Sell or keep - rental unit

Bay Area
25

I agree with you on most postings re: remote working trend. I think it’d only work for the most mature companies with well-designed processes (on everything - development, product design, HR etc), and the bulk of startups will suffer from productivity drop.

But I am concerned about H1B / OPT being blocked - yes this may be a short term thing, but IF it continues, it’s literally a death sentence for BA. When COVID started, GOOG / FB didn’t lay off people, but they did cancel on a bunch of office constructions on the peninsula. The tech companies’ stocks may still go higher. But if the high paying jobs are reduced in SV, it’ll translate to RE prices in BA.

Case in point: SFHs in PA / LA / MV in 2M~3M are still selling like hotcake, pending in 3~5 DOM. But THs/Condos are not moving. One explanation is: folks with kids & other ties in area now need a larger home because everyone is WFH. Younger folks (target for THs/condos) already started moving out of BA. But in 5 years from now, these millennials / Gen-Zs are precisely the ones who we expect to be moving up to SFHs.

I agree that partial remote work will never work. But if 100% of team is remote, companies are figuring out that it doesn’t hurt the productivity. So why not move the entire eng team to Berlin? To Singapore?

On living in US: I was just in SF earlier today. Apparently the fireworks for 7/4 is cancelled everywhere, so they started selling firecrackers for $0.14 a pop. So these idiots bought a bunch & started firing firecrackers everywhere, in densely populated areas. Driving back home down 101, I felt like being ambushed by a SWAT team with all these firecrackers going off right next to the highway. Will the police have capacity to help them to senses?

Apologies for the grim view. I guess I’m tired - I thought at least in BA, we’re the smart ones. But if the general public doesn’t seriously become much more aware & educated, we’ll continue to experience these conflicts. Another George Floyd. Another world leading Covid cases.

Would appreciate if you or anyone here convince me otherwise - we really like BA, and genuinely believe we’re better than the rest of US (except for the damn heat in SJ :slight_smile: ). I still want to go back to a cute work/live loft near Embarcadero, and not have to deal with crazy homeless person every 20 ft. When my wife goes out in Hayes Valley, I don’t want to worry about her getting around in Uber. Unfortunately, recent events certainly made things worse, it seems. :frowning:

Thanks for this - giving it another 12 months definitely sounds like a great advice.

2 Likes
26

Is your wish and is not based on objective assessment. You do that too often e.g. SHOP.

27

If you own property remotely you need a local partner. A trusted family member or friend. Or like I do, invest in a partnership that puts together a fund to build large MF developments. Individual houses aren’t worth the hassle if you are more than 1.5 hrs away. Especially if they are negative cash flow.

1 Like
28

The problem with many BA residents and Californians in general is the belief that CA is or was a leading state in country (in science, culture, politics etc) because some unknown power made it great.
So, the people of CA/BA may keep doing the bad, and make wrong decisions, and the state will still remain a leading state. If you do good, good things will happen, if you do bad, bad things will happen. There is no mysterious force to make CA great. What many people do not appreciate is that we, the residents of the state, are the ones who make whatever the state becomes, good or bad. The burden of making the BA region or CA state the greatest on earth is upon our shoulders.

1 Like
29

:+1: Actually in Singapore, government is worried that the remote work would go to USA because cost of living in Singapore is very high :slight_smile:

30

I have proven you wrong :confounded: Previously I have rentals in Singapore and Austin. Now I have rentals in Cupertino and Singapore.

31

The risk with this approach is that if market goes down. you may not have cash at the time to buy another property or stock as your capital is tied in this property and this property may not even sell. you said rent are going down than just rent for next two years. suppose you sell it in January 2021. You can pay tax on that 18 months later with extension. this extra 18 months is time to invest.

32

You just got lucky. I know hundreds of people in the business and have heard lots of stories of property management incompetence and theft. I had a property manager in Long Beach steal $500,000 from us on our Ventura self storage. The FBI said it was too small amount for them to be bothered with.
In business you have to be able to trust your partners, venders and employees. Hard to do if they know you are not watching them.
My friend had a luxury condo in Cancun. The manager was renting it out without permission and keeping the rents. Also stole items from the condo. Even though my friend was fluent in Spanish he was defenseless. The farther away you are the more risk. Unless the cap rate is double why take risks far away from home. Buy a REIT or invest with a bigger player.

3 Likes
33

The real reason for China stocks: Even though China is not providing correct figures on Coronovirus, the can not escape from associated real impact. The big investing community assess the clear risk on the impact of economy and not coming forward to invest in such stocks. When the real economy comes back,after a possible medicine, see at that time !

34

You are talking like those journalists and news sites, giving reasons to what is happening or conjured to have happened.

35

Not really, For example, there are companies take satellite images to count how many TSLA cars are going out of factory (This one is famous…you can google it) and act on it for this own analysis.

Those big banks such as GS, MS, JPM…and big fund managers…etc subscribe to statistics, private data and invest based on their analysis. They are the market makers. These information is not available to us unless we pay huge subscription.

Believe it or not, I will leave it you own judgement ! I am only focusing S&P, it does not matter to me.

1 Like
36

Wtf. Talk dog, answer cat.

37

The risk to China comes from loss of global markets. For example, USA is fast decoupling from China, which means 500 billion of annual revenues to China just from the USA are at risk. China does not produce anything that other major countries cannot produce for themselves. The only advantage China was providing was cost. But, if USA and other countries are willing to decouple from China and produce locally or in another country even if it costs 20% more, there is very little China can do. China should make itself a big consumer, so that it is not dependent upon selling to others. And then its corporations will see increased valuation.

38

Definitely USA cannot delink China no matter how much tariff is applied. It will be the supplier of whole world.

Coronavirus does not discriminate people and virus exposure would have exploded more than 1M by now.

Unless China has a reliable medicine, there is no way the reported figures are right.

Government can suppress the information easily, but they can not hide the economic impact to that country.

All investment banks/funds definitely know the potential impact and staying away until it is resolved.

Whoever invests money it is their headache to know the truth. It is their money and their return.Good luck !

39

Just for comparison,

Number of cases per million,
China 58
Taiwan 19

Number of deaths per million,
China 3
Taiwan 0.3

Do you trust the figures from Taiwan?

Thinking aloud: Some people are so arrogant that when you present them anything contrary to their beliefs are lies.

40

I do not count corona virus as a long term factor (longer than 3-6 months). It has caused whatever damage it could cause. No more a threat. However, decoupling between the USA and China is real and will continue at controlled pace. People will not even notice the decoupling is happening. Since July 1, USMCA has already become effective 1, so that means a third country (like Mexico or CAN) cannot become a front to supply Chinese goods. They did not pull down the eastern span of Bay Bridge in one go. They took it apart, one truss at a time. US-China Decoupling will happen the same way.

41

Started already. Has been moving away from exporting to consumer-oriented economy. The tariff war and decoupling have accelerated the transition.

42

This (China becoming a consumer focused economy ) will be bullish for China focused corporations like Baidu who sell in China only. I do not know if they are active anywhere else.

43

Baidu is planning to delist itself from Nasdaq to boost its valuation. There is no need for China stocks to be listed to trade them e.g. tcehy. Tcehy has been making new ATHs because is not listed in US stock exchange.

44

Valuation of a company should ideally be based upon its earning. Not the exchange where it is listed.