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Leverage Works Both Ways

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  1. From the first 12:17 video:

    Self Storage in 2023: STILL WORTH BUYING?
    Self Storage Income
    Feb 22, 2023
    Interest rates are sky-high, occupancies are dropping, rates are tanking – is Self Storage in trouble? If so, why or why not?

    So what will self storage do in 2023? Will it crash? Will it continue to flourish as it has in recent years?

    As the market changes, we have to shift our strategy to stay relevant and be able to take advantage of new opportunities. Since no one can predict what the market will do, I had to learn the hard way that you can’t be prepared for every scenario. BUT, over the years, I’ve developed strategies, techniques, and procedures to prepare for the unexpected. Let’s go over some of these strategies as well as answer some of your questions directly!

    The second 5 minute video:

    SARASOTA Housing Market Update: Will Home Prices Continue to Decline? [video]
    iannitti group
    Feb 22, 2023
    SARASOTA Housing Market Update: Will Home Prices ContInue to Decline? February 2023

    00:00​​​​ – Intro
    00:15 – Housing Inventory & Home Price Data
    01:20 – Sarasota Housing Market Data with Analysis
    04:37 – Conclusion

    The third 5 minute video:

    Presale MANIA! – Vancouver Real Estate
    Jay Coupar
    Feb 22, 2023

    Over the years, I have had many enquiries on presale construction condos. The advantage is buying a brand new condo with warranty, and the added advantage of leverage – the typical deposit structure is 5-10-15% in installments. You dont even have to close on it – just flip the contract in 2-3 years for a gauranteed profit!

    I view this thinking as extremely dangerous. Even if buying presale, you should always view it as a long term hold. If it appreciates prior to closing, go ahead and flip it – but realize that the friction costs and GST make it very difficult to “flip” condos at a profit.

    You should also realize that leverage works both ways. A speculator who bought a presale 2 years ago, for instance, and had a mortgage rate at 2% is now at close to 6% – meaning they will have to qualify, under the B20 mortgage stress test, at close to 8%. Ouch!

    Furthermore, presale condos – at least in the markets where I work – are substantially more expensive than tangible product. Right now, the projects nearing completion in the West End, Coal Harbour, and Yaletown, are pushing well over $2000 per square foot, with many ultra-luxury developments now pushing $3000 per square foot. Not Hong Kong or New York prices, but getting close.

    In contrast, I can find you a good, 10-12 year old concrete building, well run strata, in many cases in a FAR superior locations for around $1200 – $1300psft. I even know of an incredible 4 bedroom Coal Harbour condo – sure, its a bit older strata – listed at 2.8M, or close to $1000psft. The equivalent presale would like run 5.5 – 6 million dollars.

    While i wouldnt discourage anyone from buying presale, I would encourage them to first look at whats currently available in the market, and make an informed decision.

    The fourth 15:40 video:

    Who’s Buying These Homes In Vaughan, Richmond Hill & Markham Real Estate? – Feb 15
    Team Sessa Real Estate
    Feb 23, 2023

    Vaughan Home Prices, Richmond Hill Home Prices & Markham Home Prices for the week of Feb 9 – Feb 15, 2022.

  2. Uber Freight in a first-quarter market update and outlook issued Feb. 9 said that truckload supply outpaced demand in Q4. The report noted retail sales, manufacturing output and imports all decreased during the quarter.

    “When you look at both the supply and demand angles, everything was pointing to more softening in the industry,” Mazen Danaf, senior economist at Uber Freight, said. “We look at the demand side first, whether it’s the consumer side, the housing side and the manufacturing side. Everything was starting to either soften or stagnate in Q4.”

  3. Carvana reported Thursday a much wider than expected loss as a fall in used-car prices and spike in interest rates drove up costs.

    Carvana Co (NYSE:CVNA) fell more than 2% in after-hours trading following the report.

    The e-commerce used-car platform reported a loss of $7.61 a share on revenue of $2.84 billion, compared with street estimates for a loss of $2.12 a share on revenue of $3.07B.

    Retail units sold slumped 23% to 86,977, with total gross profit per unit falling by $2,347 to $2,219.

    Looking ahead, the company warned of a further drop in sales, forecasting a “sequential reduction in retail units sold in Q1 2023 compared to Q4 2022.”

  4. One example prosecutors gave involved a plan to contribute at least $1 million to a political action committee supporting a congressional candidate who champions LGBTQ rights. A political consultant asked an alleged co-conspirator to make the contribution and said “in general, you being the center left face of our spending will mean you giving to a lot of woke s— for transactional purposes,” according to the indictment, which uses the full word.

  5. Credit Suisse Group AG cut payouts on a 3.25 billion Swiss franc ($3.5 billion) real estate fund, as clients sought to pull their cash after valuations were hit by rising interest rates.

    The Credit Suisse Real Estate Fund International’s net asset value is expected to drop as much as 10%, according to a statement Friday. That will likely limit distributions to investors to as low as 35 francs a share, down from 40 francs a share, it said. Investors holding about 13.3% of the fund’s shares have asked for their money back.

    The fund’s top holdings include properties in Vancouver, Austin and Boston, according to a fact sheet.

    Credit Suisse isn’t the only firm seeing its property holdings suffer in a down market. In January, BlackRock Inc. suspended withdrawal requests on a £3.5 billion UK property fund, and Blackstone Inc’s $69 billion real estate trust hit a monthly redemption limit.

  6. Report: Some Googlers are asked to share desks as it cuts back on offices
    The Business Journals|22 hours ago
    Alphabet Inc.’s Google Cloud unit has reportedly asked employees at its offices in Sunnyvale and San Francisco to share their desks and alternate the days they use them as it moves to vacate some real estate.

    Granite Point Mortgage Trust (GPMT) Reports Q4 Loss, Tops Revenue Estimates
    YAHOO!Finance|13 hours ago
    Granite Point Mortgage Trust (GPMT) delivered earnings and revenue surprises of -188.89% and 8.17%, respectively, for the quarter ended December 2022.

    Texas has had the second-most layoffs this year. Here’s what that means for Dallas-Fort Worth
    The Business Journals|19 hours ago
    Texas has seen the second-most layoffs in the country so far in 2023. That’s according to CivMetrics, a project from the nonprofit Policy Data Institute, which has catalogued mass layoffs across

    Consumers must keep the faith — and keep spending — to avoid recession
    Philadelphia Inquirer|2 hours ago
    We are nearing the moment of truth for this business cycle, says economist Mark Zandi. The only way to avoid a recession is for consumers to stay calm and continue to shop as they normally would.

    Pimco-Owned Office Landlord Defaults on $1.7 Billion Mortgage|19 hours ago
    (Bloomberg) — An office landlord controlled b y Pacific Investment Management Co. has defaulted on about $1.7 billion of mortgage notes on seven buildings … remote work during the pandemic and recent layoffs. Values of those properties have fallen …

    1. The only way to avoid a recession is for consumers to stay calm and continue to shop as they normally would.

      Meanwhile, the Fed says they’re trying to squash consumer spending.

  7. 𝗕𝗲𝗹𝗹𝗲𝘃𝘂𝗲, 𝗪𝗔 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗖𝗿𝗮𝘁𝗲𝗿 𝟮𝟯% 𝗬𝗢𝗬 𝗔𝘀 𝗔𝗺𝗮𝘇𝗼𝗻 𝗔𝗻𝗱 𝗠𝗶𝗰𝗿𝗼𝘀𝗼𝗳𝘁 𝗟𝗮𝘆𝗼𝗳𝗳𝘀 𝗖𝗹𝗼𝗯𝗯𝗲𝗿 𝗦𝗲𝗮𝘁𝘁𝗹𝗲 𝗔𝗿𝗲𝗮 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗠𝗮𝗿𝗸𝗲𝘁

    𝘈𝘴 𝘰𝘯𝘦 𝘯𝘢𝘵𝘪𝘰𝘯𝘢𝘭 𝘣𝘳𝘰𝘬𝘦𝘳 𝘤𝘰𝘯𝘤𝘦𝘥𝘦𝘥, “𝘈𝘱𝘱𝘳𝘢𝘪𝘴𝘢𝘭 𝘢𝘯𝘥 𝘮𝘰𝘳𝘵𝘨𝘢𝘨𝘦 𝘧𝘳𝘢𝘶𝘥 𝘪𝘴 𝘴𝘰 𝘤𝘰𝘮𝘮𝘰𝘯 𝘪𝘵’𝘴 𝘶𝘣𝘪𝘲𝘶𝘪𝘵𝘰𝘶𝘴.”

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