#6 – 2019.10 – The SPC Greensheet

Share on facebook
Share on twitter
Share on linkedin
Share on email

Dear investor,

It has been a very busy month for sure!

Sold a couple of my turnkey rentals. One of these I had to pay a 37.7K repair bill. Full story here.

A lot of deal closings so things are very crazy.

Things should slow down very soon as I am looking to shut it down for the rest of the deal (like Lebron James not making the NBA playoffs he is on break). We put in an offer on a large Huntsville apartment and got out bid by $1M dollars LOL.

Looking forward to seeing a couple of these deals that I went into earlier in 2019 to start cashflow before the end of the year to add to the rest.

Here is the Video replay and the Greensheet (PDF).

  1. UNTOLD STORIES OF BEING A W2 LAWYER (#169) – https://simplepassivecashflow.com/lawyer/
  2. DO I NEED UMBRELLA INSURANCE? – https://simplepassivecashflow.com/do-i-need-umbrella-insurance/
  3. FITNESS TIPS AND VIRTUAL TRAINING FOR THE BUSY (#168) – https://simplepassivecashflow.com/fitness/
  4. COMMERCIAL MULTIFAMILY LENDING W/ JAMES ENG (#167) – https://simplepassivecashflow.com/167lending/
  5. JUST SOLD RENTAL 8 OUT OF 11!!! – https://simplepassivecashflow.com/saraashley/
  6. ENGINEER INVESTING IN SFH THEN MFH – JACOB AYERS – https://simplepassivecashflow.com/166jacob/
  7. LIVE COACHING CALL W/ ANOTHER ENGINEER (NON-ACCREDITED INVESTOR) EP.165 – https://simplepassivecashflow.com/165pat/
  8. SEC ADVISORY – https://simplepassivecashflow.com/sec-advisory/

  1. The Big Short’s Michael Burry Explains Why Index Funds Are Like Subprime CDOsBloomberg 19.09.4 – “Central banks and Basel III have more or less removed price discovery from the credit markets, meaning risk does not have an accurate pricing mechanism in interest rates anymore. And now passive investing has removed price discovery from the equity markets. The simple theses and the models that get people into sectors, factors, indexes, or ETFs and mutual funds mimicking those strategies — these do not require the security-level analysis that is required for true price discovery” – [Equities are intangible assets, same guy investing in water]
  2. Fannie Mae Eases Credit to Aid Mortgage LendingNew York Times – Throwback 1999 – “extend home mortgages to individuals whose credit is generally not good” – [Captain obvious]
  3. Trump signs executive order to tackle lack of affordable housingHousing Wire 19.06.25 – “According to the Census Bureau, only seven homes were built for every 10 households formed from 2010 to 2016” – [We are undersupply from a housing standpoint]
  4. Stocks and Mortgage Rates Rise!This past week home loan rates ticked up sharply from the previous week leaving many wondering — have rates bottomed?Three things affecting home loan rates:U.S./China Trade Dispute: 1) Tariffs being delayed by the U.S. and China. With economies slowing, 2) central banks are cutting rates and introducing new financial stimulus to keep the economic expansion growing, 3) August 5 – Mortgage Bonds hit a 2019 price high and have been unable to break above that price, and subsequently slipped lower creating a tough “ceiling of resistance”
  5. Fed Cuts Interest Rates for Second Time in 7 WeeksCPE 19.09.18 –  “Clearly the Fed is concerned that the economy is more fragile than has been popularly thought,” Kelly told Commercial Property Executive.  “That’s reflected in the rate cut, and also the ‘lite’ Quantitative Easing being considered.”” – [Politics at play here?]
  6. Construction Spending Slows, Reflecting Economy’s Pace – CPE 19.09.19“Nonresidential construction spending dropped 1.8 percent to $773.8 billion on a seasonally adjusted annual basis from May to June; although, spending increased 2.3 percent year-over-year, mirroring the rate of inflation. Of the 16 tracked nonresidential construction sectors, which range from office to highway and street to water supply, five recorded contraction: commercial (retail), educational, religious, communication and power. The commercial sector saw the greatest decline, shrinking 10.7 percent.” – [ITR is calling a 2019 slowdown and 2020 to get back and going up again]
  7. Six predictions for 2020 and beyondPWC Trend Report – 
    1. The global investable real estate universe will expand substantially, leading to a huge expansion in opportunity, especially in emerging economies. World population growth and increasing GDP per capita will propel this expansion. By 2020, investable real estate will have grown by more than 55% compared to 2012, according to PwC forecasts, and then will expand by a similar proportion in the following decade. 
    2. Fast-growing cities will present a wider range of risk and return opportunities. Cities will present opportunities ranging from low risk/ low yield in advanced economy core real estate, to high risk/high reward in emerging economies. The greatest social migration of all time – chiefly in emerging economies – will drive the biggest ever construction surge. 
    3. Technology innovation and sustainability will be key drivers for value. All buildings will need to have ‘sustainability’ ratings, while new developments will need to be ‘sustainable’ in the broadest sense, providing their residents with pleasant places to live. Technology will disrupt real estate economics, making some types of real estate obsolete. 
    4. Collaborating with governments will become more important. Real estate managers, the investment community and developers will need to partner with government to mitigate risks of schemes that might otherwise be uneconomic. In many emerging economies, governments will take the lead in developing urban real estate and infrastructure. 
    5. Competition for prime assets will intensify further. New wealth from the emerging economies will intensify competition for prime assets; the investment community will need to think laterally to earn attractive returns. They might have to develop assets in fast-growing but higher risk emerging economies, or specialise in the fast-growing subsectors, such as agriculture, retirement, etc. 
    6. A broader range of risks will emerge. New risks will emerge. Climate change risk, accelerating behavioural change and political risk will be key.
  8. Forever 21 Files for Chapter 11 Bankruptcy, Plans to Shutter 350 Stores WorldwideShopping Center Business 19.09.30 – “company plans to exit most of its international locations in Asia and Europe, but will continue operations in Mexico and Latin America. The Wall Street Journal reports Forever 21 could close up to 350 stores worldwide, including up to 178 In the U.S.” – [E-Commerce is not destroying these retailers but its to much debt] 
  9. Treasury Unveils Plans to Privatize Fannie Mae, Freddie MacGV Wire 19.09.8  – “The administration’s plan calls for returning Fannie and Freddie to private ownership and reducing risk to taxpayers.” Trump administration unveils plan to privatize Fannie Mae, Freddie Mac – USA Today 19.09.5[Unsophisticated investors get too excited when they see these headlines and brokers love to scare investors to buy. Don’t hold your breath on anything with the government]
  10. 5 Things You Should Know About California’s New Rent Control LawMHN 19.09.19 – [Why are you investing in California?!?] 
  11. Miami Real Estate Is About To CollapseWolfStreet 19.09.26 – [Softness in high appreciation markets]
  12. SEC Considers Expanding the Accredited Investor DefinitionWealth Management 19.06.19 – “JOBS Act 3.0, meant to spur capital formation, prompt more initial public offerings and generally expand the public’s opportunities to invest. That package passed the House of Representatives last July. One bill in that package, the Fair Investment Opportunities for Professional Experts Act, would expand the definition of an accredited investor to include education and job experience” – [I hear that they are going to make Accredited investor definition 5M and market it easier to qualify]
  13. Not a fan of self storage
  14. Home flipping profits are fallingHousingWire –  59,876 single-family homes were flipped in Q2 2019, up 12.4% from the previous quarter, but down 5.2% from 2018. This decline is primarily a result of rising home prices leading to lower flipping margins for investors. CBS News ROI of house flipping reached an eight-year low in Q2 of 2019, and while housing prices rose 4% since 2018, home flipping profits fell by 2%. CNBCthe average gross profit on a flip was $62,700, which then translated into a 39.9% return on investment, after renovation and carrying costs. That is down from a 40.9% gross flipping return in the first quarter of this year and a 44.4% return in the second quarter of 2018.”Chron points out that the fastest-growing segment of home flippers are classified as inexperienced based on CoreLogic data: “Small-time investors—people who have purchased 10 homes or fewer over the past two decades—are increasingly flipping homes rather than renting them out.”WCPO Cincinnati reports that a federal racketeering lawsuit has been filed against Build Realty—also known as Greenleaf Funding. The company markets itself as a “one-stop-shop for home-flippers looking for help with financing, including rehab costs, without a credit check.” In reality, the company reportedly scammed money out of hundreds of home flippers in the region.

 

I made some revisions with new happiness study data.

 

Joining Collective Genius!

Creating a mastermind in Hawaii of passive investors

 

Watch me work out – SimplePassiveCashflow.com/fitness

 

 

Sold a couple of my turnkey rentals. One of these I had to pay a 37.7K repair bill. Full story here.

 

Planned vacation!
Maui and Japan

 

Annoying citations from counties for tall grass.

So many people have been complaining that a recession is coming. 

Buy for cashflow simple…

 

Complete #LaneHack list

Book Report – Cal Newport – Deep Work

  • Shallow work is being more common and does not create value
  • Set yourself up: cabin in woods, get a hotel, fly on airplane
  • Serendipitous encounter where there is collaboration open office vs solo thinker
  • Hub and spoke technique
  • Buy here

 

Passive Investor Accelerator & Mastermind

-Mostly Accredited high paid professionals
-27 weeks of content
-bi-weekly Zoom Video calls

SimplePassiveCashflow.com/Journey

It’s going to be a really cool format where people take the journey together. Think like a Fraternity/Sorority without the weird stuff. When I was going through programs it was most beneficial to connect and climb the ladder with quality people. Who knows someone of your Cohorts might do a deal together or become lifelong friends or accountability partners.

If can do me a favor… If you get a chance people review leave a review for the podcast on iTunes (https://podcasts.apple.com/us/podcast/simple-passive-cashflow/id1118795347) and email simplepassivecashflow.com to a friend.

 

 

Close Menu

SEE The Deals!

Speadsheets, mindset hacks, networking opportunities and free access to the first three modules of the Passive Investor Accelerator eCourse.  Ready To Invest With us?  

Free 15 minute
Strategy Call

Our analytics tell us most people stay on this page for 78 secs…

We figure you are a self-starter… or someone to went to school for too long ;)

No baseball glove needed… there is no pitch coming 😁