable investment. But I am concerned about the value of the asset for the years 20-40. Presumably solar and battery technology will improve dramatically over the next 20 years. The 20 year old solar farm will be using outdated technology, and will have a substantially lower ability to generate revenue compared to solar farms with the new technology, thus the value of the asset goes down correct? If we compare this to a newly constructed $10m apartment building, it will need maintenance (likely more than a solar farm), but it will almost certainly have increased in value over 20 years. Other than being a goody two shoes, why would someone invest in utility scale solar farms now? Please let me know where I have made a mistake! Some interesting info: https://www.youtube.com/watch?v=Yl0VtxAbt40 https://www.nrel.gov/docs/fy21osti/77324.pdf https://rameznaam.com/2020/05/14/solars-future-is-insanely-cheap-2020/

Want to sell your CRV?

Do not buy a Hyundai. My wife and I just bought a used 2012 Hyundai Sonata Hybrid for $10,600 with 90,000 miles. Exactly 15 days later the gas engine seized up and needs to be replaced at a cost of $10,000. No joke. There is a class action lawsuit about these engines, and we're still fighting with the dealership/Hyundai to get them to approve the repair. Even if they pay, it'll take 8 more weeks from approval for it to be completed. I have a 2006 Prius that has been great. Next time I'm just going to buy another Prius. I'm never buying another Hyundai.

My wife and I are thinking of building a house and if we do, I think we’ll use solar to power our passivhaus. From what I’ve read, a passivhaus if built correctly uses 90% LESS energy than a traditionally built house in the US. 90% less energy demand means smaller heating and cooling equipment (or none and just use an EVR or HVR), and thus a smaller and cheaper solar panel system to power it all.

Wow. Definitely sounds like bad deal as you stated. Good luck to that guy selling it. I’ve talked to a few restaurant owners locally and they said you need to own the property to be successful long term. Any economic success you have will be taken by the landlord in rent increases. 100% up selling the establishment is classic too. “The sales are artificially low.” Lol. Come on. If the bar could be profitable in the morning the current owner would have done it himself. As a side note, misrepresenting rent rolls in apartment buildings is very common in offering memorandums as well. Recently I saw one saying NOI was 800k and my quick analysis showed a 400k NOI. They simply didn’t include 400k of expenses. It was ridiculous. PS - Perhaps I was too harsh in my previous reply, as lots of bars have been successful for long periods of time so maybe this one could be too. Bar ownership just isn’t for me.

Except with certain specific equipment, the newest and best equipment is probably not such a large benefit in an equipment rental business. As long as the equipment is reliable, is available to rent that day, and is a competitive price, it’s probably good enough. Large cranes used for a technical part of a skyscraper or something might be a different story. I’m not knowledgeable about that specifically. Basically all the equipment you’d need to use the build a housing development or mall is just a commodity in my opinion. Reliability, availability and price are the determining factors.

I went to party college and every summer most of the bars/clubs would close and change owners or names for the new year. Only two were mainstays and survived over my years of school. One of the mainstays was still in business a number of years after I graduated, but half of it had been converted into an arcade (which was packed when I was there). I couldn’t imagine owning a bar myself to be honest. All kinds of HR issues between bouncers and waitresses and other issues. What if a bouncer beats some kid half to death? Theft from every angle from employees and customers. Fights in the bar. It’s so easy for a bartender to give a free drink out even if you are there but on the other side of the room. Lastly, I didn’t particularly enjoy the bars and clubs when I was in college so now I wouldn’t really want to be in them every night and being around all that BS. Owning a classy jazz bar on the other hand might be nice (maybe). Are college bars profitable over a 3-5-10 year span? It seems like the build out for a basic bar would be fairly expensive. It seems like a lot of owners want a place to be the “big man” and party and show off to the girls. If that’s what your goal is, then it would likely work well for as long as you can keep it going. What kind of moat can you have with a college bar? Location and the lowest price possible? College students have zero loyalty to any specific bar. As far as I know, bars aren’t particularly scalable. Restaurant/bar yes, but bar only? I’m not sure. I should add, my investing has been in apartment buildings so I’m used to doing lots of renovations at the beginning, renting it up, then not spending much time or energy there (within reason) and moving on to the next project.

OMG - Maybe it’s time to sell all my real estate!! This is insane!

Looks like opportunity to me. Within reason, I’ll buy almost any piece of property at the right price. Especially large collections like this. Buy it all, improve it and turn it around. If the current owners optimistically purchased these buildings at 2-3x what the rents will realistically support, they will have to pay for the mistake through long term vacancies or selling at a loss. Eventually they’ll be forced to be rational.

Poorvu was one of the original investors in the Baupost Group. Poorvu wrote a 4-5 real estate books and I believe is a professor at Harvard. You should read all of his books and see if he’s written any papers. I agree with what the others have said. Study what things are selling for in the market you're interested in and eventually you’ll find a deal that you think is good. I’ve been investing in real estate for 15 years now and have looked at hundred of deals and only purchased 12 properties. In other words, 95% of the properties I looked at weren’t attractive enough for me to buy. Everyone in RE wants you to buy and sell. They don’t care if you go broke from owning the property. Their incentives aren’t aligned with yours to buy attractive property, but only to generate commissions for themselves. Realtors/brokers are a necessary part of RE, and there are good people in those businesses, but listen to your own analysis. If the deal is so good, why wouldn’t the realtor or broker buy it? Cheers and good luck!

Could you share any book titles about Lloyd's?

When hiring for my company, it’s been more difficult to find employees and we need to pay higher wages just to get them to start, then give raises to keep them. It seems like everyone is strapped for workers, so wages are going up. Typically 25%-50% higher for the same positions as last year. Excluding lumber which is up 3x, basically everything from wire nuts, to Egg McMuffins, to Pepsi, HVAC parts, to anything and everything else is up at a minimum 10% and most up 15% or more. My city just raised water prices by 45% too (oh joy). Fortunately though, because all of my competitors are facing similar cost increases, we’re all raising our prices so it’ll even out on our end.

I really like Acquired. I’ve listened to all of them while commuting. They have a long backlog as well. Primarily focused on tech companies and their history, but it’s good and the audio quality is good too.

It might be one of those neighborhoods where they pay a seemingly crazy price for an old shed like this, tear it down, and build and sell a McMansion for 4x the price. Maybe this seller will flip a few sheds and then have enough cash to build a McMansion.

I bet this sells. Looks like it has new lipstick on the pig, and has a decent sized yard from the pictures. Someone who doesn’t know anything about buildings will buy it. I’m glad I don’t need to spend 400k for something like that where I live.

Another excellent one!

I remember the issue of paying for entry was brought up maybe ten years ago and it didn’t happen. I would probably pay now that I’m not in college and broke, but I’d prefer not to. I think having the site for free with some ads, plus affiliate links, and a donation button is a good balance. I know the internet is changing from everything is free, to pay for access, but I think this is a bad trend in general. For what it’s worth, I don’t think many young people would join if they had to pay, and over time this would damage the site. Pay to enter would likely also reduce the number of infrequent posters, who over time add a different viewpoint. Just my two cents. I say no pay, plus have ads, affiliate links, and a donation button.

I enjoyed the transcription of the talk as well. I really enjoy basically anything Bruce Greenwald and Li Lu write or say. The Dollar General book is a new one for me, but I’ve read the others. Lots of good info in them. Titan is very good (every Chernow book I’ve read has been excellent). Another interesting, and perhaps more of an opposite view is Ida Tarbell’s, The History of The Standard Oil Company.

It’s up to a $1.37 now! I have prime so free shipping too. Something must be wrong on the amazon site for a relatively new book to be priced like this. Anyways, it’s hard to resist at this price.

I’m interested in the reviews as well. It’s a little expensive to buy with limited info. Although at 750 pages, it’s likely to be filled with a lot of good info.