This Week’s Best of RETwit
Compilation of the best posts on Real Estate Twitter from the past week
Welcome to This Week’s Best Of RETwit where I spend hundreds of hours scrolling past millions of terrible tweets to compile only the very best of the best from real estate Twitter. Enjoy!
This Week’s Best of The Best
My first job out of college was in a combat zone trying to convince guys like this that they could trust me with their family's life.
Makes business negotiations a lot less intimidating.
#ProudVeteran
The Rest Of The Best
With all these people chopping wood all of a sudden, my dad would like to know if anyone would like to come by the farm for a few days. We have 6 fireplaces to feed and he'd love to save money on renting the splitter this year.
~Every deal has weak spots - “known unknowns” that could cause things to go south.
Don’t play hide the ball with prospective investors; most of the LPs you want likely know them, anyway.
Just explain the risks clearly, along with your strategies for mitigating.
Zestimate sucks
And it always will until Zillow, or someone else, does the hard work of cataloguing billions of interior attributes
Z = $/SF x SF
The pricing is done with "top down" data to dial in $/SF. But there's no differentiation for makeup of Square Feet inside the house
“Sorry, pal, swamped with requests to insert your purchase price into the template cover page and attach a lot of old maps and inapplicable demographics for a bank officer who needs to look at one page out of 400 for 3 seconds”
Steve Scrivener @SteveScrivener3
GM to everyone who knows that buying a 3% cap with 3.5% debt banking on 30% annual market rent increases is pure insanity.
The folks who are over-levered and cash poor get crushed.
Focus on your management. Keep cash reserves. Don’t be afraid to take some chips off the table by de-leveraging when times are too good.
Be careful.
There are more bankruptcies in RE than there are billionaires.
If you're buying 3 properties a year and have modeled the outcome of that 20 years out,
imagine buying 6 properties a year.
What would that look like?
If you can buy 3 you can buy 6. You just have to fortify your acquisitions, financing and operations. Completely doable.
A huge advantage I have that can translate to everyone is I only buy in a ~ 3 sq. mile area which has 2 zip codes.
I know everything about these 2 zip codes & barely anything just outside of it.
Focusing on a small area makes it much easier to spot rent/pricing discrepancies.
Lots of talk about creating "vertically-integrated" real estate companies
We started on that course, using fees to build an infrastructure and buy groceries, with an occasional capital gain to take some pressure off
over time we found
LMK if you are a GP actively doing OZ deals
I am putting together a Twitter list which will hopefully be a resource for OZ investors. Version 1 below
Long-term goal is to create a well educated gang of QOF investors who want to compound tax efficiently
https://t.co/5kJRQPzaCZ
Why are interest rates so low?
Uncle Ben drops some helpful information. More importantly, it does not sound anything like the exchanges I see on Twitter.
Recently submitted a LOI for a stabilized storage facility around a 4.5 cap on in place. Secondary market.
Got beat by an offer 15% above.
So that's how the storage market is going these days.
I want to be a *great* real estate investor.
*Great defined here as buying assets that serve customers and produce for investors. Not necessarily an AUM #.
Hard to identify real success with so many tailwinds.
Below is my strategy to be good in differing times.
...
You know all those "should have" deals? The ones you wish you had bought ten years ago? Why didn't you buy them then? What are the properties now that you aren't buying for the same reasons? Give those a good look, or you may have the same regrets in another ten years.
People often DM me for advice when I don’t even know what I’m doing myself
I just got into real estate under two years ago
But here’s how I analyzed my new construction projects (as well as how I do today)
1/
Lots of MF, industrial, and self-storage content on twitter. Virtually none (that i'm aware of) on MOB (medical office buildings). Here is a thread of my top 10 reasons you should be paying attention:
It can take hours every week to analyze the numbers on new listings.
Here is how I spend only minutes every week 👇
Wake up and see RE sales bro Twitter discussing negative leverage as being a minor blip as rents are destined to keep rising at a record clip. All fun and games until that IO debt turns amortizing and rents dive as quick as they rose. Devils in the details I suppose.
When you're emailing a lawyer a question, make your note as straightforward and as close to a yes / no as possible. The more circuitous the question the harder (and more expensive) it is to get a straight answer.
Extremely impressed by this attempt to get my attention.
I just wrote him an email offering a tour of my projects and some of my time to connect.
This, not DMs asking to pick people’s brains, is how it’s done.
Kudos.
This number (60 applicants/day) is basically an index of tenant power. The lower it is, the more leverage the tenant has, the less the landlord has.
There is only one way to make this number fall, and it is by building more housing.
Paul E Williams @PEWilliams_
Always leave more notes than you think you should when changing base assumptions in your models
You will thank yourself in two months
More I look at big MF deals, the more I realize that ideal model for me is to remain focused on being a big fish in the sub $10M space. Don’t graduate up to bigger deals, instead focus on better personal economics and operational advantages that are impossible to compete against
A costly lesson we've been learning lately.
Historically we put essentially all long term non-recourse fixed rate debt on our assets. Predominantly agency, was just the default play. Low risk and based on a few assumptions at the time.
Parking minimums are anti-housing. Epic thread citing 37 studies showing the harm done by parking mandates. https://t.co/jnzXjzTYN7
Aaron Carr @aaronAcarr
This week there was a lot of talk about the recession risk of short term rentals. Honestly that risk is child's play compared to the regulatory and permitting risk...
I saw this sign on a table at the @ApartmentWire National Multifamily Housing Association Annual Meeting, and it really captures the sentiment of apartment and SFR investors right now... (1/6)
READ THE NEW REPORT: Rental housing demand came roaring back in the second year of the pandemic, but the market is starkly divided by race and #renter incomes. Read our new report, out today, and join us for a livestream at 12 pm ET. #harvardhousingreport
jchs.harvard.edu/americas-renta…