All Forum Posts by: Andrew M.

@Richard C. Below, from Mark Lynas' book 6-degrees...so I don't think its "silly" to be trying to contemplate/prepare for these factors, especially if you're doing buy and hold investing that you will be "cashing out" at retirement in 30-50 years from now.

In 2001, the Intergovernmental Panel on Climate Change (IPCC) released a landmark report projecting average global surface temperatures to rise between 1.4 degrees and 5.8 degrees Celsius (roughly 2 to 10 degrees Fahrenheit) by the end of this century. Based on this forecast, author Mark Lynas outlines what to expect from a warming world, degree by degree. At 1 degree Celsius, most coral reefs and many mountain glaciers will be lost. A 3-degree rise would spell the collapse of the Amazon rainforest, disappearance of Greenland's ice sheet, and the creation of deserts across the Midwestern United States and southern Africa. A 6-degree increase would eliminate most life on Earth, including much of humanity.

Its not about turning cold to warm, its relative.  See Lawrence C. Smiths' The World in 2050...speaking of northward migration...that's 35 years from now, not 100.

@Richard C. thanks but I think you're being overly simplistic.  Your speaking of this like it behaves as a step progression...today's weather is what it is, and then 100 years later it gets hotter.  It will be a linear progression and as we're seeing the effects already (drought in CA/TX, outsized storms, snowpack reductions), it should continue to progress upon a continuum getting relatively worse in some areas and relatively better in others.  Thus it all becomes relative...the fact that the Great Lakes are already cheap factors in their relative  lack of attractiveness vs. a place like California which is expensive.  But as one gets worse (CA) and one gets better (Great Lakes) that gap will diminish.  So now the consensus thought is you make your return in CA off appreciation and you make your return in the Great Lakes off cash flow.  So if I buy now in CA and prospects are that appreciation will diminish relative to current expectations based on yet unforeseen factors (global warming effects) than on a relative basis would I be better off investing in the Great Lakes and get the cash flow now and into the future and in the future a yet unforeseen rise in appreciation which investors are not currently factoring in.  This assumes I buy an investment unit now and hold for 30 years to my retirement.

By your logic, the answer to my question is "no" because you feel that since Cleveland will not be a beach spot there will be no relative improvement.  I feel the move will be a linear progression with small, incremental improvement in the Great Lakes relative to its US alternatives and that will, all else held constant, cause value creation that is not yet being factored in. 

Seems that you're thinking "until I see it, I shouldn't factor it in".  Tell that to those who bought real estate in San Jose or Palo Alto (Silicon Valley) 30 years ago.  I used to go there as a child and there was nothing there, now its some of the most expensive real estate in the country.  People who bought there with foresight 30 years ago pass wealth on to their children, people who wait until they see the Google headquarters to buy there pass debt onto their children.

Ok here's my theory and could use some advise from the locals.  I am looking to do some buy and hold real estate investing and want to make a "play on global warming"...my research shows that the southwest through California (where I live) will be dealing with increased drought conditions and other adverse affects from global warming out 15-20 years and beyond.  Conversely, areas like Buffalo, Cleveland, Detroit, Milwaukee, etc. might actually see benefits (relative to other parts of the country) as its weather warms a bit and fresh water sources in the US become more scarce.

So since I am going to be investing anyways (and already have 2 places in California), I'm thinking maybe to diversify, I could invest in a place that will cash flow now and that 20-30 years out may become far more attractive than it is now and a place that my wife and I and/or our kids can have paid for and ready if it becomes the new more attractive place to live down the road...

All that said, does this theory make sense, and more importantly, what city would you recommend as best to invest in (criteria being that its a decent or up and coming place to live in now but could become much more later). 

Ideally I'm looking for a place on/near the shore of one of the Great Lakes...I've seen some nice high-rise condo's in West Cleveland with views out to the lake that looks interesting. 

@Aaron Mazzrillo thanks for the feedback.  I think what I failed to mention is that in its present condition my condo is in as good of condition as the one that just sold for $83k, so to me, that's $10k of "equity"...by definition if you buy any real estate at market value you start with negative equity (due to transactional costs to sell/liquidate the investment), so even if I just broke even if I had to resell, I view that as still having equity given that fact (not sure how others view that).

@Mark Vejnar thanks for the insights...so helpful!  I will check out Acres of Diamonds, never heard of it.

Just closed on buying my first short sale...a condo in Ontario, CA.  It came on the market at $99k...too high, was lowered to $89k where I first saw it.  I offered $76k and then for some reason the bank came back to my realtor and said "we won't accept anything less than $73.2k"...ok...so I changed my offer to $73.2k and the bank accepted.  :-)

A lesser unit in the same complex just went for $83k full price offer. Prices in Ontario are stable and just coming off of big increases, so to get it for $16k below where I first saw it in this market seems like a steal to me (will rent for about $950/mo. after I put about $6k into it and has a HOA of $275)...so I feel like I'm getting (for California) good cash flow and I'm guessing $10k of instant equity. By far the best deal I've found in California lately (condo is in a good neighborhood near 15 fwy /60 fwy interchange).

I know I have the dreaded "sample size of 1" to work with but am I crazy to think that I should focus on going after short sales and look for unique opportunities in CA to give offers under asking?  Yes it took about 3 months to go from start of first offer to end of close but for me, who cares, I can wait and there aren't really other good opportunities out there (I have a full time job and invest passively). 

Curious what other investors' experience has been with short sales?

I'm very appreciative of all the wisdom and insights here...its given me much more to think about and I think I need to factor in that the grass is not always greener on the other side. 

@Account Closed , ha ha no haven't seen Madden but know he lives just down the road.  Danville is a beautiful, safe and high end place and I feel extremely fortunate to live here, but to me there's a lot of pressure to "keep up with the Joneses" and as I'm just simple folk from the Central Valley, maybe that's what I'm struggling with.  :-)

So maybe that's part of it is wanting a simpler life, but as @Martin Scherer so wisely points out, I may be underestimating just how different that reality is from what I'm used to.

@Brant Richardson investing out of state was one of my thoughts as well...how has that gone for you?  It seems to me that the lack of proximity would be a challenge...I'm in Nor Cal trying to currently cosmetically remodel a place in So Cal and that has been a challenge so I've feared doing more out of state stuff.

@Elizabeth Colegrove great point about being trapped in the house.