2CompoundValue

recovering CRE broker, over 1k transactions, across all asset classes. value add real estate sponsor. annon for my sanity, not yours.

[2CompoundValue @2compoundvalue]

Love this

[prayingforexits 🏴‍☠️ @mrexits]

This clip from The Gambler is a wonderful reminder of the importance of being able to say “Fuck You”

[Moses Kagan @moseskagan]

My experience of life so far:

You enter a tunnel at ~15 & it shoots you out at ~35 & the rest of your life is largely determined by the choices you made & the luck you had in the tunnel.

[2CompoundValue @2compoundvalue]

@Jefffeldman This

[2CompoundValue @2compoundvalue]

@CaseyMericle But it’s ok if you use all of them together right? Asking for a friend.

[2CompoundValue @2compoundvalue]

@realEstateTrent A lot of this is self inflicted. When we changed the header to a “lease verification form”, they got easier.

[2CompoundValue @2compoundvalue]

@CaseyMericle Few.

[2CompoundValue @2compoundvalue]

@litcapital More like.

[2CompoundValue @2compoundvalue]

@bethanyjbabcock @Tmac4real1 …. Then you’ll go to do a refi or a sale. And you’ll be 3-4 tenants and guarantors down the line and have no idea who you need to get to sign estoppels.

[2CompoundValue @2compoundvalue]

@BarryRoland19 Just throw some hot sauce on it. It’s science.

[2CompoundValue @2compoundvalue]

@shawngorham @shawngorham what should a liner-only job be per foot these days?

[2CompoundValue @2compoundvalue]

My area spends over $750k for each bus - 10-12 yr life. Plus over $600k per bus annually for drivers, cleaning and maint. Per bus.

So we could run 18 model 3’s PER bus. As private cars on the same bus routes. 24hs a day. No driver costs. Less maint. costs. More access. Faster rides. More rider safety. Less cost. Less emissions.

[Barrett Linburg @DallasAptGP]

Why isn't Elizabeth Warren yelling about this?!

Tesla just published their latest safety data.

Cars running Full Self-Driving have 1 major collision every 5.3 million miles. The average American car: 1 major collision every 660,000 miles.

8x safer.

I drive a Model Y. 99% of my miles are on FSD. My odds of a major collision are 0.28% per year. If I drove the average American car? 2.3%. Over a decade that's 1-in-36 versus 1-in-5.

And yet my $45K Model Y costs more to insure than a $90K SUV.

The safest driving technology ever measured gets priced like a luxury risk.

Middle-class families buying a Tesla to be safer are paying more for the privilege. That's exactly the kind of "system rigged against regular people" story Elizabeth Warren would normally be all over.

But she won't touch it. Because it would mean giving Elon a win.

It'll fix itself eventually.

[2CompoundValue @2compoundvalue]

Most cities are not prepared for the reductions in property taxes that are just finally being ‘marked to market’

Concerned about the impacts on the municipal bond market.

[Paul Vallas @PaulVallas]

Just look at the numbers on this list. It's staggering.

This is what depression level pricing looks like! Does Mayor Johnson know what this does to residential property taxes to fill the gap in the levy?  

Doubtful he does.

Small wonder there has been a $2B property tax shift from commercial to residential property since 2021.

Does the mayor know what the depopulating of the downtown does to retail and service industries?

How about Chicago’s 9000 restaurants that he has saddled with new costly mandates? 

Trick question. Of course he doesn’t.

[joey baum @joeybaum13]

in the sub $5mm space, you are playing with a lot of unsophisticated buyers / sellers and can sometimes get a great deal. you're also playing with the dentist who doesn't know what a cap rate is and is happy to outbid you and buy that strip center for 20% more than what you would have paid.

[Barrett Linburg @DallasAptGP]

GOV: We have a housing crisis. Prices are too high.

ME: I agree. Supply is too low.

GOV: So we have a plan. We’re going to subsidize demand.

ME: …What does that mean?

GOV: We’re going to give people money to buy houses.

ME: But there aren't enough houses.

GOV: Right. So we’ll help them bid harder.

ME: If you have 10 people fighting for 1 house, and you give them all cash... the price just goes up.

GOV: Then we’ll give them more cash.

ME: That’s not a solution. That’s inflation.

GOV: It’s "First Time Homebuyer Assistance."

ME: Okay, let’s back up. Why are houses so expensive in the first place?

GOV: Because we made them the perfect investment vehicle.

ME: How?

GOV: First, the 30-year fixed mortgage.

ME: That’s standard, right?

GOV: Only in America. In other countries, rates float. Here, you can lock in a low rate for three decades.

ME: Why would a bank take that risk? If inflation goes up, they lose money.

GOV: Banks don’t take the risk. They sell the loan to us.

ME: To the government?

GOV: To Fannie Mae and Freddie Mac. We guarantee the liquidity.

ME: So the taxpayer subsidizes the risk so I can have cheap leverage?

GOV: Correct.

ME: And then I get to deduct the interest?

GOV: Only on the first $750,000 of debt.

ME: That seems... high.

GOV: It used to be a million. We trimmed it.

ME: But wait. If I rent, can I deduct my rent?

GOV: No.

ME: If I buy a small business, can I deduct the interest on the loan?

GOV: It’s complicated.

ME: But if I buy a giant house, I definitely can?

GOV: Absolutely. We wrote it into the tax code.

ME: So you’re paying me to borrow money to buy a bigger house than I need.

GOV: We’re "incentivizing ownership."

ME: What happens when I sell?

GOV: The Capital Gains Exclusion!

ME: How does that work?

GOV: If you sell a stock for a $500,000 profit, you pay taxes.

ME: Roughly 20%.

GOV: If you sell your house for a $500,000 profit?

ME: What do I pay?

GOV: Zero.

ME: Zero tax?

GOV: As long as you lived there for two years.

ME: So housing is the only asset class where I get subsidized 30-year leverage and tax-free profits?

GOV: Pretty sweet deal, right?

ME: So you turned shelter into a speculative financial asset.

GOV: We call it "Generational Wealth."

ME: Okay, so demand is juiced to the moon. Can we at least build more supply to bring prices down?

GOV: Oh, absolutely not.

ME: Why?

GOV: Zoning.

ME: I own land. Can I build a duplex?

GOV: Illegal. Single-family only.

ME: Can I build a granny flat?

GOV: Only if you provide two parking spots and pass a shadow study.

ME: So you made it illegal to build cheaper housing?

GOV: We protect "Neighborhood Character."

ME: But you spend billions on roads and utilities for the suburbs.

GOV: Infrastructure investment.

ME: So you subsidize the expensive sprawl, but ban the cheap density?

GOV: Now you’re getting it.

ME: This system seems designed to keep prices high.

GOV: It is.

ME: But you started this conversation by saying we have an "Affordability Crisis."

GOV: We do. Prices are too high!

ME: So we should lower them?

GOV: No! We can’t lower prices.

ME: Why not?

GOV: Because then the voters lose their "Generational Wealth."

ME: So we need high prices for the voters... and low prices for the buyers?

GOV: Exactly.

ME: That’s a paradox.

GOV: It’s politics.

ME: So what is your actual plan?

GOV: We’re going to give first-time buyers $25,000.

ME: Okay. I’m a seller. I list my house for $400,000.

GOV: Uh huh.

ME: I know every buyer just got a free $25,000 from the government.

GOV: Right.

ME: What do I do?

GOV: You... keep the price the same?

ME: I raise the price to $425,000.

GOV: You wouldn't.

ME: I absolutely would. The buyer can afford it now.

GOV: But that just transfers the subsidy from the poor buyer to the rich seller!

ME: Econ 101.

GOV: We don’t think that will happen.

ME: Just like you didn’t think $7,500 EV credits would make Ford raise the price of the F-150 Lightning by exactly $7,500?

GOV: That was a coincidence.

ME: You are trapping us in a box.

GOV: It’s not a box.

ME: What is it?

GOV: It’s a Single Family Home with a 2.5% mortgage rate that you can never afford to sell.

ME: ...

GOV: Welcome to the American Dream.

[Charlie Bilello @charliebilello]

1. Stocks: all-time high
2. Home Prices: all-time high
3. Gold: all-time high
4. Money Supply: all-time high
5. National Debt: all-time high
6. CPI Inflation: 4% per year since Jan 2020, 2x the Fed's "target"
7. Fed: cut rates again today & will start QE on Friday

[Watcher.Guru @WatcherGuru]

JUST IN: 🇺🇸 Fed Chair Jerome Powell says December interest rate cut is "far" from certain.

[2CompoundValue @2compoundvalue]

@mmni99inc @LA_Multi_Fam This

[2CompoundValue @2compoundvalue]

Bonds have nowhere to go but sideways to up…

[Bloomberg TV @BloombergTV]

Citadel CEO Ken Griffin says investors are starting to view gold as a safer asset than the dollar, a development that's "really concerning" to him https://t.co/fHM57btVVG

[Luke Gromen @LukeGromen]

"The Debasement Trade" since COVID:

In USD: NDX up 165%, SPX up 102%, Home prices up 56%.

In gold: NDX up 7%, SPX down 18%, Home prices down 37%.

In BTC: NDX down 78%, SPX down 84%, Home prices down 87%.

[Jake Glaser | LA Multifamily @LAMultiBroker]

City of LA now considering stricter rent control:

- Lower rent increase floor from 3% to 2%.
- Lower rent increase cap from 8% to 5%.
- Eliminate 1%–2% utility increase for landlords who cover gas + electricity.
- Use CPI-Less Shelter index (excludes housing = lower increases).