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Non-Tech : Investing in Real Estate - Creative Opportunities
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To: John Vosilla who wrote (2659)5/28/2019 9:17:15 AM
From: E_K_S2 Recommendations

Recommended By
toccodolce
togrok

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I am also monitoring the $US as an indicator for US real estate. If/when that crashes how does that compare to other currencies (Euro/CDN/US vs Yuan). One of my Black Swan event scenarios is a loss in $US value of 20%-30%. Will Vancouver property then appear to have better value (probably not and will still need to drop in price)?

Not sure but I am also looking at commodity prices (currently at/near multi year lows for lumber & copper) so the cost of new construction will only go up in price IMO. Any fall in $US will just amplify this cost so, maybe built and/or remodel US real estate will hold their value better than new construction projects.

The last unknown is the future cost of ownership of real estate. Specifically, I am looking at high State/County property tax areas. Earlier this month there was a list of the top Cities w/ unfunded pension liabilities and San Jose CA was No. 5 on that list (around $48K/person). The only way to get that paid other than the City selling assets (land/buildings) is to raise property taxes.

I also expect these Cities w/ huge unfunded pension liabilities will raise new building permit fees substantially in the future. So all associated costs of (1) building/permits, (2) property tax, (3) utilities and even (4) home owner's insurance will be higher as a percentage of the investment.

Like you pointed out, the areas of opportunity will be those areas where Cities/Counties have solid balance sheets (no unfunded pension liabilities, new infrastructure, expanding property tax base and new manufacturing opportunities). Seeing this here in Nevada w/ Google and TESLA expanding operations.

Also, many similar middle America Counties/Cities will present excellent opportunities if/when we see the next real estate bottom of the cycle. Future infrastructure investments will be important to attract investment capital, so that may be something to follow. NV created new enterprise zones outside of Reno to attract manufactures (ie jobs) and in 2 years created a huge SFR and apartment building boom.

More Food for thought.

EKS
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