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Landlord In Chief - America's Highest Rank Landlord

Sanjeev Advani
Investor · Bakersfield, CA · Member since 2015 · 483 posts · 234 votes

Donald Trump was just elected president in one of the most dividing elections in recent history. The country has shown its divide, and now will have to grow together, and Trump seems to think that we should start our growth process with our infrastructure.

Whether you believe in his agenda or not, researchers have shown that his new plan will need to take on a massive amount of debt, which will be used to create jobs and rebuild our infrastructure. In doing so, the bond yields will have to rise, and the dividends that REIT's have been offering, all of a sudden aren't looking so great.

Karin Ford, a senior analyst for MUFG Securities, seems to think that REIT managers have a positive outlook because of Trumps development and real estate background. They think, commercial real estate should rise based on higher business confidence, lower tax rates, and Trumps stimulus program. Also, Mitch Wasterlain, Founder of a real estate investment focused company says that historically real estate has done well in high interest rate environments.

With REIT managers and Securities companies having positive sentiment, it sounds like there could be an upside to the real estate market, and with higher job growth due to the stimulus, there will be increased demand for rentals and/or property, and lack of supply will cause rental and/or property rates to go up as well.

According to this news there seems to be a strong positive look toward the real estate market, and especially commercial real estate. On a small scale, when starting a business there must be a capital infusion in order to grow and thrive, and it sounds like that is what Trump is trying this time, but will the execution come across as good as it sounds, or will we be facing an even bigger debt, among much larger problems?

What are your thoughts?

Written By:

- Sanjeev (Sunny) Advani

Source: http://money.cnn.com/2016/11/23/investing/real-estate-reits-donald-trump/ 

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Casey Murray
Investor · San Diego, CA · Member since 2015 · 290 posts · 80 votes
9y

@Sanjeev Advani I agree with @Samantha Klein in that I wouldn't trust CNN; I also don't Fox. Media today is so convoluted that it's tough to decipher BS news from credible news. But, we still need to do our homework and determine where the economy is going so I applaud you for starting this conversation. 

I haven't focused much on the commercial effects but more on residential effects resulting from the Trump presidency. He's said to be committed to increasing defensive spending which would bring an influx of people and jobs in my market (San Diego) as we have a strong naval presence. Interest rates have increased .5% since the election but still historically low. 

In the end, talk is talk. We'll have to wait and see what actually takes place. Fingers and toes crossed!

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  • Samantha Klein
    Investor · Monroe, WI · Member since 2015 · 691 posts · 610 votes
    9y

    @Sanjeev Advani I would not get your news from CNN. Nobody really knows what is going to happen, we will have to just wait and see.

    0Reply
  • Sanjeev Advani
    OP
    Investor · Bakersfield, CA · Member since 2015 · 483 posts · 234 votes
    9y

    @Samantha Klein CNN isn't the only place I get my news, but they do bring up good points from time to time, and I would agree that no one really knows whats going to happen, but if we don't start putting it out there and getting opinions then we will be behind the ball, in my opinion. 

    0Reply
  • Casey Murray
    Investor · San Diego, CA · Member since 2015 · 290 posts · 80 votes
    9y

    @Sanjeev Advani I agree with @Samantha Klein in that I wouldn't trust CNN; I also don't Fox. Media today is so convoluted that it's tough to decipher BS news from credible news. But, we still need to do our homework and determine where the economy is going so I applaud you for starting this conversation. 

    I haven't focused much on the commercial effects but more on residential effects resulting from the Trump presidency. He's said to be committed to increasing defensive spending which would bring an influx of people and jobs in my market (San Diego) as we have a strong naval presence. Interest rates have increased .5% since the election but still historically low. 

    In the end, talk is talk. We'll have to wait and see what actually takes place. Fingers and toes crossed!

    2Reply
  • Travelle MasonPro Member
    Rockville, MD · Member since 2018 · 93 posts · 28 votes
    7y

    Two years later...is the jury still out? How are we looking in the real estate business?

    @Samantha Klein, could it be that CNN was right?!?! ***gasp***

    @Casey Murray, how's the San Diego market looking?

    0Reply
  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    7y
    Originally posted by @Travelle Mason:

    Two years later...is the jury still out? How are we looking in the real estate business?

    @Samantha Klein, could it be that CNN was right?!?! ***gasp***

    @Casey Murray, how's the San Diego market looking?

     CNN wasn't right.  And CNN went from being a trusted respectable news organization to one that is more politically biased to the left than Fox is to the right.  Heck, CNN might be to the left of MSNBC which is pretty open about their left bias

    It's sad to see because I always viewed CNN as the 'adult in the room'.  Now they're a bunch of crazies that can do nothing but bash Trump all day (and I'm no Trump fan -- didn't vote for him.  But I want to watch news that's more than NPCs saying "Orange Man Bad")

    1Reply
  • Travelle MasonPro Member
    Rockville, MD · Member since 2018 · 93 posts · 28 votes
    7y

    @Cody L.,  much like  one of the previous commentators, you presented nothing to support your position on CNN regarding real estate predictions or the questions posed. 

    This original post was not about getting to into the mud, just the real estate predictions. Let's not get distracted and triggered by the mere mention of C.N.N. I'll try and break it down in a digestible manner. 

    Two year later, where are we now?

     "researchers have shown that his new plan will need to take on a massive amount of debt, which will be used to create jobs and rebuild our infrastructure."  

    True or False 

    "commercial real estate should rise based on higher business confidence, lower tax rates, and Trumps stimulus program." 

    Have we seen this realization?

    "historically real estate has done well in high interest rate environments." 

    How are our projections doing?

    Any relevant contributions?

    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    7y

    I will try to take a swing at this keeping politics to a minimum.

    >"researchers have shown that his new plan will need to take on a massive amount of debt, which will be used to create jobs and rebuild our infrastructure."

    true.  building/repairing infrastructure costs money.  Infrastructure has received less than adequate maintenance for many years.  Unless the economy is going bonkers, increased infrastructure expenditures will result in increasing the national debt.  About the created jobs, the unemployment rate is currently very low.  If increased infrastructure spending creates new jobs, can the positions be filled with qualified employees?

    >"commercial real estate should rise based on higher business confidence, lower tax rates, and Trumps stimulus program."

    Partial true.  I believe RE will rise where RE is in short supply which mostly are the coasts and large cities.  I think this was bound to happen regardless.  I do not think the small town in the middle of no where is going to see much RE appreciation.

    >"historically real estate has done well in high interest rate environments."

    Historically RE has done well in high interest rates, but I more attribute the high RE return being the reason for the high interest rates rather than a cause and effect the other direction.  Interest rates rise when the economy is growing and there is inflationary pressure.  RE is part of that larger environment.   So my belief is the cause and effect is more likely in the reverse direction: RE is rising so interest rates rise.  The correlation is present, but the cause and effect I believe sometimes is not correct.  Fundamentally, the higher interest rates should slow down RE appreciation as the cost to purchase rises.  However, the RE is still having fine appreciation as the intent of the rising interest rates is to slow the growth, not eliminate it.

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