[clearfund]

It was all of the above. With small kids, we wanted a smaller town life for them to grow up in vs. the So CA pace of life.

Have never felt so unstressed in life. Last week we had a 9″ snowstorm on Wednesday, and today it was was warm sunny and the snow is 90% gone. Have never seen the kids so happy playing in the yard/snow for 4 hours/day.

The fact that apples to apples housing (schools, neighbors, etc) is apx <50% of the comparable SD housing it awesome. More college fund savings!

[clearfund]

After 42 years in OC/SD (SD since 87) we moved out of SD, out ofCA, and to Colorado. One hour north of Denver to Fort Collins.

It was a perfect fit for us to slow life down for the kids and add seasons, fishing, boating, skiing, and all around 90% of people appear to have self-selected to be here by choice vs. a job. Thus, its a the most friendly, neighborly place I’ve ever been.

different strokes for different folks.

[clearfund]

You “…don’t want to waste my time making an offer on a place.” but you want to waste you time reading 200 pages of docs/financials of a condo complex before even knowing if you can get a unit under contract at a decent price?

Get it under contract and title will email it to you during escrow for free. No charge if you cancel during your inspection period.

[clearfund]

TK – I am a commercial investment guy who used to work for in the REIT world (but now independent for a decade).

Macro: REITS are a great way to get exposure to real estate and possibly a solid, risk adjusted yield for a slice of your portfolio. REITS seem to have recovered and perhaps “overrecovered” in value. Right now REITS are not trading at any significant discount to the underlying real estate assets.

The big reits do NOT perform like a real estate investment but rather like an operating company. You get income, hopefully increasing, however you will not directly benefit with a big profit check when they sell a building.

Thus, if you are looking for more direct exposure to ‘invest in real estate’ there are other alternatives to explore (partnerships, single property REITS, etc).

MICRO: specifically, many REITs seek out high quality, stabilized assets to generate the cash they need to cover their dividends. Thus, sectors like core/CBD trophy office reits have been paying very high prices due to the ‘flight to quality’ of international captial. These bldgs have been bid up to less than 10% below their 2007/8 peak pricing…frothy to say the least. In fact, many of the more opportunistic/upside pension funds have recently backed out of the space since the bldgs have been bid up to a low 4%-5% cap rate (with full occupancy and no operational upside).

Also look for total debt (property and corporate combined) less than 60% of the total asset value. the lower the better (i.e. safer).

Thus, my suggestion this: Yes, REITS are a great way to gain exposure to real estate backed income. Put your logic hat on and either pick a property subset (property type/geography) then invest accordingly.

If you want a broad exposure, I suggest looking at the several Cohen & Steers real estate mutual funds. These guys are the best at this niche.

If income is your goal, take a look at REIT preferreds. They have high yields, but do have some potential pitfalls, however, worth educating yourself on since you will better understand the entire captial stack of the REITS you may ultimately invest in (senior debt, mortgage debt, preferred equity, common equity).

Enjoy the hunt

[clearfund]

TK – I am a commercial investment guy who used to work for in the REIT world (but now independent for a decade).

Macro: REITS are a great way to get exposure to real estate and possibly a solid, risk adjusted yield for a slice of your portfolio. REITS seem to have recovered and perhaps “overrecovered” in value. Right now REITS are not trading at any significant discount to the underlying real estate assets.

The big reits do NOT perform like a real estate investment but rather like an operating company. You get income, hopefully increasing, however you will not directly benefit with a big profit check when they sell a building.

Thus, if you are looking for more direct exposure to ‘invest in real estate’ there are other alternatives to explore (partnerships, single property REITS, etc).

MICRO: specifically, many REITs seek out high quality, stabilized assets to generate the cash they need to cover their dividends. Thus, sectors like core/CBD trophy office reits have been paying very high prices due to the ‘flight to quality’ of international captial. These bldgs have been bid up to less than 10% below their 2007/8 peak pricing…frothy to say the least. In fact, many of the more opportunistic/upside pension funds have recently backed out of the space since the bldgs have been bid up to a low 4%-5% cap rate (with full occupancy and no operational upside).

Also look for total debt (property and corporate combined) less than 60% of the total asset value. the lower the better (i.e. safer).

Thus, my suggestion this: Yes, REITS are a great way to gain exposure to real estate backed income. Put your logic hat on and either pick a property subset (property type/geography) then invest accordingly.

If you want a broad exposure, I suggest looking at the several Cohen & Steers real estate mutual funds. These guys are the best at this niche.

If income is your goal, take a look at REIT preferreds. They have high yields, but do have some potential pitfalls, however, worth educating yourself on since you will better understand the entire captial stack of the REITS you may ultimately invest in (senior debt, mortgage debt, preferred equity, common equity).

Enjoy the hunt

[clearfund]

TK – I am a commercial investment guy who used to work for in the REIT world (but now independent for a decade).

Macro: REITS are a great way to get exposure to real estate and possibly a solid, risk adjusted yield for a slice of your portfolio. REITS seem to have recovered and perhaps “overrecovered” in value. Right now REITS are not trading at any significant discount to the underlying real estate assets.

The big reits do NOT perform like a real estate investment but rather like an operating company. You get income, hopefully increasing, however you will not directly benefit with a big profit check when they sell a building.

Thus, if you are looking for more direct exposure to ‘invest in real estate’ there are other alternatives to explore (partnerships, single property REITS, etc).

MICRO: specifically, many REITs seek out high quality, stabilized assets to generate the cash they need to cover their dividends. Thus, sectors like core/CBD trophy office reits have been paying very high prices due to the ‘flight to quality’ of international captial. These bldgs have been bid up to less than 10% below their 2007/8 peak pricing…frothy to say the least. In fact, many of the more opportunistic/upside pension funds have recently backed out of the space since the bldgs have been bid up to a low 4%-5% cap rate (with full occupancy and no operational upside).

Also look for total debt (property and corporate combined) less than 60% of the total asset value. the lower the better (i.e. safer).

Thus, my suggestion this: Yes, REITS are a great way to gain exposure to real estate backed income. Put your logic hat on and either pick a property subset (property type/geography) then invest accordingly.

If you want a broad exposure, I suggest looking at the several Cohen & Steers real estate mutual funds. These guys are the best at this niche.

If income is your goal, take a look at REIT preferreds. They have high yields, but do have some potential pitfalls, however, worth educating yourself on since you will better understand the entire captial stack of the REITS you may ultimately invest in (senior debt, mortgage debt, preferred equity, common equity).

Enjoy the hunt

[clearfund]

TK – I am a commercial investment guy who used to work for in the REIT world (but now independent for a decade).

Macro: REITS are a great way to get exposure to real estate and possibly a solid, risk adjusted yield for a slice of your portfolio. REITS seem to have recovered and perhaps “overrecovered” in value. Right now REITS are not trading at any significant discount to the underlying real estate assets.

The big reits do NOT perform like a real estate investment but rather like an operating company. You get income, hopefully increasing, however you will not directly benefit with a big profit check when they sell a building.

Thus, if you are looking for more direct exposure to ‘invest in real estate’ there are other alternatives to explore (partnerships, single property REITS, etc).

MICRO: specifically, many REITs seek out high quality, stabilized assets to generate the cash they need to cover their dividends. Thus, sectors like core/CBD trophy office reits have been paying very high prices due to the ‘flight to quality’ of international captial. These bldgs have been bid up to less than 10% below their 2007/8 peak pricing…frothy to say the least. In fact, many of the more opportunistic/upside pension funds have recently backed out of the space since the bldgs have been bid up to a low 4%-5% cap rate (with full occupancy and no operational upside).

Also look for total debt (property and corporate combined) less than 60% of the total asset value. the lower the better (i.e. safer).

Thus, my suggestion this: Yes, REITS are a great way to gain exposure to real estate backed income. Put your logic hat on and either pick a property subset (property type/geography) then invest accordingly.

If you want a broad exposure, I suggest looking at the several Cohen & Steers real estate mutual funds. These guys are the best at this niche.

If income is your goal, take a look at REIT preferreds. They have high yields, but do have some potential pitfalls, however, worth educating yourself on since you will better understand the entire captial stack of the REITS you may ultimately invest in (senior debt, mortgage debt, preferred equity, common equity).

Enjoy the hunt

[clearfund]

TK – I am a commercial investment guy who used to work for in the REIT world (but now independent for a decade).

Macro: REITS are a great way to get exposure to real estate and possibly a solid, risk adjusted yield for a slice of your portfolio. REITS seem to have recovered and perhaps “overrecovered” in value. Right now REITS are not trading at any significant discount to the underlying real estate assets.

The big reits do NOT perform like a real estate investment but rather like an operating company. You get income, hopefully increasing, however you will not directly benefit with a big profit check when they sell a building.

Thus, if you are looking for more direct exposure to ‘invest in real estate’ there are other alternatives to explore (partnerships, single property REITS, etc).

MICRO: specifically, many REITs seek out high quality, stabilized assets to generate the cash they need to cover their dividends. Thus, sectors like core/CBD trophy office reits have been paying very high prices due to the ‘flight to quality’ of international captial. These bldgs have been bid up to less than 10% below their 2007/8 peak pricing…frothy to say the least. In fact, many of the more opportunistic/upside pension funds have recently backed out of the space since the bldgs have been bid up to a low 4%-5% cap rate (with full occupancy and no operational upside).

Also look for total debt (property and corporate combined) less than 60% of the total asset value. the lower the better (i.e. safer).

Thus, my suggestion this: Yes, REITS are a great way to gain exposure to real estate backed income. Put your logic hat on and either pick a property subset (property type/geography) then invest accordingly.

If you want a broad exposure, I suggest looking at the several Cohen & Steers real estate mutual funds. These guys are the best at this niche.

If income is your goal, take a look at REIT preferreds. They have high yields, but do have some potential pitfalls, however, worth educating yourself on since you will better understand the entire captial stack of the REITS you may ultimately invest in (senior debt, mortgage debt, preferred equity, common equity).

Enjoy the hunt

[clearfund]

Bearish – Yes, I am a commercial guy but not sure where you get “large multi-family complexes” from my post as there was no mention of that. However, if you bothered to read the end of my post I stated that educating oneself on how commercial works will serve you well on residential investments too.

Obviously there are good deals to be had in the residential world as many smart people have been very successful.

[clearfund]

Bearish – Yes, I am a commercial guy but not sure where you get “large multi-family complexes” from my post as there was no mention of that. However, if you bothered to read the end of my post I stated that educating oneself on how commercial works will serve you well on residential investments too.

Obviously there are good deals to be had in the residential world as many smart people have been very successful.

[clearfund]

Bearish – Yes, I am a commercial guy but not sure where you get “large multi-family complexes” from my post as there was no mention of that. However, if you bothered to read the end of my post I stated that educating oneself on how commercial works will serve you well on residential investments too.

Obviously there are good deals to be had in the residential world as many smart people have been very successful.

[clearfund]

Bearish – Yes, I am a commercial guy but not sure where you get “large multi-family complexes” from my post as there was no mention of that. However, if you bothered to read the end of my post I stated that educating oneself on how commercial works will serve you well on residential investments too.

Obviously there are good deals to be had in the residential world as many smart people have been very successful.

[clearfund]

Bearish – Yes, I am a commercial guy but not sure where you get “large multi-family complexes” from my post as there was no mention of that. However, if you bothered to read the end of my post I stated that educating oneself on how commercial works will serve you well on residential investments too.

Obviously there are good deals to be had in the residential world as many smart people have been very successful.

[clearfund]

SDSURFER – SFRs were never meant to be cash flow vehicles and thus rarely cash flow decently. You are competing with 90% owner/users who have bid the price structure up to a zero return.

I would suggest looking into the commercial real estate world as it is designed to cash flow. That is its entire purpose! Here you are competing with 10% owner users so it has not been bid up to a zero return.

We are seeing all cash yields of 6%-10% on day one plus upside. The upside I reference is not from ‘market appreciation’ (i.e. hope it goes up) but rather from increasing the cash flow by filling vacancy, etc.

Thus we’ve done deals where it had a 8% yield on day 1, then within a few months it was delivering a 10% yield.

Before jumping in, expand your horizons into the commercial side. If nothing else, it will be a great education that will serve you well on your residential investments.

[clearfund]

SDSURFER – SFRs were never meant to be cash flow vehicles and thus rarely cash flow decently. You are competing with 90% owner/users who have bid the price structure up to a zero return.

I would suggest looking into the commercial real estate world as it is designed to cash flow. That is its entire purpose! Here you are competing with 10% owner users so it has not been bid up to a zero return.

We are seeing all cash yields of 6%-10% on day one plus upside. The upside I reference is not from ‘market appreciation’ (i.e. hope it goes up) but rather from increasing the cash flow by filling vacancy, etc.

Thus we’ve done deals where it had a 8% yield on day 1, then within a few months it was delivering a 10% yield.

Before jumping in, expand your horizons into the commercial side. If nothing else, it will be a great education that will serve you well on your residential investments.

[Author]

Posts