Alan Stalcup | CRE Investor

GVA Property Management — Recent Press Coverage linkedin.com/pulse/gva-prop…

The most interesting opportunity in real estate right now is buying the debt on buildings that are in trouble. Hundreds of BILLIONS in apartment loans are coming due, and a lot of borrowers are stuck. - Values are down - Rates are up - Refinancing is hard Some lenders are just cutting their losses and selling those loans as low as 50 cents on the dollar. When you buy a discounted loan, you can earn 7% to 11% just in current income, with the potential for even bigger returns overall once paid off or if you need to foreclose. I really like the flexible options. - Work with the borrower - Take the property if needed - Or just sell the loan later when the market recovers It's a flexible position with multiple ways to win.

Private aviation started as a math problem for me. For example: My family loves to ski. Austin to Telluride on commercial = about 14 hours door to door. Change in Denver, drive from Montrose, hope the weather holds. On a private plane that same trip is about three hours. As our family grew, every hour started carrying more weight. I don't take for granted that we have the option to pick the way we travel. Generally private wins but honesty, plane, train or automobile, I just want to get from point A to point B the quickest. And when I’m not in hurry or it’s just me AA takes me anywhere I need to go. Helps to be Concierge Key. Time is the one thing you can't buy back.

@KobeissiLetter M2 at record highs while real assets have corrected 20-30% from peak Money supply thesis for real estate as an inflation hedge is intact, correction created the entry point

BREAKING: US M2 money supply jumped +4.8% YoY in February, to a record $22.6 trillion, marking the 24th consecutive monthly increase. Money supply is now ~$700 billion above the March 2022 peak. Since the 2020 pandemic, M2 has surged +$7.1 trillion, or roughly +$1.2 trillion per year. Since 2000, money in circulation has grown at an average annual rate of +6.2%. The US Dollar is losing purchasing power at a historic pace.

@JohnTPugh Lots of opportunity and fun to mix

@alan_stalcup Interesting. The owner of the first development firm I worked for had a film production company. Not a bad angle.

I’ve been dabbling in the film world lately. I think the intrigue sparked from the constant presence of creatives in my life. My wife is a painter. My daughter is studying art in college. I spent the first chunk of my career surrounded by engineers. I’ve always enjoyed films but I noticed a gap. Most filmmakers are artists first and businesspeople second. Financing this type of art is complicated and traditional banks largely stay out of it. There's a real opening for people who have a knack for both sides. As an investor, there are definitely perks. - Tax credits from states - Pre-sold distribution rights - Guaranteed minimum payouts The risk-adjusted returns are better than most realize. And sometimes it’s okay to invest in projects you like, and not need to maximize return.

@jillayne @nickgerli1 Appreciate that thanks

@alan_stalcup @nickgerli1

What's going on in Washington State? housing supply is skyrocketing, now up to 17,580 listings. That's 64% above the long-term average for March. It seems like there's an exodus of sorts playing out, with metros like Seattle and Spokane spiking on supply. Home values have already started declining in Washington, and they might drop by a lot in the next year, due to this inventory deluge. Check the situation in your ZIP at reventure.app/mobile.

@Seanfrank No luck there, in 98 there was a market that allowed enough supply to keep prices tied to local incomes LA chose restrictions over supply for decades

My wife’s parents bought a house in LA in 1998. Her dad was a Toyota mechanic. Her mom worked in payroll at the dealership. They owned a home and raised 3 kids. When I left Texas to come be closer to them, I bought a house in the neighborhood. It cost over 2 million dollars. How can young people start families in LA? A teacher in austin makes 60k a year starting. In la it’s 70k. But you can actually afford to live in austin. Have that same life my wife’s parents had. This is why people are leaving. Build houses. Lower prices. Give families a shot again.

@thesamparr a landlord lowering rent to keep a good tenant is exactly how a healthy market is supposed to work

Crazy cool how affordable Austin is. I owned a house there that I rented to people. We had to lower the rent for our tenants to keep up with market rates. Building more = good for people who want to live there!

@RealAssetsValue Per unit pricing at $630k in a market that's corrected tells you more about replacement cost dynamics than cap rate compression Denver absorbed significant supply and demand softening simultaneously

Recently reported $UDR sale in Denver provides a fun opportunity to get some insight into property-level returns from an apartment investment in a market that's gone from boom to bust. Property reported sold April 6th at $137.3m / $630k per unit (!!!). 1/

@RichardHanania Austin is the proof of concept for what supply does to rents the market added meaningful inventory and rents responded exactly as the economics suggest they should

In Austin, median rent is now $1,296. From Slow Boring. As a Californian, this number is barely believable. It's like hearing there's another part of the country where people are still getting candy bars for a quarter. Just build!!!! It really is that simple.

@DeItaone Sellers are moving toward buyers but not fast enough to restore volume the $40k average cut on a median priced home still doesn't close the affordability gap at 7% mortgage rates

HOME SELLERS SLASH PRICES AS BUYERS GAIN POWER A record 34.2% of home sellers cut prices in February, up from 31.5% last year, according to Redfin. Those who reduced prices dropped them by an average of $40,915 (7.3%), reflecting a clear shift to a buyer’s market. High mortgage rates, elevated prices, and economic uncertainty are keeping buyers on the sidelines—leaving sellers with more competition and forcing price cuts.

24% of single family home costs are due to regulation. $400k homes should only cost $300k. 40% of multifamily costs are due to regulation. $300k/unit should only cost $180k/unit. You want affordable housing? Make more housing. How? Take out redundant and needless regulation so it’s cheaper to build More will be built and more will be affordable. Period. The 50s and 60s saw a housing boom, affordable and abundant housing for everyone. No regulation, smaller homes, smaller lots and priced 2-3x median income.

@kenmcelroy Waiting is a skill, much better than forcing a bad deal

Hold real estate for the long term. Inventory is rising, making it a patient, precise game. Focus on good assets, negotiate below market comps, and do your diligence. The discipline to wait for the right deals will pay off. #RealEstateInvesting #LongTerm

@VladTheInflator AZ, FL and TX absorbed the most aggressive capital deployment during the 2020-2022 cycle 65 days on market and nearly 30% of listings taking price cuts reflects markets that got priced well beyond what local income fundamentals support at current mortgage rates

Arizona has the third worst housing market in the country, only doing better than Florida and Texas. Median days on market: 65.8 Listings with price drops: 29.2% 127 medium-sized cities, Glendale, Scottsdale, Gilbert, Peoria, Surprise, Tempe and Chandler all finished in the bottom 25 Gilbert, Peoria, Surprise and Tempe are the worst performing cities

@OneLandlord @maxdubler We need both of course

@alan_stalcup @maxdubler Landlords vs families? As a Landlord I house families, many of whom couldn’t or don’t want to buy even if supply was sufficient. Build more homes, yes — but driving landlords out just cuts supply even further and pushes rents higher. I would argue that we need both.

Someone is always going to make money on housing. The choice before us is whether public policy should make it hard to build new homes, which lets landlords get rich on housing scarcity, or whether we should let developers make money building new homes for people to live in.

New condo development has slowed significantly across most major markets. The regulatory cost to build them makes the unit economics nearly impossible for developers to underwrite at a price point first-time buyers can access. Condos are historically how people enter homeownership for the first time. When that inventory dries up, first-time buyers face a gap between what they can qualify for and what is actually available. The strategy we are working on takes existing multifamily assets and converts individual units into for-sale condos. In markets where single family homes trade at $300,000, we can deliver ownership at $140,000 to $150,000. The monthly mortgage payment on a $150,000 unit at current rates is often lower than the rent on a comparable apartment in the same market. That math opens homeownership to buyers who are currently priced out entirely. We are not solving the housing crisis at scale. 1,000 units over time is a small number. But 1,000 families gaining their first owned home changes the trajectory of their financial lives. That outcome is worth building toward.

@PaceJordanMorby Most importantly, buy when the deal works, which will look different for each buyer

🚨 REAL ESTATE HARDLY EVER GOES DOWN. PERIOD. 📷Look at 80+ years of actual home price % changes (1942–2022):Green = prices UP Red = prices Count the red years for me. I’ll wait. There are basically FIVE. One tiny dip around 1990. The 2008 crash (which was brutal… and recovered in record time). That’s it. Everything else? Straight up. Double-digit gains in tons of years. Even 19% in 2021. The doomers have been screaming “bubble” and “wait for the crash” since I was in diapers. Meanwhile, people who actually bought property got filthy rich. The ones who “waited for prices to come down”? Still renting. Still coping. Still broke. If you’re sitting on the sidelines right now thinking “this time is different”… …history is literally laughing at you. Drop your best “but interest rates / affordability / this time is different” cope in the comments. I need the entertainment 📷 #RealEstate #Wealth #StopWaiting