If a building has tenants it's straightforward to value it, no need for comps or sqft calculations.
How long are those tenants planning to stay?
Check their leases, apply a vacancy rate of 5%-15% depending on history or estimation.
The frustration of trying to invest in my hometown
121–130 of 140 posts
Re: The frustration of trying to invest in my hometown
#122If a building has tenants it's straightforward to value it, no need for comps or sqft calculations.
Assuming no major repairs required.
Repairs are estimate'able and often increase the value of a building by allowing for the increase of rent making the current leases a floor of value. The roi is relatively straightforward. Buildings are some of the simplest assets.
Re: The frustration of trying to invest in my hometown
#123Earlier quoted context omitted.
You might be right about the "most" qualifier (although I hope you're not) but have you been paying attention to the protests and media/editorial coverage of the black lives matter movement? It seems many white people are finally starting to grasp the idea that black people have always been severely disadvantaged in this country. A good example is the popularity of the "white fragility" concept and a broader effort t…
I partly base the 'most' part on seeing how widespread the idea is here on HN, which I generally consider to consist of reasonable, and mostly liberal leaning, white people. Honestly, though the BLM movement is a nice gesture, it seems mostly prompted by the string of high-profile police brutality cases, and limited to that. I haven't seen a real agenda of change beyond that, like, for example, the suggestion of repa…
Yeah, I agree that it's not nearly enough yet. The level of support for defunding police to fund social programs was surprising to me but of course our presidential candidate doesn't seem to be on board so that's not great.
But yeah, there's been a substantial increase in conservative viewpoints here lately. Not that they're all racist, but I see a lot more racist dog whistling here than I used to. It's really unfortunate because it means anything politically charged tend to get flagged really quickly. I do appreciate seeing it in a way as it keeps me aware of just how popular those viewpoints are even among some otherwise talented people. But it does shut down a lot of productive discussion as well.
Strange times.
Re: The frustration of trying to invest in my hometown
#124I hate these kinds of articles. There are thousands of reasons why this gentleman was denied a loan for redevelopment of these properties, and it is just taken as a truism that it must be racism. The article doesn't even attempt to justify this view, and simply expects the reader to take it at face-value. This is serious stuff. If there is institutional racism, then we need to stamp it out. You cannot be frivolous wi…
> debt is the fastest way for a new business to go underwater. Starting a business is hard enough, and when you have debt hanging over you, it makes it so much harder to survive because business is cyclic - you have bad quarters and good quarters, and debt will inflate a bad quarter and put a damper on the good quarters. Meanwhile in startups: https://www.lightercapital.com/blog/startups-turn-to-non-dil...
Oh man - good luck to them. And if they think debt isn't dilutive, they should just wait and see what happens when their runway runs out from underneath them (and it will because startups and startup founders are terrible at estimating revenue) and they can't pay back the note.
Re: The frustration of trying to invest in my hometown
#125Earlier quoted context omitted.
Check out the area where he wants the bank to “invest.” 608 19th street Ensley. Look on Google Streetview and Google Earth. Roofs have collapsed. Half the windows around there are smashed. A few large holes in walls. What would you value buildings in that area at?
Researching deeper, I found Ensley was originally built as an industrial town for a massive US Steel plant. that plant is now gone. If the jobs are gone, its a tough proposition to invest in the neighborhood.
There are plenty of boom/bust towns in the US where investment has netted benefits. This entrepreneur isn't trying to turn everything in the town around, nor would that be a requirement of any investment.
Re: The frustration of trying to invest in my hometown
#126Earlier quoted context omitted.
> ... he would have little trouble getting a loan. Here’s the crux. If you’re willing to argue that he should have little trouble, then excellent: we’ve got a barometer for whether discrimination is a factor.
Sorry, I’m not following?
You’re saying that if the details (the ones you mentioned being “enough [paying] tenants to move the needle” and “the buildings were up to code“) were in place that his loan acceptance would be guaranteed, but if the article is correct and he’s not getting the loans because of discrimination, then he wouldn’t get the loans even if the details were all correct.
So I’m saying that if your argument holds and he would be all but guaranteed to get the loans with the details sorted out and he doesn’t get the loans, then you would essentially have to agree that discrimination is a factor.
Re: The frustration of trying to invest in my hometown
#127It is just depressing to read these comments. Most of these are arguing that it is not a good investment for the banks to invest in a high crime rate area. Well if it is not the banks, who else? If it is nobody, are these areas condemned to be in this state forever? It just shows how broken the American society and psyche has become. I am sure even if the local, state or federal government try to make the same "bad"…
The government should do its job of preventing crime first and foremost.
Re: The frustration of trying to invest in my hometown
#128Earlier quoted context omitted.
Meanwhile the buyer in the white-majority area continues to buy 8, enjoys a higher leverage for the same interest, and makes a higher profit. And so it repeats. Leverage is forgiven when the faceless metaphorical person does it but, when it's given a black face, suddenly the black community as a whole has to answer to you? Why didn't GM simply not go bankrupt?
What interest are you talking about? The article said he had money to pay for 8 buildings in cash and he wanted to loan to renovate them. I suggested that if you can't get a loan you should tune down your ambitions a bit. There are many white people who can't get a loan too, tune it down with the racist us vs them thinking. It's not like all white people gain from that one person getting more leverage. I was talking…
I know what the article says. A person who can't get a mortgage on 8 won't be able to get a mortgage on 4 at the same rate as another person who can get a mortgage on 8.
>I suggested that if you can't get a loan you should tune down your ambitions a bit.
This is not about the ambitions of the individial in the link, it's an issue of structurally unequal differences that make it harder for black areas to see investment.
>tune it down with the racist us vs them thinking. It's not like all white people gain from that one person getting more leverage.
>I was talking about doing this to remove the statistics that cause the apparent racism, while you want to keep perpetuating the same mentality. Wake up or keep wondering why you are still losing.
Please stop telling me what I'm thinking.
Re: The frustration of trying to invest in my hometown
#129Earlier quoted context omitted.
A) They are doing it B) Markets aren't perfect C) You have to fight against, or change the influence of (through, say, commentary in the media), the government's funding and regulation. >Are the shareholders mostly white? It's my understanding that most large investors are pension funds, insurance companies and the like, not individuals. Who owns and benefits from the funds?
If "they" are doing it, where's the issue? Markets may not be perfect, but they're not that bad, especially when huge profits are waiting to be collected with little risk. > Who owns and benefits from the funds? Everybody that gets any kind of pension or has any kind of insurance. Is your point that the majority of those may be white and therefore they should've let them crash?
> If "they" are doing it, where's the issue? Markets may not be perfect, but they're not that bad, especially when huge profits are waiting to be collected with little risk.
See C
>Is your point that the majority of those may be white and therefore they should've let them crash?
If you truly think that's what I'm saying, we're on very different pages. The pensions have greater political power than the people in black areas. Both of them have the same problem - an unfair pressure that drives costs of lending up - but when it affects the majority rich and white investors, spending money to fix it is much more palatable.
Re: The frustration of trying to invest in my hometown
#130Earlier quoted context omitted.
They are not public services. And yet the public does bail them out which suggests a symbiotic relationship with the economy and that banks have some responsibility to the greater whole.
> yet the public does bail them out Involuntarily, due to corruption of public officials. Don't read too much into it. There have been some attempts to run banks in an "altruistic" manner. I don't know of a successful one, just failures.
> Involuntarily, due to corruption of public officials. Don't read too much into it.
Haha! "Please disregard any obvious counterexamples to my broken ideology."