In 2003 an RE investment property came my way, after renovations it would become a crown jewel if only I could find the money to purchase and renovate. Hard money lender was my only hope. 18% interest to purchase and renovate with money dolled out in exacting amounts as work progressed. 8 month's and the lender wanted 100% repayment. Those were the days of serious money, I got it done in 6 months refinanced the property and pocketed $10k while signing onto a 5 year adjustable mortgage at 7 3/4 percent. Over the following years the rate continued to drop allowing a refinance at 5% fixed 15 year term with a 5 year prepayment penalty with a private investor. The interest rate dropped again, the same private lender wanting to keep the note offered to accept 4.25%, and on and on it went until a Hedge fund knocked on my door wanting to buy all 7-3 unit buildings I had accrued. It was a no brainer. After the ink was dry and the money was in my account I asked: "At the purchase price and knowing my rents are the highest in the area, how are you going to turn a profit?" Dennis, we bought 340 units now 361 units, in 15 years they will be free and clear, cash flows will be in the millions. Hmmm... remind me the name of your firm again? I want to make sure I never make the mistake of investing there.
Those units are worth less today than when I sold them in 2016, the rents have not increased enough to cover the thousands of dollars in new Philadelphia regulations and tax increases and they never will. When I sold the units it took 2.5 months to evict a tenant, if they didn't appeal (rare when they do) today it takes 5 months to evict. The taxes have tripled, and now trash is $300 a year per property where before trash was included in the taxes.
Several pension funds invested in Silicon Valley Bank shares, especially one in Sweden at 4.45%. Wow. Almost all invested tiny amounts, thank goodness. I assume U.S. pension fund investments are spread very wide across many financial institutions to reduce risk. At least I hope so.
If central banks are buying gold, doesn't that mean that we should be selling it? Don't central banks purchase gold high and sell it low? Typical behavior of government, IIRC.
Joel, love "return of free Risk", great opening line that captures the entire human picture regardless of where you live there are always risk's and of course life's journey is to navigate through them by hitting as few obstacles as possible and when we do, learning from those mistakes. In the past hundred years that's been possible but I'm not sure we can avoid the planetary/eco changes that we've triggered being the stupid creatures we are, who thought we had conquered nature .. but a I doubt it, as most of the real science indicates some dramatic shifts but of course humans will adapt, but the population will diminish and sadly not always the best survive .. lets hope that BPR community finds a pathway through the coming turmoil better than the Romans did!
In 2003 an RE investment property came my way, after renovations it would become a crown jewel if only I could find the money to purchase and renovate. Hard money lender was my only hope. 18% interest to purchase and renovate with money dolled out in exacting amounts as work progressed. 8 month's and the lender wanted 100% repayment. Those were the days of serious money, I got it done in 6 months refinanced the property and pocketed $10k while signing onto a 5 year adjustable mortgage at 7 3/4 percent. Over the following years the rate continued to drop allowing a refinance at 5% fixed 15 year term with a 5 year prepayment penalty with a private investor. The interest rate dropped again, the same private lender wanting to keep the note offered to accept 4.25%, and on and on it went until a Hedge fund knocked on my door wanting to buy all 7-3 unit buildings I had accrued. It was a no brainer. After the ink was dry and the money was in my account I asked: "At the purchase price and knowing my rents are the highest in the area, how are you going to turn a profit?" Dennis, we bought 340 units now 361 units, in 15 years they will be free and clear, cash flows will be in the millions. Hmmm... remind me the name of your firm again? I want to make sure I never make the mistake of investing there.
Those units are worth less today than when I sold them in 2016, the rents have not increased enough to cover the thousands of dollars in new Philadelphia regulations and tax increases and they never will. When I sold the units it took 2.5 months to evict a tenant, if they didn't appeal (rare when they do) today it takes 5 months to evict. The taxes have tripled, and now trash is $300 a year per property where before trash was included in the taxes.
Send more hedge fund investors!
Several pension funds invested in Silicon Valley Bank shares, especially one in Sweden at 4.45%. Wow. Almost all invested tiny amounts, thank goodness. I assume U.S. pension fund investments are spread very wide across many financial institutions to reduce risk. At least I hope so.
If central banks are buying gold, doesn't that mean that we should be selling it? Don't central banks purchase gold high and sell it low? Typical behavior of government, IIRC.
Joel, love "return of free Risk", great opening line that captures the entire human picture regardless of where you live there are always risk's and of course life's journey is to navigate through them by hitting as few obstacles as possible and when we do, learning from those mistakes. In the past hundred years that's been possible but I'm not sure we can avoid the planetary/eco changes that we've triggered being the stupid creatures we are, who thought we had conquered nature .. but a I doubt it, as most of the real science indicates some dramatic shifts but of course humans will adapt, but the population will diminish and sadly not always the best survive .. lets hope that BPR community finds a pathway through the coming turmoil better than the Romans did!
I thought this article was helpful on the crisis at First Republic Bank.
https://www.wsj.com/articles/first-republic-hit-by-svb-failure-7431495e
Dominoes teetering, black swans flocking and Sir Bonner struggling to develop positive attitude. And an asteroid on the way. What We Worry Comrades…..