Investment Thread

[budwom]

I’ve been a transactional attorney for two decades and I can’t remember a time when we weren’t rushing to get deals done to take advantage of low rates before inflation hits. Eventually it will, but I’m skeptical of any particular prediction of when.

On a separate note, I’m curious how many people here invest in real estate? I’m a much less active investor than others here, but work in CRE and personally invest in the space (although modest amounts currently).

yeah, and economists are hard pressed to explain why Big Inflation isn't upon us. It's mysterious to them, to me, to all of us. I agree, maybe it happens, maybe it doesn't, maybe 10 years after I'm dead.

[Jeffrey]

On a separate note, I’m curious how many people here invest in real estate? I’m a much less active investor than others here, but work in CRE and personally invest in the space (although modest amounts currently).

Modest amounts of residential, but no commercial.

Is COVID creating a commercial paradigm shift? Has COVID substantially increased commercial risk? If so, have expected commercial returns also increased substantially?

[CrazyNotCrazie]

Modest amounts of residential, but no commercial.

Is COVID creating a commercial paradigm shift? Has COVID substantially increased commercial risk? If so, have expected commercial returns also increased substantially?

I don't work in or invest in real estate (other than my primary residence), but I am fascinated by how this will play out in commercial. It will be very interesting to see what the "new normal" is for how people work. Companies were increasingly shifting to open floor plans where they could cram more people into smaller spaces - the old way of the newly minted VP in their 30s getting upgraded to an office from a cube was fading away. Yet despite this consolidation, there was still growing demand and construction.

Will people still feel comfortable in open floor plans? How much will people even be going to the office? I'm not sure what the end game will be.

[Bluedog]

I don't invest in Real Estate directly, but hold REITs and it has been the worst-performing fund that I hold over the last year...It runs the gamut but I think it's more commercial.

[Skydog]

Thanks for the link. Drilling down, I discovered this page, partially quoted below:

"During the 2019 legislative session, North Carolina established a required, full-year course in economics and personal finance for high school graduates. This new course will be developed by the State Board of Education and North Carolina Department of Public Instruction and will ensure all students have access to high-quality instruction on the true cost of credit, borrowing, credit scores and reports, and planning and paying for post-secondary education. The course will be required for graduation beginning with the class of 2024 and replaces a course that combined content standards in civics, government, and economics."

So my wish is coming true, and perhaps we are trending in a healthy direction, at least.

I loved the legislative push until I came to the last phrase. We need to be teaching financial fundamentals to high schoolers but do not need to be cutting back on civics and government. The typical current high school student knows way too little about civics. They have no idea why checks and balances (gov't kind) are even more important than checks and balances (financial kind). They need to understand both.

Winging it here but maybe real world financial literacy (not just "Henry gets 2.1% interest for 6 mos.") could be integrated into high school math? Kill two birds with one stone (teaching math and finance) while likely increasing engagement in the math part. Also I think one semester of a good financial class should be plenty (and infinitely more than most high schools currently teach).

[budwom]

I loved the legislative push until I came to the last phrase. We need to be teaching financial fundamentals to high schoolers but do not need to be cutting back on civics and government. The typical current high school student knows way too little about civics. They have no idea why checks and balances (gov't kind) are even more important than checks and balances (financial kind). They need to understand both.

Winging it here but maybe real world financial literacy (not just "Henry gets 2.1% interest for 6 mos.") could be integrated into high school math? Kill two birds with one stone (teaching math and finance) while likely increasing engagement in the math part. Also I think one semester of a good financial class should be plenty (and infinitely more than most high schools currently teach).

yes, they're making it sound like they can't walk and chew gum at the same time.

[cato]

Modest amounts of residential, but no commercial.

Is COVID creating a commercial paradigm shift? Has COVID substantially increased commercial risk? If so, have expected commercial returns also increased substantially?

COVID has had real impacts, some of which may simply accelerate existing trends, some of which may indeed be a paradigm shift. FWIW, CRE includes residential, since so many people live in multifamily housing (my company’s space). Industrial and multifamily were already seeing lots of demand/investment/development before COVID. Retail, of course, was already soft. Office may be the hardest hit in the immediate term, but my personal view is the some people of overestimating the long term impact.

[Jeffrey]

FWIW, CRE includes residential, since so many people live in multifamily housing (my company’s space). Industrial and multifamily were already seeing lots of demand/investment/development before COVID.

A good friend has made a career of single and multifamily housing. He consistently (over 30+ years) returns ~ 8% net annually, with relatively little risk, but substantial effort. Unfortunately, two of his three heirs have major health issues, so I’ve agreed to be the executor of his estate. Hopefully, he will continue to substantially liquidate his holdings before my involvement. Otherwise, I’ll have a lot to learn.

[bundabergdevil]

I don't work in or invest in real estate (other than my primary residence), but I am fascinated by how this will play out in commercial. It will be very interesting to see what the "new normal" is for how people work. Companies were increasingly shifting to open floor plans where they could cram more people into smaller spaces - the old way of the newly minted VP in their 30s getting upgraded to an office from a cube was fading away. Yet despite this consolidation, there was still growing demand and construction.

Will people still feel comfortable in open floor plans? How much will people even be going to the office? I'm not sure what the end game will be.

I made a pretty major career switch a few years back to prepare for starting a family. I changed from the private sector to the public sector. My travel went from 75% to 0%. Huge pay cut but complete control of my schedule. About 6 months into COVID, in chatting with former colleagues and eyeballing employment adds, I noticed a lot of companies advertising remote flexible, work from anywhere, etc. So, I decided to start applying and interviewing. A lot of BIG companies are casting a wider geographical net and have already made decisions about post-COVID workforce changes. I landed a job with a new a company, position is work from home even post-COVID with "as needed" office time, significantly less travel. Suffice to say, I think the workforce dynamics for white collar workers are going to be permanently changed.

That being said, there are certainly commercial real estate areas that are and will continue to boom. Warehousing for package storage/logistics, for example.

A good friend has made a career of single and multifamily housing. He consistently (over 30+ years) returns ~ 8% net annually, with relatively little risk, but substantial effort. Unfortunately, two of his three heirs have major health issues, so I’ve agreed to be the executor of his estate. Hopefully, he will continue to substantially liquidate his holdings before my involvement. Otherwise, I’ll have a lot to learn.

This is what I keep coming back to. I've considered a real estate investment for income but I don't like most people and am not handy. So, I'd almost certainly pay a fee to property management team. So, I've stuck to VNQ and kept an eye on some of the new investment platforms supposedly offering retail investors better access to CRE deals.

[cato]

A good friend has made a career of single and multifamily housing. He consistently (over 30+ years) returns ~ 8% net annually, with relatively little risk, but substantial effort. Unfortunately, two of his three heirs have major health issues, so I’ve agreed to be the executor of his estate. Hopefully, he will continue to substantially liquidate his holdings before my involvement. Otherwise, I’ll have a lot to learn.

I’m sure you’ll do fine if you have to learn, particularly since selling is the easiest part of the whole endeavor. PM me if you ever need some guidance. Family dynamics can be very difficult to navigate so you have agreed to what could be a challenging task. Good for you.

[Jeffrey]

I’m sure you’ll do fine if you have to learn, particularly since selling is the easiest part of the whole endeavor. PM me if you ever need some guidance. Family dynamics can be very difficult to navigate so you have agreed to what could be a challenging task. Good for you.

Thank you, I may eventually need to PM you.

To be honest, I’m expecting it to be a PIA but one of the most important things I do in my lifetime. At least one, and probably both, girl(s) would not be able to live on their own without my involvement. There’s also a major trust issue, given the substantial estate size. My wife is not pleased, but I never hesitated. The heart has it's beaches, it's homeland and thoughts of it's own.

[JNort]

I loved the legislative push until I came to the last phrase. We need to be teaching financial fundamentals to high schoolers but do not need to be cutting back on civics and government. The typical current high school student knows way too little about civics. They have no idea why checks and balances (gov't kind) are even more important than checks and balances (financial kind). They need to understand both.

Winging it here but maybe real world financial literacy (not just "Henry gets 2.1% interest for 6 mos.") could be integrated into high school math? Kill two birds with one stone (teaching math and finance) while likely increasing engagement in the math part. Also I think one semester of a good financial class should be plenty (and infinitely more than most high schools currently teach).

Civics wasn't even required at our school... You just had to have 3 history credits and civics counted as one. We were the only class and there were 12 of us, half failed it.

[bundabergdevil]

Civics wasn't even required at our school... You just had to have 3 history credits and civics counted as one. We were the only class and there were 12 of us, half failed it.

Was 'Texas' required at your school? It was required early and often at ours.

It came as some surprise to me that most people at Duke had never even heard of Stephen F Austin.

[cato]

Thank you, I may eventually need to PM you.

To be honest, I’m expecting it to be a PIA but one of the most important things I do in my lifetime. At least one, and probably both, girl(s) would not be able to live on their own without my involvement. There’s also a major trust issue, given the substantial estate size. My wife is not pleased, but I never hesitated. The heart has it's beaches, it's homeland and thoughts of it's own.

I am glad you are going in eyes open. Your friend know and appreciates how well you will do. That’s my guess.

[Bluedog]

I made a pretty major career switch a few years back to prepare for starting a family. I changed from the private sector to the public sector. My travel went from 75% to 0%. Huge pay cut but complete control of my schedule. About 6 months into COVID, in chatting with former colleagues and eyeballing employment adds, I noticed a lot of companies advertising remote flexible, work from anywhere, etc. So, I decided to start applying and interviewing. A lot of BIG companies are casting a wider geographical net and have already made decisions about post-COVID workforce changes. I landed a job with a new a company, position is work from home even post-COVID with "as needed" office time, significantly less travel. Suffice to say, I think the workforce dynamics for white collar workers are going to be permanently changed.

Congrats on the new gig. Yes, I agree. What was probably going to happen in 10-20 years was accelerated into 8 months. I work for a consulting firm that used to be on client site Monday-Thursday although many of our clients were local to our geographic locations. Our employee base was probably 70/30 as it relates to being near an office/hub. In less than a year as we've been growing, it's now 50/50 and we've been 100% wfh/remote. The cat is also out of the bag as it relates to remote work, there's no going back. There is a decent contingent that wants to travel again (young folks and no children seasoned vets alike) but I'm not sure clients will want to pay for it anymore, particularly if their own employees aren't even there. I personally am thankful as it was getting really difficult to balance family life...of course, I don't love never leaving the house for the last year and I am someone who likes being on the move, but will take the flexibility any day. I do feel for those just starting their careers and it is harder to be a people manager in this environment.

[cato]

Congrats on the new gig. Yes, I agree. What was probably going to happen in 10-20 years was accelerated into 8 months. I work for a consulting firm that used to be on client site Monday-Thursday although many of our clients were local to our geographic locations. Our employee base was probably 70/30 as it relates to being near an office/hub. In less than a year as we've been growing, it's now 50/50 and we've been 100% wfh/remote. The cat is also out of the bag as it relates to remote work, there's no going back. There is a decent contingent that wants to travel again (young folks and no children seasoned vets alike) but I'm not sure clients will want to pay for it anymore, particularly if their own employees aren't even there. I personally am thankful as it was getting really difficult to balance family life...of course, I don't love never leaving the house for the last year and I am someone who likes being on the move, but will take the flexibility any day. I do feel for those just starting their careers and it is harder to be a people manager in this environment.

From the employee’s standpoint, there is a spectrum. Some want to be 100% remote, some 100% in the office and a large chunk somewhere in the middle. Personally, I would work from home for a half day twice a week. I saw one study suggesting you’ve got maybe 10-20% on either extreme and most people somewhere in the middle.

But of course the employer’s opinion also matters. I suspect that when all of the chips fall, quite a few employers are going to want people in the workplace, at least on a regular schedule if not 40 plus hours a week.

[CrazyNotCrazie]

From the employee’s standpoint, there is a spectrum. Some want to be 100% remote, some 100% in the office and a large chunk somewhere in the middle. Personally, I would work from home for a half day twice a week. I saw one study suggesting you’ve got maybe 10-20% on either extreme and most people somewhere in the middle.

But of course the employer’s opinion also matters. I suspect that when all of the chips fall, quite a few employers are going to want people in the workplace, at least on a regular schedule if not 40 plus hours a week.

I agree that most employers will ideally want employees in the office. But the flip side is that having fewer people in the office can potentially save them real estate costs. Companies that weren't previously flexible about employees working from home will now have to be.

For long-term employees, many would likely prefer to be largely remote. But for new employees, both those who are just starting out and those who are new to the company, it is often really valuable to be in the office and have others around you. I started a new job on April 6, so I have never been in the same place as my colleagues. Most of my role is doing things I have been doing for years, so I didn't need to be taught how to do the job, more of how this company does it. It would be much easier if I was sitting a few feet away from my colleagues and could turn and ask a question - we have screen sharing technology and such but it is just not the same. And the job has not been nearly as enjoyable for me without the camaraderie of being together. So for the sake of employee development, companies are going to often want their employees spending some time in the office.

Business travel will be an interesting question. Some clients will want consultants, etc. on site. Others would rather save the travel money. I am curious what the travel industry is anticipating.

The increased acceptance of remote working also opens up larger talent pools - companies will be more willing to hire employees in remote locations without forcing them to relocate. This seemed to be a growing trend anyway, but it should accelerate now. I have heard that companies are making pay adjustments for those who are working from remote locations, i.e. if you work for a NY based company but want your home base to be Buffalo, you might take a cut off the expected NY salary.

[Skydog]

Was 'Texas' required at your school? It was required early and often at ours.

It came as some surprise to me that most people at Duke had never even heard of Stephen F Austin.

Can confirm, having grown up in Texas. I don’t know no stinkin world history but I can tell you all about about Sam Houston.

[camion]

I came across this ad while perusing Texas weather stories. Options, safe? I have considered options to be heading in the not safe direction.

See How Some Retirees Use Options Trading As A Safe Way To Earn Income
TradeWins

[bundabergdevil]

Can confirm, having grown up in Texas. I don’t know no stinkin world history but I can tell you all about about Sam Houston.

I know plenty about world history. There's Texas, then there's the rest of the world!