OT: Why the real estate market is not in a bubble: Q1 2023 update video added to OP

[pmvon]

My new construction project I can't punch past 55% LTV because of the DSCR. Thanks Biden!

Biden controls LtVs and interest rates too! Lol.

 

[pmvon]

Aren't people moving there to retire or WFH?

Lots of businesses have moved south out of high tax states.

 

[jtung230]

Nah. We are selling a deal now that pencils for 70% leverage.

Just invested in a deal 65% LTV 5.10% rate 1.20 tax adjusted dcr.

Multi-family is my space. I cant speak on office though

What cap rate are you buying at and is that a 10 yr deal or 5 years? What is a tax adj dscr?

 

[RUsojo]

Also as an aside I am trying to get a construction loan to build a MXU in New Brunswick and multiple banks are telling me they're not doing construction loans right now. A lot of banks out there afraid to lend right now in the multi-family and construction areas.

Why anyone would try to build an office right now is the real question. It'd be like asking for a loan to build phone booths or a cassette player factory.

@kyk1827

Has nothing to do with building offices. Remember commercial buildings don’t get 30 yr fixed rates like residential mortgages often get (unless you get a variable rate obv).

These buildings, who have or don’t have tenants (usually do, but neither here nor there at the moment) have their 5yr, 7yr, 10yr balloons coming up and are gonna be in a tough spot as banks aren’t lending for commercial. Not even for medical space which is really hot right now.

 

[anon_0k9zlfz6lz9oy]

NYC is NYC, and while it may be a lift, an office can be converted to housing or other uses and there's a big push for that now, understandably so.

But I think the days of the NJ office park are long gone. There's a ton of value in the land when it can be made into housing. I cannot see a bank willing to put up the funds to put one up...but turn into homes, hotels, retail, definitely.

In my hometown, Roseland, they just knocking down 3 big office buildings on becker farm road. Converting land to multi family. Huge need for housing every where

 

[anon_0k9zlfz6lz9oy]

What cap rate are you buying at and is that a 10 yr deal or 5 years? What is a tax adj dscr?

Havent bought anything recently. However, even B-minus class stuff is trading low 4’s in DFW.

Any good multi-family location is still around 4% t-12 tax adjusted cap rate. Cap rate is an amateur way to analysis though imo

I didnt invest in this companies deal but it closed last week. Thought it was a little too rich for B- product. This was sub 4% t-12.

 

[anon_0k9zlfz6lz9oy]

@kyk1827

Has nothing to do with building offices. Remember commercial buildings don’t get 30 yr fixed rates like residential mortgages often get (unless you get a variable rate obv).

These buildings, who have or don’t have tenants (usually do, but neither here nor there at the moment) have their 5yr, 7yr, 10yr balloons coming up and are gonna be in a tough spot as banks aren’t lending for commercial. Not even for medical space which is really hot right now.

Well aware, its all balloon product 5,7,10 year fixed 30 year am. Or 3-1-1 bridge spread over sofr/libor/libor transitioning to sofr

 

[Knight Shift]

NYC is NYC, and while it may be a lift, an office can be converted to housing or other uses and there's a big push for that now, understandably so.

But I think the days of the NJ office park are long gone. There's a ton of value in the land when it can be made into housing. I cannot see a bank willing to put up the funds to put one up...but turn into homes, hotels, retail, definitely.

Metropark will be an interesting case study. Our parking lot is more than half empty on the "busy" Tuesday-Thursday work days, which seems to be universal in office stretch of days for many places. Many places are work from home on Mondays and Fridays.

 

[NotInRHouse]

Biden controls LtVs and interest rates too! Lol.

BUT he's also sleepy and hiding in his basement. I guess someone wakes him, he pushes the raise egg price button and then goes back to bed before he tells Chik Fil A to trigger them.

 

[NotInRHouse]

In my hometown, Roseland, they just knocking down 3 big office buildings on becker farm road. Converting land to multi family. Huge need for housing every where

Metropark will be an interesting case study. Our parking lot is more than half empty on the "busy" Tuesday-Thursday work days, which seems to be universal in office stretch of days for many places. Many places are work from home on Mondays and Fridays.

Great examples of places that are desirable, near highways and/or trains. Roseland and North Edison great schools as well. Makes sense.

 

[anon_0k9zlfz6lz9oy]

BUT he's also sleepy and hiding in his basement. I guess someone wakes him, he pushes the raise egg price button and then goes back to bed before he tells Chik Fil A to trigger them.

Derailing the thread. But lets not pretend here every single issue, inflation specifically isnt the fault of the left mandating we shut down the world for a little virus. And lets not pretend that extra bout of stimulus when biden took office had no effect. And lets not pretend the inflation reduction act isnt ironically inflationary

Now lets get back on topic and not ruin a great thread.

 

[Knight Shift]

Great examples of places that are desirable, near highways and/or trains. Roseland and North Edison great schools as well. Makes sense.

Murph and the magic tones (Blues Brothers reference) was out in the Metropark Parking lot several months ago announcing another transit village project, which, IIRC, was residential and retail.

There's a building across the street from us and a stone's throw from the Metropark train station that has been vacant for the better part of 3-4 years. Don't see that going residential, but who knows.

 

[pmvon]

Derailing the thread. But lets not pretend here every single issue, inflation specifically isnt the fault of the left mandating we shut down the world for a little virus. And lets not pretend that extra bout of stimulus when biden took office had no effect. And lets not pretend the inflation reduction act isnt ironically inflationary

Now lets get back on topic and not ruin a great thread.

There are lots of things to not pretend about. That’s the point

 

[jtung230]

Havent bought anything recently. However, even B-minus class stuff is trading low 4’s in DFW.

Any good multi-family location is still around 4% t-12 tax adjusted cap rate. Cap rate is an amateur way to analysis though imo

I didnt invest in this companies deal but it closed last week. Thought it was a little too rich for B- product. This was sub 4% t-12.

View embedded media

No way you can get 65% LTV loan at low 5% coupon on a 5yr deal with 4 cap.

 

[jtung230]

Havent bought anything recently. However, even B-minus class stuff is trading low 4’s in DFW.

Any good multi-family location is still around 4% t-12 tax adjusted cap rate. Cap rate is an amateur way to analysis though imo

I didnt invest in this companies deal but it closed last week. Thought it was a little too rich for B- product. This was sub 4% t-12.

View embedded media

That’s beating Agency pricing by a wide margin.

 

[RU205]

Murph and the magic tones (Blues Brothers reference) was out in the Metropark Parking lot several months ago announcing another transit village project, which, IIRC, was residential and retail.

There's a building across the street from us and a stone's throw from the Metropark train station that has been vacant for the better part of 3-4 years. Don't see that going residential, but who knows.

One of the Alfieri buildings?

 

[Knight Shift]

One of the Alfieri buildings?

Yeah, the smallest one, one in from the Corner of Wood Ave and Middlesex/Essex TPK, going towards Parkway on the right. Maybe they are using it as a writeoff. Was vacant for at least a year (maybe 2 or more) pre-Covid.

 

[anon_0k9zlfz6lz9oy]

No way you can get 65% LTV loan at low 5% coupon on a 5yr deal with 4 cap.

I dont know what to tell you but there is haha. You realize fannie is an enormous player here right? And thats where the loan is through. You get better terms if youre a preferred borrower. Pair that with they need to meet $X loaned per year and if youre one of those borrowers you get great terms.

 

[anon_0k9zlfz6lz9oy]

That’s beating Agency pricing by a wide margin.

What is beating agency pricing?

 

[jtung230]

I dont know what to tell you but there is haha. You realize fannie is an enormous player here right? And thats where the loan is through. You get better terms if youre a preferred borrower. Pair that with they need to meet $X loaned per year and if youre one of those borrowers you get great terms.

BS. Sounds like they bought down the rate to hit the min DSCR. Freddie is offering low 5 coupon at 55% LTV. Fannie isn’t doing better than Freddie. Agencies don’t give a sh1t who you are. If your loan doesn’t UW, you ain’t getting a loan.

 

[anon_0k9zlfz6lz9oy]

BS. Sounds like they bought down the rate to hit the min DSCR. Freddie is offering low 5 coupon at 55% LTV. Fannie isn’t doing better than Freddie. Agencies don’t give a sh1t who you are. If your loan doesn’t UW, you ain’t getting a loan.

I quite literally invested $200K in this deal last month haha. So you can believe whatever you want but as youve said previously, not your space. Whats your email, ill send it to you. 7-Year, Full-Term I/O Fannie loan at 65% ltv with at 5.33%. And another 65% at 5.10%

 

[RUskoolie]

Biden controls LtVs and interest rates too! Lol.

His piss poor handling of inflation (one of the biggest drivers of the feds raising rates) has not helped at all.

 

[pmvon]

His piss poor handling of inflation (one of the biggest drivers of the feds raising rates) has not helped at all.

Lol

 

[RUskoolie]

Lol

Truth hurts I guess. It's not funny. A lot of people hurting due to "the adults being back in charge"

 

[pmvon]

Truth hurts I guess. It's not funny. A lot of people hurting due to "the adults being back in charge"

Dude enough. A lot of factors have contributed to inflation. Assigning blame to one man and policy initiatives he signed is asinine. Contribute for sure as did the prior spending of the prior administration, as did fed policy, as did the unique attributes of the pandemic, as did deglobalization effects. Leave it alone.

 

[anon_0k9zlfz6lz9oy]

Dude enough. A lot of factors have contributed to inflation. Assigning blame to one man and policy initiatives he signed is asinine. Contribute for sure as did the prior spending of the prior administration, as did fed policy, as did the unique attributes of the pandemic, as did deglobalization effects. Leave it alone.

Inflation is 99% government driven by the left.

The left freaked out over covid and demanding the country and world be shut down which in turn led to your 3rd, 4th and 5th order consequences you laid out. Trump wanted to fully open Easter 2020 and was called an idiot. In hindsight he was right. The data is damning. He acquiesced to the pressure from the leftist scumbags because he wanted to be re-elected and not be deemed as not “following the science ™️”

 

[pmvon]

Inflation is 99% government driven by the left.

The left freaked out over covid and demanding the country and world be shut down which in turn led to your 3rd, 4th and 5th order consequences you laid out. Trump wanted to fully open Easter 2020 and was called an idiot. In hindsight he was right. The data is damning. He acquiesced to the pressure from the leftist scumbags because he wanted to be re-elected and not be deemed as not “following the science ™️”

So you want to derail your own thread. Have it. Deglobalization was already underway, deficit spending was already underway, zirp was already underway. If the president controls everything why were all of these already happening under trump? Even though trump was prez he doesn’t control but Biden as prez controls everything. Lol

 

[anon_0k9zlfz6lz9oy]

So you want to derail your own thread. Have it. Deglobalization was already underway, deficit spending was already underway, zirp was already underway. If the president controls everything why were all of these already happening under trump? Even though trump was prez he doesn’t control but Biden as prez controls everything. Lol

1) deglobalization was underway: to a degree. But pre-covid insanity by the left cpi was a shade below 2% under trump. So what changed? Ah yes, government spending and leftist covid insanity. Please dont forget the left’s top policy makers were quite literally being consulted by stephanie kelton and she was helping craft their policies. They made ZERO secret of this. The left quite literally bought the joke of what MMT is.
2) deficit spending was underway: true. However, in pre-covid trumps spending averaged $4.3 trillion a year. Biden is averaging over $6 trillion a year, a near 50% increase
3) zirp was underway: true. It had been since 2009 and despite that the average cpi from 2009 to march 2020 was well below 2%. Now something changed, what was it? Leftist Government insanity wanting to shut down everything and go full blown experimental mmt with spending, yes. Fact check, true.

Ill live debate you on this if youd like and stream for all here to see. Now i’ll start a separate thread on CE board where we can continue this convo.

 

[rutgersal]

Im not talking ground up, im talking buying existing.

A prominent nyc broker says nyc office prices are at about 2002-2003 level prices right now and thinks its a good buying opportunity. Hes got more balls and knowledge than I on that one. Office isnt my space. But ive been saying for a decade now office was dying a slow death. covid just happened to speed it up

Everything happens in cycles. Employers are realizing that people aren’t as productive when they work at home. Banks are all back, though some are going hybrid. Office market will rebound eventually, but it will take time.

 

[RU205]

Almost everyone has a political bias. The party you support does everything correctly, and the other party does everything incorrectly.

 

[jtung230]

I quite literally invested $200K in this deal last month haha. So you can believe whatever you want but as youve said previously, not your space. Whats your email, ill send it to you. 7-Year, Full-Term I/O Fannie loan at 65% ltv with at 5.33%. And another 65% at 5.10%

Fannie post their UW standards. At 65%, it’s a tier 3 loan with a min DSCR at 1.35. If the investment is a 4 cap, you don’t qualify. It doesn’t uw at 1.25 DSCR for tier 1 loan. Showing my work.

 

[anon_0k9zlfz6lz9oy]

Fannie post their UW standards. At 65%, it’s a tier 3 loan with a min DSCR at 1.35. If the investment is a 4 cap, you don’t qualify. It doesn’t uw at 1.25 DSCR for tier 1 loan. Showing my work.

Im not asking you, I’m telling you.

65% LTV, 5.33% fixed rate dallas core. $200K invested as an LP

65% LTV 5.10% fixed rate, Sarasota and Coconut Creek. $700K invested as an LP

Again, not asking you, simply telling you.

 

[NotInRHouse]

Derailing the thread. But lets not pretend here every single issue, inflation specifically isnt the fault of the left mandating we shut down the world for a little virus. And lets not pretend that extra bout of stimulus when biden took office had no effect. And lets not pretend the inflation reduction act isnt ironically inflationary

Now lets get back on topic and not ruin a great thread.

I didn't mention him, and nor was he in control of anything when "the world was shut down." And nor was he the first to mail out checks.

Who was that? Who was in control in 2020? A real mystery, that.

Oh, and inflation down since it passed.

But yes, back to the thread and the many posters on the many sides enjoying the current economy. You don't have to credit the current President, but I will take donations to RU related NIL funds instead. 😎

 

[NotInRHouse]

His piss poor handling of inflation (one of the biggest drivers of the feds raising rates) has not helped at all.

Yes that must be it.

Which countries w developed economies have lower inflation?

Let's see. UK, Conservative government, higher inflation. Shall we get into the Eurozone as well?

But let me guess, the guy in charge in 2020 didn't cause 15% unemployment and the checks he mailed out w his signature had no effect either, right?

 

[NotInRHouse]

Inflation is 99% government driven by the left.

The left freaked out over covid and demanding the country and world be shut down which in turn led to your 3rd, 4th and 5th order consequences you laid out. Trump wanted to fully open Easter 2020 and was called an idiot. In hindsight he was right. The data is damning. He acquiesced to the pressure from the leftist scumbags because he wanted to be re-elected and not be deemed as not “following the science ™️”

So a Republican President was ordered around by "the left"?

What a weakling.

And I guess countries with conservative governments, like the UK, must have lower inflation?

States that fought "the left" like Florida must have no inflation?

Here's the actual data:

- 15% unemployment
- $1200 checks with his signature
- First President since Hoover to leave office with less jobs than he started

Here's the current data:

- 3.7% unemployment
- Increased consumer spending
- People on this board who say things like "the left" never having had it so good

Inflation is going down. Enjoy the economy. It's the best in our lifetimes. You know it damn well. Look around in Hoboken and Manasquan and where ever else you go. It's crowded. Planes are full. You and your businesses are benefiting and kudos to you and the other poster here complaining who has his own business too. No need to be political about it.

 

[Knight Shift]

Almost everyone has a political bias. The party you support does everything correctly, and the other party does everything incorrectly.

I'm pretty middle of the road, and liberal on social issues. On one hand, previous guy was an unhinged lunatic egomaniac who did things that would please his base and feed his ego. On the other hand, having a very difficult time coming up with a single thing the current admin has done well. Very authoritarian and Orwellian approach to things. The abandonment of free speech principles and open debate is a head scratcher. There are always side-switchers, but have observed many former liberals (particularly classic liberals) abandon ship and declare themselves politically homeless bc they don't want to associate with the lunatic fringe on the other side.

Hoping this country can find a candidate who will unite people and bring a message of hope. It's funny how the NYT and liberal media paint anyone not reading their playbook as "right wing" They did that to Robert F Kennedy, Jr yesterday because he did a town hall on Twitter--oh the horror!

Tim Scott shredded The View crew yesterday. He seems like he could be a good candidate to unite people. Have to do more research on Robert F. Kennedy, Jr. I see he gets labeled for vax misinformation, but that is not a total disqualifying thing for some.

 

[jtung230]

Im not asking you, I’m telling you.

65% LTV, 5.33% fixed rate dallas core. $200K invested as an LP

65% LTV 5.10% fixed rate, Sarasota and Coconut Creek. $700K invested as an LP

Again, not asking you, simply telling you.

And I’m telling you Fannies lending guidelines. I’m going to guess the syndicator shows you the investment that includes total cost. The property was probably bought at a higher cap than 4 but sold to investors as a 4 cap investment.

 

[anon_0k9zlfz6lz9oy]

And I’m telling you Fannies lending guidelines. I’m going to guess the syndicator shows you the investment that includes total cost. The property was probably bought at a higher cap than 4 but sold to investors as a 4 cap investment.

Why would you buy at a higher cap rate but tell investors you're buying a lower cap rate? You're not making sense here again. My guess is you're not aware of fannies preferred borrower guidelines. And that's okay but I don't know why you keep pushing on this. Again, I'm not here to ask you, I'm here to actually tell you.

 

[jtung230]

Why would you buy at a higher cap rate but tell investors you're buying a lower cap rate? You're not making sense here again. My guess is you're not aware of fannies preferred borrower guidelines. And that's okay but I don't know why you keep pushing on this. Again, I'm not here to ask you, I'm here to actually tell you.

Because they are passing along the cost. That’s why it’s a tighter cap rate to you.

 

[anon_0k9zlfz6lz9oy]

Because they are passing along the cost. That’s why it’s a tighter cap rate to you.

What? Youre making zero sense here haha. Again this isnt your space and thats clear as day. You do realize when you invest into a syndicate you get a copy of the OM and financials of the property right? (You dont, that much is obvious).

Syndicates are brutally transparent