Aesthetics is the silent curriculum for those raised on taste.
- Tweets 3,554
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- Followers 9,963
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All they did was tell men to work their asses off and embrace masculinity.
Crazy how people pray for their downfall.
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A ski pass in Vail is $299/day. Deer Valley is $289/day.
You can ski in the Alps for like €50-€80 a day.
We're getting scammed over here in the US!
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Let me explain why a 7.38% interest rate is a massive issue even if it’s “historically low” like I’ve been reading.
The median sale price is Q1 of 2023 was $436,800.
The median household income today is $70,784.
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Wow, Dell announced last week that they won't promote any of their employees who work from home on a permanent basis
Only employees who work 3x a week are up for promotion
First time I've seen a policy like that implemented and certainly one creative way to get people back in the office
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The 6% commission when buying or selling a home is now GONE.
This will create a huge shift in the dynamics of home buying.
Usually the 6% fee would be split equally at 3%.
It’s unclear what will happen now as far as splits but the number of real estate agents is going to rapidly decline as the commission $ is going to take a significant hit.
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Harvard Business School Class of 1986 survey reveals some incredible stuff:
- Median net income: $350k
- Median net worth: $6 million
- 19% report a net worth between $20-$100 million
- 3% met their spouse at a bar
- 1 in 4 people own more than 25 shoes (58% women, 15% men)
- More than 1 in 4 people make $1 million or more in income per year
- 8% earn more than $5 million per year
- 36% founded a company that employs more than 25 people
- 77% own people own a second car
- 42% own a vacation home
- 25% own a boat
- 10% own a full or fractional share of a private plane
- 47% have been fired from a job
- 43% have hired personal trainers
- 3% say they want more sex
- 31% say their highest priority is time, 18% say health, 13% say peace of mind
- 1% say a Harvard MBA wasn't a productive use of their time or money
- 48% it was one of the best decisions of their life
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My parents insurance bill in Florida has jumped from $2500 to $6000 in the last 3 years.
It jumped 50% this year alone.
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Put yourself on a roadmap of things you want to achieve.
- Get in shape
- Start that business
- Build relationships
You have a purpose, you’re not going to fulfill it by being lazy!
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7.38% is the average mortgage rate currently.
How is anything going to transact unless it’s a cash offer?
Never seen anything like it especially where home values are right now.
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Friend told me today that he spoke with a large franchisor of Wingstop’s (30+ stores).
Franchisor said their margins were getting crushed when chicken prices went thru the roof during Covid and they had to raise prices a few times as a result.
Now that chicken prices are back to normal, there aren’t any plans to reduce prices down.
Consumers have gotten used to these price levels and they’re hear to stay.
This is just one example but we are seeing this across the board.
Even though things may be cheaper to produce right now, the end consumer may not see much price drops at all.
That’s the Covid effect.
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Columbia University owns 320 properties worth more than $4 billion.
They are the largest private landowner in New York City.
Since they are a non-profit they are exempt from paying taxes almost all taxes.
They save $182 million annually because they have this status.
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Here's a breakdown of the Tides Equities situation and why they are now totally collapsing:
The reality is that the two founders were absolutely killing it. They bought their first property in 2016 and by 2022 they had 25+ exited deals returning a 75%+ project IRR.
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Empire Outlets is a mall in Staten Island that cost $350 million to build.
The project was completed in 2019.
It just sold for only $10 million.
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CRE crisis simplified:
2018: Building was bought for $100M with $30M in equity on a 5 year floating rate loan
2023: 5 years pass and the building is worth $70M. All equity is lost and you need to refinance or pay off the loan in full. But you don’t have money to refinance. And now the bank forecloses on the property.
This is and will continue to happen across the US for many people.
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Some of the people that are buying $50M deals are putting up less than $1M.
Let me explain:
When a buyer finds a $50M deal they get a loan from a bank.
For this example, let’s say the bank gives them 70% of the $50M.
So the bank gives $35M. Now the buyer needs to put up $15M to close the deal.
But they don’t want to put up $15M.
So they raise capital through limited partners (LPs) to finance 95% of the $15M they need to buy the property.
The LPs are willing to do this because the returns that they want are very attractive.
That leaves the buyer to fund only 750k in order to buy a $50M property.
And if that deal performs well, that 750k the buyer used will translate into multiple millions of dollars later on.
That is the power of leverage.
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Literally heard last night from someone that they WFH but barely actually work.
He said that on Thursday he stopped working at 130pm and on Friday didn’t even work.
Truly amazing stuff like this continues to go on.
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A high-value man means being well-rounded.
Money, women, friends, style, and charisma are all required.
You can be rich, but still a dork. Look at Bill Gates.
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It’s crazy. Florida just signed a law eliminating these rights. Huge, huge win. Hopefully this spreads to the rest of the country
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The richest man I know is near into his 60s and still grinds every single day.
Every day his day is jammed. Schedule is always full. When he's driving to work he's making business calls. Same thing on his way back. Has business dinners all the time.
He barely takes a vacation and when he does, business is usually involved in his day too. I remember he was meant to go skiing while in his house in Colorado and later found out he ended up working that whole weekend. Didn't even end up skiing with his family.
These are some of the people you are competing against and this is why they have an edge over you.
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In short the current interest rates are significantly lower than what they were 40 years ago, but the actual impact to consumers today is virtually higher than ever.
And hopefully through reading this thread you can see that.
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35% of US residents worth more than $100 million went to these universities:
- Harvard University
- MIT
- Stanford University
- University of Pennsylvania
- Columbia University
- Yale University
- Cornell University
- Princeton University
Education may not be for everyone but going to a top college has clearly demonstrated a better chance at wealth creation.
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Multifamily syndicator bought a property in 2021 at a 3.5% entry cap rate.
Underwrote 4.5% exit cap rate with a 5.5% stabilized yield on cost.
It’s now worth 30% less than the entire loan value.
This is a complete underwriting miss. This is not the markets fault.
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Flew in a private jet for the first time today.
You literally drive into a private terminal, walk up to your plane, and get to where you need to go.
Experience on the plane is great but not having to wait and go through security is really the best part.
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Tesla just cut their Model 3 and Model Y prices AGAIN.
It now costs $38,990 and $52,490 for the Model 3 and Model Y respectively.
How on earth is any automaker supposed to compete in the EV space?
They are doing this while being profitable.
Almost all other EV auto manufacturers are taking millions and billions in losses and charging higher prices for their vehicles.
Tesla is so far ahead of everyone. Simply incredible.
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Crystal Mall in Waterford, Connecticut:
Appraised for $153 million in 2012.
Sold last month for $9.5 million in foreclosure auction.
Ouch.
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I work at a large real estate private equity firm.
I remain anonymous account so I can speak as freely as possible without worrying about someone looking over my shoulder.
I have connected with some on this platform and welcome it.
I will never sell you anything and plan to continue to provide my real estate analysis and thoughts.
Looking forward to continuing to interact with folks on this great platform.
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Tides Equities is getting absolutely crushed.
Their capital infusion partner just backed out.
They’re burning so much cash it’s insane.
For reference they have properties that are 97% occupied that burn 500k per month after debt service.
And that’s just one property.
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The difference between commercial real estate and residential real estate is this:
In commercial real estate you can buy a $5M asset and sell for $10M within only a few years.
In residential real estate that is virtually impossible.
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I can’t really wrap my head around on how anyone would want to buy a home right now.
I’ve spoken with two people this week looking to buy a home at these obscene mortgage rates.
It’s not like they are getting some kind of steal a deal either or they’re in a price bracket where it would make sense.
Renting is so much cheaper right now.
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Bill Ackman almost single handedly took down Claudine Gay.
That man was on a mission. Glad he got it done.
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Tides Equities acquired 58 different multifamily properties worth $3.35 billion, representing 16,765 units in 2021.
That means they bought one property every 6.29 days with an average unit count of 289.
I have absolutely no idea how they did that.
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Wynn Resorts unveiled renderings for a $12 billion casino project located in NYC.
The project would include an 80-story hotel tower (which houses the gaming facility) with office buildings, apartments, and a 5.6 acre park to surround the casino.
NYC currently has no casino but the state is considering giving away 3 gaming licenses at a whopping cost of $500 million per license.
I’ve been hearing rumors about NYC getting a casino for a while now but it’s looking more and more likely that it’ll happen.
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Former Blackstone Head of Real Estate Tyler Henritze is on pace to raise more than $1 billion for his first real estate fund Town Lane.
He’ll be looking to buy warehouses, multifamily properties, and hotels in the Sunbelt region.
$1 billion is a huge sum for first fund, especially for a time period where it hasn’t been the easiest to raise.
Looks like he took some notes from his old CEO Steve Schwarzman when he raised nearly $1 billion for his first fund at 31 years old.
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With a 20% down payment a home today would have a monthly payment of $2,415.
$2,415 x 12 = $28,980
$28,980 / $70,784 = 40.94% of the median household income.
A staggeringly high number.
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Assume you buy a $10 million property at a 6% cap rate at 60% LTV.
You have a $6 million loan at a 7.5% interest rate.
That means your debt is 450k per year on 600k of NOI.
That’s 150k that you end up pocketing $4 million.
A 3.75% return per year.
T-bills are going for 5.25%+ right now.
This is why real estate has a huge problem.
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Either home values drop, rates drop, income goes up or a combination of the 3
I’ll let you decide what you think will happen.
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So with rates 11.25% higher in 1981 versus today the monthly payment as a percentage of income is actually pretty comparable.
If you got a rate in 1981 at 16% instead of 18.63%, the payment as a percentage of income turns into 39.7%, which is LOWER than what it is today.
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There are 17,660 Harvard University alumni that have a net worth that exceeds $30 million.
Don’t let anyone tell you high education can’t be a path to becoming ultra rich.
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Before Tides Equities turned upside down, they were getting pretty ridiculous returns.
See below:
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Now let’s take the year with the highest mortgage rate on record which was 1981.
In 1981 mortgage rates were 18.63%.
The median home price was $68,900 and the median household income was $22,390.
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The richest people I know are preserving their capital right now to try and stay as liquid as possible.
They are waiting for distress to hit the market so they can take advantage of great deals.
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That’s what everyone says but the reality is that incomes haven’t grown to match the cost of mortgages. Mortgage and renting as a percentage of income is higher than ever
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If you enjoyed reading this thread, please leave your thoughts in the comments and please follow @TheWolfofREI for more.
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It’s not a good day to be a holder of Dollar Tree/Family Dollar real estate.
More than 1,000 store closures was just announced earlier today that are going to take place as leases expire.
Millions in value just evaporated as cap rates are about to shoot up.
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It’s honestly a lot easier to take a business from $1M to $20M than to take a new business from $0 to $1M.
Creating a foundation, systems, and proven concept is exceptionally difficult.
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Alex Rodriguez is a huge player in the real estate game.
Yes, the famous baseball player who won multiple MVPs and the World Series in 2009.
He owns more than 14,000 units.
He will more than likely be a billionaire.
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In almost every city, the tall Arizona Iced Tea can STILL costs $.99 cents to buy.
It's been at that price for nearly 30 years and they plan to keep it at that price for as long as possible.
Absolutely remarkable.
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99% are intelligent enough. The main issue is people are lazy.
If you really want something, you have to work for it and make some sacrifices.
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With a 20% down payment a home in 1981 would have a monthly payment of $859.
$859 x 12 = $10,308
$10,308 / $22,390 = 46.04%.
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The greatest real estate investment of all time has to be the Louisiana Purchase in 1803.
This purchase alone represents 26.7% of the United States today at 828,000 square miles.
The entire United States is 3.1 million square miles.
And it only cost $15 million ($0.03 per acre) or about $420 million in today's dollars.
One of the most pivotal moments in the entire history of the United States.
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Q1 2024 is where I see mass distress in multifamily Texas market primarily driven by loan maturities and interest rate cap expirations. I know a ton due coming around that time.
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Home values are significantly more expensive now than they were and income has not kept up with home value inflation. Incomes as a percentage of people’s spending are far higher today than 1970
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When the cost of debt goes up, cap rates need to increase, which lowers real estate values.
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Last night, a friend who works at a single-family development firm told me it only took 4 days for the city to approve permits for his company's 200-home site about an hour outside of Dallas.
4 days! That's unheard of.
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Home prices have actually gone up recently because no one wants to sell their home that has a 3% mortgage rate for a 7% rate.
I think it's possible when mortgage rates drop to around 5% that there will be a flood of inventory and that's when the prices start quickly dropping.
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We were looking into potentially investing in a deal as an LP.
GP sends their underwriting over and are projecting a 35%+ IRR.
Sounds very exciting until you realize they made one major excel error which kills the deal immediately.
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Just saw a $50 million deal where the GP only puts up 300k.
Not sure how on earth they did that but that’s as big a red flag as you’ll see.
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There are RE investment shops out there that are offering LP investors 12-14% equity IRR returns.
Meanwhile other shops offer 12-14% mezzanine returns where you go top of stack behind senior debt and recoup your money first.
Why go with the first?
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Commercial real estate is pretty straightforward.
It's an income game.
No one buys it because they like the way it looks. They buy it because they want to make money.
The more money a property generates, the more it is worth.
There are two primary vehicles that affect this:
- net operating income
- debt service
When the NOI on a property increases, the property is worth more.
When debt is cheap, the property is also more valuable because it generates more net cash flow than if interest rates are higher.
If you are a good investor, you should be able to achieve step 1.
Step 2 is a little out of your hands and the reason why even if you raised NOI in the last 24 months, your property could've been less valuable than when you bought it.
When you catch interest rates lowering and increase NOI, that's when you can make big money.
And that opportunity is right around the corner.
We are near or at the peak of interest rates and when they come down sometime Q2-Q4 of next year, that's when I think the real opportunity will lie.
I'm getting ready.
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It’s actually crazy how they said inflation was transitory.
We’ve been dealing with this issue for like 3 years now.
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Indian Creek Island otherwise known as Billionaires Bunker is a 297 acre-island in Miami Beach, Florida with only 84 residents and 41 homes.
This is where the ultra-rich live.
It is home to:
- Jeff Bezos – 3rd richest man
- Tom Brady – Former NFL QB
- Norman Braman – Former Eagles CEO
- Carl Icahn – Billionaire investor
- Jared Kushner & Ivanka Trump – Real estate businesspeople
- Edward Lampart – Hedge fund billionaire
- Julio Iglesias – Famous Spanish singer
To provide perspective, Jeff Bezos paid $147 million for two contiguous lots totaling 4.6 acres in the last couple of years.
The last listing on the island was for $85 million in May for a property built in 2000.
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Another multifamily shop is trying to toss the keys on some of their properties back to the bank.
Can’t say who but it’s on multiple deals.
They just want out.
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The multifamily deals that are underwater right now don't just have an exit cap rate issue, they have a rental rate problem.
Many investment shops were underwriting extremely aggressive rents assuming the 5%+ rental growth rates across markets were going to continue.
None of those rents are even close to being hit.
If you were to sell some of these multifamily properties at the same cap rate they were bought at (4% as an example), many would still have a very difficult time getting to a 1x return.
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The billionaires and celebrities homes located on Indian Creek aka Billionaires Bunker in Miami:
Indian Creek Island otherwise known as Billionaires Bunker is a 297 acre-island in Miami Beach, Florida with only 84 residents and 41 homes.
This is where the ultra-rich live.
It is home to:
- Jeff Bezos – 3rd richest man
- Tom Brady – Former NFL QB
- Norman Braman – Former Eagles CEO
- Carl Icahn – Billionaire investor
- Jared Kushner & Ivanka Trump – Real estate businesspeople
- Edward Lampart – Hedge fund billionaire
- Julio Iglesias – Famous Spanish singer
To provide perspective, Jeff Bezos paid $147 million for two contiguous lots totaling 4.6 acres in the last couple of years.
The last listing on the island was for $85 million in May for a property built in 2000.
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The more you do something, the better you get at it.
Stick to one thing and you will master it.
Stop quitting at the first roadblock.
No one ever became successful overnight.
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If you're buying a commercial property that has below-market rents but none of the tenants renew their lease at a higher rate, you're essentially buying a vacant building at a premium cost with cash flow in the interim until lease expiration.
Get ready to pay lots of TI/LC too.
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68% of national office inventory was built before 2000.
Who can blame people for not wanting to go to an ugly, old, and uninspiring 1980s office building every day?
It's not surprising that WFH remains prominent when we have so many buildings that are old and look like crap!
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Viceroy Research believes that Arbor Realty Trust will go bankrupt!
Arbor Realty Trust is a publicly traded company that specializes in bridge loans for multifamily properties. It currently has a market cap of $2.31 billion.
The company has originated many high-risk bridge loans in recent years and many of these loans are now underwater, meaning that the value of the underlying collateral is less than the amount of the loan.
Because of this Arbor will not be able to collect on these loans and they'll lose an incredible sum of money. Viceroy thinks they'll lose so much, the company will go to 0.
In order to access liquidity to finance these bridge loans, Arbor established collateralized loan obligations but the underlying assets in this pool of investments have a weighted average debt service coverage ratio (DSCR) of only 0.63x.
Viceroy believes that no amount of rate cuts or interest rate caps will save Arbor. They think at this point they are a sure-fire thing to fail.
This is definitely one to watch over the coming months.
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Buying a property at full occupancy is a major red flag to me.
Why?
Because commercial real estate trades on net operating income.
You have no opportunity to add another lease that can boost your NOI, and, if anything, can only go down from 100%.
Your sole opportunity to boost NOI is thru increasing the existing rents, but by lacking the ability to increase occupancy I would prefer to put my money in another property elsewhere that would offer me the ability to do both of those things.
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People need to stop playing video games, stop watching porn all the time, and get outside and do something productive
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US office vacancy rate: ~20%
European office vacancy rate: ~8%
I’m genuinely curious - what is causing such a wide gap between the US and Europe?
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That’s why people like getting up early.
At 4am no one is awake. There are no distractions and you’re just focused on the pursuit of your goals.
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We hear investment bankers work 100 hour weeks all the time but what does that actually look like?
Mon: 9am-1am
Tues: 9am-1am
Wed: 9am-1am
Thurs: 9am-1am
Fri: 9am-9pm
Sat: 9am-7pm
Sun: 9am-11pm
No days off.
IB guys can be working for 2 weeks before a day off.
Respect.
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10 years is a large amount of time.
A GP I know went from <100k in his bank account to being worth nearly $500 million.
The ability to raise capital and execute on deals repeatedly will take you very far.
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The other day a GP told me that out of all the 80+ deals he's done, only one of them didn't make money.
He still paid out his LPs 1.5x on that deal.
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There are 2 big industries I think that make a lot of people a lot of money, but there isn’t a great formal education for:
- Commercial real estate
- Oil & gas business
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Restaurants aren’t going to eat that cost. Price increases have and will continue to happen
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This isn't a time to just stand by and do nothing either. This is the time to build relationships with brokers, especially in real estate. When the market does bottom out, you're going to want to be ready to pounce.
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Always wished the US had city centers like this with beautiful architecture & ambience, no cars, great restaurants, and shops like Europe currently has.
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Spoke to a developer this morning whose picking up land extremely cheap.
He says he’s buying land at 60-70% discount from their highs.
Wonder if other developers are experiencing/seeing the same.
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Some of these REIT’s are absolute dumpster fires.
Was looking at one in particular for someone and found it had $35 million in Q2 revenue and $79 million in expenses.
50% office allocation and hasn’t had positive cash flow since 2018.
Total junk.
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Blackstone is making a huge play in the multifamily space.
They’re acquiring AIR Communities, who owns 76 rental communities for $10 billion in a take-private deal.
Earlier this year they also agreed to acquire 38k single family rental units for $3.5 billion from Tricon Residential.
Blackstone President Jonathan Grey stated earlier this year that their company has seen signs of the real estate recovery come into place and that they will not wait to invest.
This $10 billion investment shows that they’re putting their money where their mouth is.
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It only costs $10k to be a franchisee of Chick-fil-A.
All you have to pay for is the franchise fee.
Chick-fil-A will pretty much pay for everything else to get the store up and running.
Normally, stores would require you to pay for the development as well as have a minimum net worth of around $500k-$1mm, but Chick-fil-A does not.
They don't even require a minimum net worth.
There are some big caveats to this though.
Chick-fil-A commands the highest royalty fees. They charge 15% of sales AND 50% of all profits.
KFC, as an example, charges 5% of sales.
Becoming a franchisee is also extremely unlikely. Chick-fil-A states that they have 60k applicants per year but only around 80 are accepted on average.
That's a .13% acceptance rate.
In addition, Chick-fil-A requires that the operator is heavily involved in the day-to-day. That means working 6 days a week.
You're also pretty much never allowed to operate another store. Other chains allow franchisees to own many different stores at a time.
All in all for this work, your total compensation is usually $150k-$250k depending on sale volume for that store.
Is it worth it?
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The volume of deals that Tides Equities did between 2020-2021 still shocks me.
They were buying 300-unit properties seemingly almost every day.
I think there was a week where they closed on 4 different deals.
How is that even possible? There’s no way you can do proper due diligence.
A major red flag in plain sight.
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People who raise money to buy real estate are incentivized to do deals all the time regardless of the economic environment because of fees.
Their downside is also protected because of these fees at the expense of the investor.
It’s a broken model but that’s how it works.
That’s why you need to be mindful of the fee structure and how much the GP is actually investing.
Are their incentives aligned with the investors? Do they have real skin in the game? Will the GP get hurt if the deal goes south?
These are the types of questions that need to be asked. It's always a red flag when the GP earns back the majority or more of their "investment" through an acquisition/development fee.
That's not real skin in the game/investment risk.
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