Morgan
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Posts posted by Morgan
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Congratulations on your investments and your travels! I’m looking forward to reading more.
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This is cool:
"Sun Cable project, backed by Atlassian co-founder Mike Cannon-Brookes & Fortescue Metals’ founder Andrew Forrest... plans to export power from a giant solar farm in Australia to Singapore via a 3,800km undersea [high voltage DC] cable."
Holy cow that's incredible.
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I'll add some about my experience with a personal solar power system. I've been thinking about putting solar power on one of my apartment buildings to cover the laundry machines, hallway lights, and fire alarm system. When we run the electric furnace in the basement the bill skyrockets so I haven't been planning to cover that. We also renovated all of the basement into apartments and the tenants pay the heat, so the furnace issue may be a moot point now. Anyways, it's always been too expensive to make solar panels worth it, but in 3-5 years when I redo the roof, I'll reevaluate the prices. As soon as it's economical, I'll probably do it. If it goes well on that building, I'll add it to the others as well.
I have another building where I pay the utilities, but I'm not going to add solar to cover the cost of electric there. Separating the utilities is a much better investment and also aligns incentives properly. People use less energy when they pay for it.
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I’m in the Pittsburgh - Columbus area and I have seen one multi family portfolio that was reasonable, but the properties were pretty junky and not in a good area. Other than that one, I don’t recall seeing a property on LoopNet that appeared to be a reasonable deal in the last ten years or so. CBRE tends to be similar. Obviously they both sell tons of property as they’re both big companies, so someone must be buying.
All of my best deals have been from contacting landlords directly when the property isn’t listed or from distressed sellers.
Hopefully someone with a different experience can chime in as well.
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New interview:
Nothing too surprising but it was good to hear his thoughts on RE. Like Buffett, he’s not really buying now.
Thanks for sharing! I’ll give it a listen tomorrow.
Cheers!
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Yes, the data the next 6 months will be very interesting. Regarding wages, if unemployment hits +15% and we do not get a V shaped recovery then my guess is wage growth will slow over time as expectations fall.
Currently, grocers are having to pay a premium to attract and keep workers during the pandemic. This will likely be true for all occupations where employees are put at a health risk.
I also see a scenario where business that re-open have to charge higher prices because their revenue is lower (due to social distancing requirements) and their expenses are higher (due to PPE they need to source for staff).
Crazy stew of unknowable factors right now. Business owners must be going crazy trying to figure out what to do and how it all might play out...
I received a survey from a theater that I like in Dallas called Alamo Drafthouse (it's like Studio Movie Grill, basically they serve food & drinks while you watch your movie) that asked how we would feel about things like (a) two ticket minimums, (b) a minimum guarantee on food & drink orders, etc. Basically making sure that it's worth it for them to open again.
What do you feel about the questions they asked?
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Can somebody post a picture of a Donald Trump cheque. I'm dying of curiosity.
Here it is.
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I was at the mailbox today & a neighbor was passing by.
He stopped & asked me if I'd gotten a stimulus check yet & I waved the envelope at him.
He started pissing & moaning about how Pelosi is holding up the checks.
I said yes, it's a disgrace that she's held up the checks just so she could get Trumps name on them.
He started to bristle & I asked him if he'd knew that Pelosi & Trump were having an affair & that she had to be mean to him in public for the sake of the democratic party but that her work getting his name on the checks proves that she really loves him.
I think I had him believing it by the end of the conversation.
We rarely talk because he's pretty much a dipshit.
Hopefully we won't talk again any time soon.
Aahahahaha
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Morgan are these numbers ($4k-5k per unit) and the caps rates you are mentioning for self storage properties that include the real estate? This one does not. As mentioned above, when push comes to shove the landlord probably already owns this business and its improvements - at the end of the lease term. Without seeing the books and the length of the lease, it really sounds like someone trying to sell his job because he knows his income is about to be halved by non-payment / deferred payment / etc by the ultimate tenants.
We don’t have all the details about everything but - - - - $250,000 for 400 units is WILDLY, WILDLY cheap. That’s $625 per unit. Way, way below cost to build. The least expensive per unit cost I’ve seen in my local deals (between Columbus OH and Pittsburgh PA) is $2700 unit. Many are in $4000-$5000 range and going up to $9000 per unit (crazy high).
If you don’t buy this, let me know where it is and I’ll buy it.
The ones I’m referring to do include the property. Mostly they are mom and pop type establishments and the sellers are retiring. Typically 40-200 unit type places. Generally not big enough for publicly traded companies to care about. Around here, they are a building on the road, sometimes a few buildings, occasionally fenced in. There are almost no climate controlled units here. I suppose the market can’t support it.
That being said, in this case the self storage owner does seem to be at the mercy of the landlord. If he’s had the building for 20 years, its likely paid off so he can hold out if necessary. I guess we’d really need to see the books to know the whole situation.
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I’ll just add this for general info. I’ve seen self storage properties selling at 7% to 25% cap rates. Lower rates more recently as the market has heated up (until covid 19).
I never bought any because they’ve not been attractive enough for me, but I may have some some errors of omissions.
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We don’t have all the details about everything but - - - - $250,000 for 400 units is WILDLY, WILDLY cheap. That’s $625 per unit. Way, way below cost to build. The least expensive per unit cost I’ve seen in my local deals (between Columbus OH and Pittsburgh PA) is $2700 unit. Many are in $4000-$5000 range and going up to $9000 per unit (crazy high).
If you don’t buy this, let me know where it is and I’ll buy it.
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40% of N.Y. Tenants May Not Pay Rent This Month. What Happens Then?
https://www.nytimes.com/2020/03/31/nyregion/coronavirus-landlords-eviction-tenants.html
If the federal and state governments make everyone take a financial pause for 2-4 months until this passes, it’s fine (I guess). If evictions are banned and landlords must pay all of their bills then there will be serious problems for everyone eventually.
At a minimum tenants won’t pay now and they absolutely won’t pay a lump sum of 2-4 months rent at the end. They won’t have had a job to have saved up the money obviously. They won’t pay and then they’ll abandon their apartment for a new one as soon as they can be evicted. If everyone pauses it’ll be ok. If the landlords (or one part of the chain) have to bear the brunt of it it’ll be a problem.
Ironically, NYC still demands to be paid water, sewage and property taxes. What a bunch of dopes.
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minten, I think the fear is that the virus will could get out of control and kill huge numbers of people. After all, it is spreading exponentially. I'd rather the government be harsh and do what they can to limit the spread and damage, than say it is like the flu and not do too much.
I am seeing headlines everyday of famous people who have died from the corona virus. It is real, and it seems to kill all kinds of people. We're just starting this in the US. We probably have quite a bit more to go unfortunately.
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I'm not sure what the banks are doing in my area yet, but I wouldn't be surprised if they're stopping everything except for top quality borrowers with lots of cash. I haven't tried to get a loan since all this corona virus stuff started.
That being said, I have three cheap fixer-up houses that were listed just before this began. They're all a little bit below what I think they're actually worth, but still basically no interest. My realtor told me there has been a "drastic slow down" in everything real estate. We shall see, but I don't anticipate selling those anytime soon.
I've been looking at some other deals and people haven't really started to drop their prices yet. Some have just been too high to begin with, but others don't seem to realize what kind of recession we're going into. The US is due for a slow down or recession. 10 years of growth quite a bit longer than average. My memory says five to seven years is the average.
Anyways, I have a few hundred apartments and only five or six tenants have said anything about not paying. We'll see what happens in the next two or three days.
Where are your apartments located primarily?
They're in the northern panhandle of West Virginia - about an hour west of Pittsburgh.
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I'm not sure what the banks are doing in my area yet, but I wouldn't be surprised if they're stopping everything except for top quality borrowers with lots of cash. I haven't tried to get a loan since all this corona virus stuff started.
That being said, I have three cheap fixer-up houses that were listed just before this began. They're all a little bit below what I think they're actually worth, but still basically no interest. My realtor told me there has been a "drastic slow down" in everything real estate. We shall see, but I don't anticipate selling those anytime soon.
I've been looking at some other deals and people haven't really started to drop their prices yet. Some have just been too high to begin with, but others don't seem to realize what kind of recession we're going into. The US is due for a slow down or recession. 10 years of growth quite a bit longer than average. My memory says five to seven years is the average.
Anyways, I have a few hundred apartments and only five or six tenants have said anything about not paying. We'll see what happens in the next two or three days.
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I am from Wuhan and I have lots of friends and relatives there. I could tell you this: If you trust the government's stats of 500 infections and 17 deaths, it is no different from buying Chinese stocks merely based on their financial reports. All fake numbers.
The actual number is likely in the 100k range.
Right now even the doctors ran out of masks and gloves and are working unprotected. I don't know how much longer they can last before they are down.
I have 3 relatives infected. One staying at home, and two who spent 6 days going to each hospital to try to get hospitalized. They were all told one thing: We don't have resources for you. Go home. They finally got hospitalized yesterday. Think about it. That's after they are diagnosed positive. They are walking on the streets for 6 days while spreading the virus everywhere, with no hospital taking them in.
There are thousands and thousands of such patients.
There are also dead bodies everywhere in all hospitals. They are dead on the floor and for hours, no one comes to pick the bodies up. When they do get picked up, they are immediately sent to the funeral to be burned, without any diagnose of whether they got infected by this virus or else. Therefore the 17 death is just a joke.
It seemed very alarming that they shut down so many cities so quickly. It’s up to like 30 million people “quarantined” in their cities. China doesn’t mess around, so I wouldn’t be surprised at all if it’s much bigger than the government is saying. You don’t just shut down 30 million people for no reason.
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I agree. Keep the politics on the politics board. I don’t have anything muted and read a fair amount on this site everyday, but the culture seems to be changing as more hostility from political discussions spreads to other areas - mostly the result is people posting less in general. This site is very important to me and I really don’t want it to decline because of politics.
(This is isn’t a slight against moderators. Sometimes it just leaks out and is hard to control.)
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Good lord guys. At least read the book before commenting... that's how book discussions work.
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That dude is gonna have a bad day.
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The guy who started it sold it a few years ago I think. It was quite good when he was running it. I haven't been following too much since he sold since it changed a bit after the sale.
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I'm giving rocket a try too. Looks pretty good so far.
Doesn't seem to have a quick way to upload portfolios though. Anyone able to find a way to do it?
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Mine finally was changed - what a completely useless update. I guess I'll find a different service to use.
What the heck Google? Why?
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This might be of interest:
https://webb-site.com/articles/enigma.asp
If you don't know him, he's a legend in HK corporate governance. Not long after he put this out, a load of the companies' share prices bombed.
This site is incredible. Thanks!
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Tesla and Elon Musk is mis-understood by lots of value investors, please read this blog post The Elon Musk Blog Series: Wait But Why (https://www.amazon.com/gp/product/B01CF5FY4E/ref=oh_aui_d_detailpage_o00_?ie=UTF8&psc=1) to get some insights about this company.
Yes I need to pay $8 to listen to someone tell me that it's ok and I should feel good paying a lot of money for a company that doesn't make any money.
You see... these are not the droids you're looking for.
I believe these are the articles that are printed in the book. They're free here and worth the read even if the website looks silly.
https://waitbutwhy.com/2017/03/elon-musk-post-series.html
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And those collector cars can go way down. Sounds like a dumb bubble to me. Expensive cars to maintain also.
Interesting that no one would listen to you.
A few years ago I was looking into buying a mid 80s Porsche 911 SC and they were 10k-20k depending on condition. But now, those cars are 40k-50k. I'm definitely not going to buy one at those prices. They'll almost certainly go down eventually. I can wait...
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Thank you for the list!
Not an investment board
in General Discussion
Posted
There are mods. There are also different boards. Focus on the investment board and ignore or mute the others.
Also we’ve had a bit of a rally the last few years so there are fewer names that appear cheap...more time to talk about other topics I suppose.