All Forum Posts by: Sean Kelly-Rand

 Steve that is one option, even better is to put it into treasuries / securities in your name depends on the cash sums. One wake up call is that you have accounts earning 0% or near it and then to wake up and find out they are not that safe when you can earn 4% in safer investments. I am going to put a bit more in private credit. 

 100% @Ramin M. - that's a huge consideration if it's been an owner occupied property. Sell it today save on taxes and then redeploy in a year or two when it's cheaper in and around Boston. Once you start looking you may find a few really good deals. Providence is a good option but I'm still partial to the lower cost areas of Boston as you are right there in the center of all the economic activity. 

 Hey Dan - I think the cracks were already there SVB just made the wider public more aware of what they were. Now everyone is a banking analyst and starts seeing the cracks in the system (low earning assets versus high cost of capital). 

I doubt rates would get meaningfully lower in the near future longer-term (2-3 years) maybe.

In the meantime I'm investing in private credit to be below the waves of the property price volatility. 

 @Steve Tse - I would consider diversifying regardless, even if the bank is fine you never know what lies ahead. For our fund we are very conscious about how we spread our fund among banks and investments (i.e. capital preservation is paramount!). 

And personally I have funds across 3-5 banks at anyone time - also helps for the lending relationships and if they know you can move money out easily you'll get better rate on your deposits.

 Lot's more of this to come as office leases burn-off and tenants consolidate into smaller spaces. 

 Hey Nate - if you are down on the banks you might consider private credit as an investment. We are seeing the volume of new loans and a lot of it is banking clients (banks aren't doing that much lending) and are able to increase our rates and lower our LTVs. DM me if you're interested happy to chat more about it.

100% @Carlos Ptriawan - I am really curious where all the office loans are hiding out. Who holds the ultimate risk on soon to be underwater office loans. Is it the national or regional banks or did much of it get sold off into the pension plans/insurance co's as CMBS/loan participations.

One interesting portion is that many smaller investors focus on residential properties because they are 'bite sized' - office buildings are too large for the average investor to hold - so that is within the REITs/Insurance cos/and Private Equity funds - so it could be a really bad real for the institutions that hold these. 

@Scott Trench - 100% it takes time and better to do in depth than just surface on the same as CNN.  I'm looking forward to the content!

This week it's more the closings than the overall deposits. It's a hastily delivered post however I was handling calls all weekend from fellow investors so figured if I can save just one investor on biggerpockets with a few warnings than it was worthwhile.

For example is a mom and pop investor in Boston goes to buy a triple decker they are likely wiring $500K+ into an escrow account for the closing. Luckily the FDIC/FED stepped in as many escrow accounts are with Boston Private (SVB) and quite a few are with First Republic as well (and its my view that without the backstop that would have fallen today).

One might be surprised what the average real estate investor carries in cash in the Boston market. You can't get a house for less than $1m so amounts are relatively large. I am guessing there are several hundred thousand individuals on BP that have over $250K liquid. 

As an aside: We actually keep our cash on hand relatively low, if we carry cash equivalents its in an account holding treasuries etc... to fund transactions we pull from multiple lines of credit secured by the loans we own (that way we don't have to sit on $1m of cash to fund a $1m mortgage). 

I am glad to see the FED/FDIC stepped in as it protected a number of people. We aren't out of the woods yet but a step in the right direction.

Love the discussion here.

@Jillian Campayno - I don't know who has a better grasp on MA tenant landlord law than Jordana!

If you own rentals in Boston you should listen in she's a wealth of knowledge and with the new rent control rules being proposed now it's more important than ever. Colin you should have someone from our team attend.

@Ramin M. - I'm an investor and lender in Boston and can introduce you to few resources/networking events when you get here on the ground. We host events for developers every so often so worthwhile to follow us on IG and LinkedIn for announcements. 

I own multi's and am starting to see a few good deals prices and interest rates are high but so are rents (and by the time you are ready to buy prices should be even more interesting). I'm actually looking at a few portfolios in Providence as well, and Worcester has also seen tremendous growth. Personally I'm a big believer in the Roxbury market in Boston - its reasonably priced and the rents are good. Regardless feel free to reach out and I'm happy to introduce you to the right people. 

@Alli Breighner - I was just told I should spend my winters in San Diego I hear its gorgeous!