Here’s how dumb and corporate some REIT managed properties are. I have a family member who’s lease is up for renewal on 2/1/24, they sent them a renewal notice for $4150/month from their current $4100/month (NJ). Tenant says, “too much we are going to look elsewhere”.
PM
This Canada wildfire smoke covering the Manhattan skyline is kinda wild. I live on the Hudson in Hoboken across from Manhattan and can barely see the empire state building today
@mikesimonsen
Just heard this incredible stat from James Egan on Odd Lots. “1/3 of all homes in this country are owned by people age 65 or older and 50% of those homes were bought before the year 2000” 😮. Now consider Case-Shiller is up 3X since 2000, 4X since 1990
In other words a home buyer in 2000 might have bought their “move-up” home at age 42 for $350K. That house is now worth over $1,000,000 and they likely have little/no mortgage left on it and a monthly housing cost of taxes and insurance. They will die in that house before selling
@slmandel
@Benihana94
Yeah thats extremely believable. Or it had to do with the fact it goes against your hit piece and it involved Rutgers defecating on your alma matter.
You want to tell me that the athletic dumped money into ads on your hit piece but can’t pay $9/month for twitter blue?
I gotta
I think the market/people are understating the distress coming to multi-family CRE. Here’s the deal.
There is a prominent multi-family “guru” based out of Dallas who in 2021-2022 was banging the table for his mentees to buy 60’s-80’s vintage properties in not such great areas
Foreclosure auction for 602 apartment units in Fort Worth.
1505 Homedale Drive:
- 256 units
-$23.5mm loan ($92K per unit)
- Loan was originated in June 2021
-1980s vintage
7040 John T. White Road:
- 346 units
-$29mm loan amount ($84K per unit)
- Late 70s vintage
Later today I will tweet out a more detailed list of questions that I ask GP’s to vet them before investing in their syndicate. Here is the basic overlay, I’ll post the detailed version this afternoon
In a nutshell here’s a reason why the 100+ unit multi-family space will get VERY ugly unless rates come down.
In a time of flat rent growth and rising expenses nationwide, I know some pretty elite multi-family operators who have still managed to grow NOI 20-30% over the past
My guilty pleasure is watching football. Lots of football. All year. Cant thank
@CoachDanCasey
enough for introducing me to
@tschneider1014
.
Coach Schneider’s ability to call an offense and innovative nature is hard to put into words. It’s simply incredible.
Like who thinks
@NYP_Brooksie
Im full on board with selling this year. Has there ever been a softer team in your memory? Theyre not built for playoff hockey. Theyre afraid to go after loose pucks in the crease and DARE shove an opponent.
People seemed interested in this yesterday so here it is. The full 23 questions I ask GP’s before I invest in their multi-family syndication with brief explanation of each point. Not a thread guy so just screenshots of my word doc.
Not only does
@movewithroam
show you homes that have mortgages that could be assumable, it also tells you the underlying mortgage rate
This home for sale has a 4.25% mortgage rate
Austin market 🏡👇
Did a live webinar tonight for a lot more people than I anticipated discussing why I believe in 2024 multi-family CRE will experience a flash crash.
I think the distress will be substantial in particular in the B and C class space. Just uploaded it to youtube if anyone wants to
@NYP_Brooksie
Thank you for stating what everyone else was afraid to say. This team is SOFT. Softest ranger team ive ever watched. No grit, no compete, no snarl. Theyd rather play golf with their opponents then dare shove them after the whistle or god forbid go after a loose puck in the
@NewsLambert
Madness. Seems multiple bids on everything and only 1.2 months supply in the 8 towns I sell most in. 20+ bids on two houses these past 10 days. This is Northern NJ, Essex County.
This individuals tweet is a common thought by those who aren’t familiar with real estate. The average downpayment in the USA is 6%. But lets even boost it to 20% to make it a fair argument. 20% down would mean $180K down.
Over these 18 years the owner would have gained $600K in
@NimbyPatrol
The home was bought in 2005 for $900k… $1.5M is an increase of 67% over 18 years. S&P500 increased ~250% over that same time. It has been a relatively poor investment for the owner… they’re likely selling precisely because they see it as a poor investment moving fwd.
@odetakushi
An awesome study would be what % of current homeowners would be able to afford their same home with their original downpayment % and current interest rates.
Incredible data by Lance. Not sure how every real estate professional hasnt seen this. This should go viral. Amazing. Interactive map at different time periods is something I havent seen before
@chernobelskiy
If someone is a very sophisticated LP theyd understand that 7% pref doesnt necessarily mean 7% annualized cash flow distribution during the hold, right? Ive been an LP in nearly 50 deals at this point. I mean you HAVE TO know that if you’re a halfway competent LP, no?
@NewsLambert
Demand slowing down. Homes that 2 months ago that would have 10+ offers have maybe 1-2 now. Been trending that way past 5-6 weeks or so id say. North Jersey
@TheStalwart
@tracyalloway
Been talking about this for a while. People don’t comprehend whats coming. I did a webinar for our investors going over about 40 charts explaining it
@bknight20
@briannnnf
Only weird thing here is knight regularly taking exception to informed fans like Richard Kent and beat reporters like Brian who cover the team for, well, covering the team.
If I was him, I’d probably spend less time on twitter and more time watching clinic tape on how to run a
@NewsLambert
Can it be appealed? Having been in a kw office for nearly 11 years never had our broker ever tell us what to charge and agents charge all different rates. Sounds silly that theyd be found guilty of essentially price fixing.
@MacroAlf
How would higher mortgage rates lower rent inflation? Wouldnt that steer more people away from the purchase market and increase demand for rentals? Peak rent inflation is already in the rearview
@jayparsons
@AliWolfEcon
@jayparsons
Anecdotally on the brokerage 1-4 family side we are seeing the same. Theres been a big psychological shift the past month-ish. Buyers are just throwing in the towel. It’s concerning. And I do residential brokerage in North Jersey, one of the more resilient markets in the country.
@NYP_Brooksie
I think its fair to write the column questioning how much this group actually cares about hockey. No compete, no snarl, no bite. Its a really weak group mentally. Feels like playing hockey is a chore for them. Hard group to root for. Torts 2011-2012 team would wreck them despite
@Sanjeevbhatiala
Bonus depreciation. If the car is over 6,000 pounds and used for the purpose of your business then the ENTIRE purchase price is tax deductible. Net effectively if youre in the 30% tax bracket this makes a $50,000 car now just $35,000
@TheStalwart
@tracyalloway
@SoBendito
Tracy and Joe, thanks for bringing some real estate content. With that said, this guy basically was just spewing his theories. For example how he believes homeownership rate is down when thats factually not true. Would love a data based episode with
@jayparsons
What percentage of Americans do you think are aware that the U.S. homeownership rate is:
1) ABOVE the long-term average, and
2) at the second-highest rate on record outside of the late '90s through mid-2000s period leading up to the housing bubble and Great Financial Crisis?🧵
Per CRE daily, via redfin, Houston is the lone sunbelt market that cracks the top 10 in rent growth.
@jayparsons
called this going back to at least the fall. Not enough people are recognizing the story playing out in real time in Houston.
Below trend construction, permits down
There needs to be a discussion amongst the fed how inflationary 40% of homeowners not having a mortgage and the avg rate for those that do is just 3.47%. The cost of shelter is the lowest of all time. The arbitrary 2% target is unrealistic largely due to this
@LoganMohtashami
@DallasAptGP
@jayparsons
Haha love that, Barrett. Listened to
@krystalball
go on her typical biased uninformed rant yesterday trying to confirm her priors where she accused yieldstar of forcing rents up and that it has nothing to do with this chart below from Jay
@abrazomack
@NewsLambert
Still a 30 year fixed rate loan at 7% (Im using 7% as an example here) but for the buyer/borrower, due to the seller buy down they pay it as if it’s 5% in year 1 and 6% in year 2. Popular in NJ and was in OKC at a board of realtors yesterday and they were all discussing it too
@Sanjeevbhatiala
The honest answer that some people wont say aloud which has always been better a better indicator than Starbucks? Gays. Are gays moving to the neighborhood? Theres a correlation of values rising when the % of gays increase in an area.
@BullandBaird
@NewsLambert
Ive speculated the remainder of the 2020’s will have by far the lowest inventory levels adjusted to population than any time in US history.
@AustinWhittRE
I think your issue is you try to make something < .1% do seem like everyone does it. Seems like click bait/impression bait a lot of times. Imo you should focus on things that happen regularly for credibility purposes.
@AustinWhittRE
I’m sure it has happened before somewhere, but I’m on one of the biggest teams in the country, I own the largest real estate school in New Jersey and speak at all different brokerages regularly. I personally don’t know any agents who require that their clients use certain
@NewsLambert
Im telling you, if rates hit 5.5% or below the dam will break. Historic demand on the sidelines. When rates got to the low 5’s in August demand was identical to August-21 in the new home sector
@philfolmar23
great season thus far! Watched your game vs St Joe’s and you were electric. Easily a top 10 player in NJ’s class of 2025. Good luck in the postseason and hope to see Rutgers issue you an offer very soon!
@CoachMaginnis
has been watching him some Bixby! Doing an incredible job in year 1 at WP turning that program around. Lost to this same team 32-0 last year, beat them this year 35-12. Extremely well coached every week. CC:
@tschneider1014
@LoganMohtashami
We just went under contract today on our new suburban home. Got engaged 12 days ago so life is happening haha. Felt now was an excellent time to buy considering the seasonal lull in demand and feel we’ve reached peak rates/demand bottom. I think we’ll look back fortunate we
@MultifamilyMark
@JeffFeldman_
Texas has a lot of good but absolutely horrible state when it comes to property taxes. Seems like a perpetual piggy bank
@NewsLambert
@thedaniariza
Yup, North Jersey remains insane. New construction project (2 homes) was pulled from market and now being remarketed towards completion $50K above original ask. Theyll get it too. Ive never seen anything like this. Nothing coming on
@CoachDanCasey
Underrated? Maybe Kirk Ciarrocca. While his offense looks extremely simple if you dive into it and look at his efficiency numbers youd be surprised.
@jayparsons
Jay, you nailed it. I am a piece of anecdotal evidence. I live in Hoboken, NJ right across from Manhattan. I have close to $6,000,000 of my own personal funds invested in real estate and not a dime of it is in NYC or NJ because of rent control and their overly burdensome posture
@multifam_guy
Saw this one on James Eng’s youtube page from his video last week. Operator apparently neglected it down to low 70%’s occupancy and now selling for below loan balance.
@jayparsons
@NewsLambert
these are not in high rise single owner buildings but rather individual units owned by a solo owner, however almost every single rental in Hoboken NJ right now has 5+ bids and are going above asking. Truly remarkable
@RandallHouseRE
Houston has had the highest rent growth/least cuts of any major Texas market t-12. Houston also has had the LEAST amount of construction per capita t-12. You should read
@jayparsons
and
@RealPage
data.
Houston is arguably the best positioned major Texas market right now. But I
I’m not going to name them publicly but lets just say, theres a REIT with pretty decent exposure in NJ that forgot to register their rents with the rent leveling board in a certain town and are being forced to revert rents back to 2010 levels!
The crazier part? They’ve directed
@NewsLambert
The big concern that is impossible to prep for is China. Their entire economy is hanging on by a thread. It almost feels like all borderline dictatorships that they could do something irrational to try to fight off what theyve been putting off for decades as an election comes up
@2x4caster
@cullenroche
100% contingent on rates. There is CRAZY high demand due to a historic demographic patch (this is why rent growth is so high as these people get pushed to remain renters). If rates come down look out 🚀. Tell me what rates are over next few years and ill tell you where prices go
@OhRyanMead
loved the Buch point about mika and kreider only working with him. Ive been telling people, I know it wont be popular but if youre really going for the cup this season and next, you trade Othmann, Zac Jones and a 2nd for Buch at 50% retained.
Kreider-Mika-Buch
@MorePerfectUS
The two sponsors should be asked A) if they know what BTR stands for. B) what % of homes “wall street” owns. And C) why shouldnt BTR single family home communities be available for those who want to rent?
@carkerpox
Well, I’m assuming you didnt grow up in the northeast haha. Because in Jersey scrapping during pick up games is just part of the culture of hoops here
@GrahamStephan
Defining, “retire” is important. Retire as in my bills can be paid without working vs retire and be able to still live a fun life and travel is another.
@MacroEdgeRes
I’m an LP in two of their funds
1) your tweet is factually just incorrect, they did pause on one of the funds I’m in and that was the smart move until theres clarity on rate path
2) both funds I’m in are performing well overall with DSCR’s 1.25X +
3) this isn’t a stock which
@TheStalwart
When I saw their main pitch was that I should buy it because the USD was on the verge of collapsing I stopped listening to a word they said.
@OGtexasrunner
@JerryKopensky
@GRomePow
@NewsLambert
Buyers buy the monthly payment not the price, always have, always will. Data is showing their credit scores on average in 2021 were between 776-788. These buyers are completely fine. Lance’s chart actually shows how cheap their monthly payments are since they bought a year ago.
@hedgie007
@chernobelskiy
They likely went UC in March if it closes June-22 then shit hit the fan and fed dot plots shifted in a major way. But I will agree there are also some AWFUL GP’s out there as well. MHP’s should always be cash cows as cap compression isnt where return is made in that asset class
Year-over-year shift in active housing inventory for sale
Florida: +45.8%
Mississippi: +28.0%
Louisiana: +28.0%
U.S. +15.0%
New Jersey: -9.1%
Illinois: -9.8%
Nevada: -32.0%
Interactive map:
Article:
@menlobear
@nickgerli1
@EPBResearch
Adam, I really do hope youre going to ask legitimate questions here. Nick has called 13 of the past zero bubbles. He should face legitimate questions.
@MultifamilyMad
@MultifamilyRob
Misleading. End of year always sees the most attrition due to realtor board fees coming due for $400-500 for the upcoming year. Thats not to say more arent dropping now than prior years but its a misleading bit and data point
@aryal1994
My guess is that they’re implying if they got handed the keys back they’d be able to transact at a 6% cap rate or lower depending on location and class of property and be made whole.
I’d love to organize a large multi-family LP’s conference, say 500ish LP’s. ZERO sponsorships, zero selling, just straight content. The whole thing funded by an admission fee of somewhere between $250-$400ish.
Discuss checklists before investing, best practices you’ve seen of
I look at different housing markets around the US and still feel as though Greenville, SC is the most slept on market in America. You can get a 2 year old 3-bedroom/3-bath/1300 square foot townhome for $225,000!
It’s within walking distance of the Swamp Rabbit trail, downtown
@kurtneeper
@NewsLambert
Buyers dont pay for the buy down, seller does. The buy down makes alot more sense than points if the thought is to refi at a lower rate in 2 years. This will be long but I’ll do a little thread here on it
@JohnHamiltonRE
Raj & Anna were two people brought on stage perpetually for this guru. There are HUNDREDS of others with not even 1/10 their acumen who own just as many doors and are in just as bad a position. It gets very very very publicly ugly soon.
There are loans in worse shape,
Excellent webinar this afternoon by
@jayparsons
and the RealPage team. Here are the two big takeaways that I believe are easiest to implement regarding how to improve tenant retention and generally attracting new tenants in multi-family.
1) Offer your tenant credit reporting of
One of the toughest parts of real estate investing is patience. We haven’t bought an asset in what will be approaching 2 years. During this time, yes you are occupied by your property level operations, following your business plan, etc. But I’d be lying if at times you dont feel
@NewsLambert
Builders slamming on the breaks, finishing their unfinished product and pulling no more new permits. Gonna keep supply super low and when rates fall in a couple years things will be crazy again imo. Most new product in process has buyers already, granted growing cancellations