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Posted
4 hours ago, Fudge Nuggets said:

A lot of you are really and truly bitch ass pussies.  I hope y’all are letting your wives handle your finances / portfolios.

Hell I’ve thought about it before.  She wanted to buy a ton of AMC when it was sub 5 dollars and I laughed at her.

 

Jokes on me.

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Posted

Posted this on inflation thread too. Pretty much impossible to get a construction loan for development these days. Equity is starting to bail too.

Time to buckle up.

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Posted
4 hours ago, washparkhorn said:

Earnings setting up to be brutal. 3250 here we come. Delayed capitulation because retail doesn’t know where to go. 
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The numbers of big TVs stacked up around some stores is pretty impressive. It will be a good time to upgrade here soon.

Posted
22 hours ago, tbone_ said:

Pretty much impossible to get a construction loan for development these days.

*All* construction loans?  Doesn't the project size / build out matter?  Can small construction builds (convenience store, gas station) get access to loans?

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Posted
1 hour ago, Shaggy3.0 said:

*All* construction loans?  Doesn't the project size / build out matter?  Can small construction builds (convenience store, gas station) get access to loans?

Yeah I was talking about ones for large projects, that can take a while to repay.  The interest rates on those are killing project margins to a point the pro forma doesn’t pencil.

 

 Think double digit interest rates, with serious penalties.  Then weigh the risk that the project doesn’t occupy/produce revenue because of market conditions and all of a sudden it makes no sense to build.  So right now everyone is entitling projects then putting them on hold.

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Posted

Floating rate construction debt for new build apartment complexes is priced at about 8 all in given sofr projections and 350-375 spread. They were at 3 1Q.

The banks are seized up. No one has funds to loan because their existing loans aren’t getting paid off because other projects aren’t selling due to cap rate increases due to rising interest rates.

Cap rates on newly stabilized apartment complexes were at mid 3s earlier this year. Now the 10 year is at nearly 4. Better to just buy 10 years.

We’ve got some shit to work through.

Posted
On 10/7/2022 at 9:43 AM, Storm the Field said:

Job market is too good, which means the economy is bad, which means that the FED has to hike rates and punish the markets until enough people lose their jobs to make the economy good again. 

I think that's it, right?

S&P down 4.5% since the jobs number came in too good.

Posted
On 10/8/2022 at 7:06 PM, tbone_ said:

Floating rate construction debt for new build apartment complexes is priced at about 8 all in given sofr projections and 350-375 spread. They were at 3 1Q.

The banks are seized up. No one has funds to loan because their existing loans aren’t getting paid off because other projects aren’t selling due to cap rate increases due to rising interest rates.

Cap rates on newly stabilized apartment complexes were at mid 3s earlier this year. Now the 10 year is at nearly 4. Better to just buy 10 years.

We’ve got some shit to work through.

Anyone buying commercial real estate on a 3 cap rate is a fucking idiot to begin with.  

Posted
1 hour ago, Incredulity said:

Algorithms are defiantly written to buy below 3600.  lots of resistance there.  Hope it holds

3600, 3200, 2800 and 2200 are the numbers to look at   

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Posted (edited)
53 minutes ago, Trey3216 said:

Anyone buying commercial real estate on a 3 cap rate is a fucking idiot to begin with.  

Not with the annual rent growth that segment has been experiencing... which is only going to continue as single family developers pull back on new construction starts in what is already an undersupplied segment of the economy.  More people are going to be forced to rent, and less units are going to be delivered due to rising capital costs and construction costs coupled with discounts on the exit.  All of which means that rent growth is going to continue to  increase substantially. If you have the ability to execute cash acquisitions on MF transactions, with long money, you are going to look smart over the next several years.

Edited by Fico
Posted
Anyone buying commercial real estate on a 3 cap rate is a fucking idiot to begin with.  

Don’t completely disagree. But it was happening in a huge way.

I’m a seller though so I was down for it.
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Posted
4 hours ago, Fico said:

Not with the annual rent growth that segment has been experiencing... which is only going to continue as single family developers pull back on new construction starts in what is already an undersupplied segment of the economy.  More people are going to be forced to rent, and less units are going to be delivered due to rising capital costs and construction costs coupled with discounts on the exit.  All of which means that rent growth is going to continue to  increase substantially. If you have the ability to execute cash acquisitions on MF transactions, with long money, you are going to look smart over the next several years.

I mean, if you are a bank, yeah.   But we’re staring a major economic downturn in the face with rising rates and soon to be higher rates of both foreclosures, rental vacancies and such. Back to the days of roommates and Mom & dad for a cycle.   Cap rates below 4 are pretty much only for the Blackrock’s of the world in my book.  

Posted

I noticed that Cathie Woods took a break from lighting money on fire to write an open letter to the fed begging them to stop with the rate hikes. WSB thread goes off on a little bit of an Eminem Stan tangent that cracked me up 

https://www.reddit.com/r/wallstreetbets/comments/y0frit/cathie_wood_and_ark_invest_just_released_a_letter/

Dear Fed, I wrote you but you still ain’t callin, I wrote my ideal interest rate on the bottom 

Dear Cathie, I meant to write you sooner but I just been busy. You said your funds aren’t doing well? How deep in the red is they?

I heard about your tech stocks, man that shit is f'ed up..I think you need to stop buying them, just to give you a heads up.

And what’s the shit about us meant to be together? I say that shit makes me not want us to drop rates another. I really think you and your fund need each other, but maybe you just need due diligence better.

Dear Mr. I'm-too-regarded-to-handle-inflation-adquately, this will be the last letter i'll even sent your ass. I drank a fifth of vodka, dare me to trade? Oh, that's just my investors screaming in the trunk.

I heard about this fund manager that kept on making the same mistakes and is about to blow itself up. Come to think about it, her name was—it was you, damn
 

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Posted

She does have a point. There are deflationary headwinds building. From Ms. Woods open letter to JPow:

32937B1B-170F-4923-897F-E432DA75D0BC.thumb.jpeg.0915606a4520a0b6145bcba8c2715d16.jpeg

Bernanke, Janet and Jay Dove would have had the brrrt machines in maximum overdrive with those headwind numbers (and Cathie would have been stacking money for nothing).  Those days are over. There has been a regime change since the inflation bogeyman was reanimated. 
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Cathie needs to ramp up her pump and dump game if she is going to keep up with the vultures making money in the equity markets these days.  

Posted
19 minutes ago, Hefeweizen said:

Feels like we’re getting close to capitulation.  Either that or we’re going over the ledge.  Who fucking knows.

It's always darkest before the dawn. FOMO. TINA. Who fucking knows.

Posted (edited)

Channel checks at Costco. If the Fed wants to slow things down, an emergency 500 bips interest rate rise is needed. Place was packed.

Edited by FirstTimeCaller
Posted
49 minutes ago, fattyflattie said:

I’m at the I can only cope by making myself feel worse stage. 

Want to feel worse?  Bernanke just won the Nobel Prize for stating the obvious - “He who controls the USD brrt machine - controls the world.”

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Posted
8 minutes ago, washparkhorn said:

Want to feel worse?  Bernanke just won the Nobel Prize for stating the obvious - “He who controls the USD brrt machine - controls the world.”

07C245EF-FF92-4401-BA1E-9255108A10BE.jpeg.35463ecbdcbb3be723bf252f6f4de1cf.jpeg

Simulation is getting really lazy, or we're getting too lazy to realize it.  

Posted

Fwiw, in regards to the mortgage industry secondary market, it sounds like the banks are starting to hoard cash (this is going to reduce availability of non-depository bank Jumbo financing, non-QM lending, etc.) this is highly likely to increase borrowing costs even further.  Presumption is they see a recession incoming and possibly a bad one.  
 

Also stolen from a conference call today-mortgage rates have risen for 14 months straight, record is 27 set in the 70’s.

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