All Forum Posts by: Shane Pearlman

@David Krulac / @Jon Loca  - I would bet that if we poll everyone, we end up defining the suburbs by their focus on on a particular asset class, specifically low to mid density residential, to the exclusion of industrial and larger commercial. I don't typically see places with a healthy mix of residential, commercial and small scale industrial called suburbs, no matter what their size or their distance from any formal downtown or large urban center.

Wikipedia (http://en.wikipedia.org/wiki/Suburb): A suburb is a residential area or a mixed use area, either existing as part of a city or urban area or as a separate residential community within commuting distance of a city. In most English-speaking regions, suburban areas are defined in contrast to central or inner city areas, but in Australian English, "suburb" has become largely synonymous with what is called a "neighborhood" in other countries. In some areas, such as Australia, China, New Zealand, the United Kingdom, and a few U.S. states, new suburbs are routinely annexed by adjacent cities. In others, such as France, Arabia, most of the United States, and Canada), many suburbs remain separate municipalities or are governed as part of a larger local government area such as a county. 

How would you define suburbs?

Hey Omi,

Shoot me a copy of your spreadsheet. Curious to see how you put it together.

Other things to consider: 

Does it get cold there and will that affect your cashflow in any way

Landscaping

Turnover costs has two parts - any fixup + fees from your manager. Are both factored in?

As an idea, since you are buying remote, I would cold call 3-4 local managers and tell them you are considering buying in that area. Ask them what the demand looks like, what rents they are seeing and 

Besides that, I have two fourplexes which are both 3brs and really believe in the formula, especially in strong neighborhoods.  

There have been so many good comments.

Perhaps the trend is not so much explicit urbanization of large metros as the re-integration of real estate classes to creating localized communities? The goal being able to live, shop, work and play within a reasonable radius. @Matt Mason & @Jen Kurtz are totally right when they create a division between these enormous remote tracks of semi-dense housing isolated from community and other key infrastructure and "street-car suburbs". All being said though, from an appreciation and asset stability perspective, where do you expect to see the most return?

When you talk about remote work freeing the individual from geography, that is somewhat true but not playing out in practice. I'm with @Matt Mason  I've been a 100% remote worker for over 14 years. I live by the beach and chose my location based upon lifestyle, community, (yup) schools, access to nature and other factors. It is an 1.5 hour drive from most large tech jobs. It was clear to me after 6.5 years of working alone that I CRAVE a social feedback loop. I just attended a talk by Nir Eyal (author of hooked) on Wednesday night where he listed "The FEAR of Missing Out" as one of the 6 primary human motivators. In fact, it seems that FOMO just was added to the oxford dictionary this year (http://www.oxforddictionaries.com/us/definition/am...). In 2008, I invested into one of the first co-working spaces. It created a social solution to a distributed workforce. Ironically, I build myself a office. As a real estate and business adventure, it was pretty cool and Nextspace just got listed as the #1coworking space in the US (http://www.symmetry50.com/blog/2014/9/11/the-top-7...). But in my eyes, it reinforces the social circumstances that are driving this urban reintigration.

@Roger Doe When I look at demographic changes, the one which seems to stare me in the face is age.

Thanks for bringing it back into focus @Richard C. . You are 100% correct. I always place micro first in my day-to-day investing. I just read a newsletter by the Real Estate Guys where they referenced the macro as a glacier. If you know it is there, it is fairly easy to plan for and avoid, as they commonly move slowly. That said, they are also massive and obliterate everything in their path changing the entire landscape. 

@Brie Schmidt do you think this is more or less dramatic in geographies like the mid-west with more available land and lower density (than say LA)? Perhaps it is a naive view of large midwest metros, but when I visited the Twin cities last year on business, even city centers were more spaced.

I'm with you @Scott Pigman. I personally find the idea of being packed in tightly claustrophobic and measure the quality of my life by the waves and running trails I have access to. The trend of a distributed workforce would in theory disrupt the need for physical proximity to work (I've worked from home for 14 years) . That said, we aren't there yet. I was looking at a survey of the local tech employee base in santa cruz where I live which included nearly 20k people who commute 1 - 2 hours a day to work in the valley for google, facebook and so many other juggernauts. 74% said they would gladly take a pay cut to work close to home and not commute the mountain. They value the amenities, culture and lifestyle afforded by living here enough to do make the commute. they certainly don't live here to save money as it is more expensive.

@Matt R. - there is an interesting feedback loop that comes from successful urbanization. Affluence drives taxes. Taxes fund great infrastructure (broadband, transportation...). Solid infrastructure creates a fertile bed for new innovation, community. The debate is how to predict the trend line right? We have this absurdly odd phenomena in Santa Cruz, where I live. We happened to place our drug users and abusers on the beach, by what should be the best real estate in the darn county. You would think with property prices breaking a 700k - a million+ for a 3br house in that neighborhood, gentrification would have worked its way through it long ago. And it is happening, but much slower than I had imagined. I have no interest in being a getto-landlord, so I have avoid buying there. But the minute I can see the inflection point, I'd buy every single house I can. Question is how to identify it and not be too early an adopter and suffer, or too late and miss the opportunity.

LA county is a bit of an odd bird for a county as it kind of seems that its cultural centers and economic centers aren't physically aligned in the same way as they are in higher density locations like San Francisco. I guess it begets a question, what in the case of LA is a suburb Vs an economic center?

With an eye to the future, should we really be buying in remote suburbs, or is that like investing in VHS rental shop in a digital age? I’m seeing what looks like a massive urbanization trend.

I am a buy and holder. Other people put their end of year profits and personal savings into 401k plans. My wife and I buy properties for the future. Putting aside the (highly important) factor of micro-environments for the purpose of this thread, we have been talking a lot about trends. Julie & I learned in 2008 the impact of macro trends. Before that we only thought locally, but seeing the how monetary policy shaped real estate and affected our personal bottom line the way it did, I'm raising my vision to keep an eye on larger forces. If and when the interest rates finally rise and inflation hits to correct market tampering, we'll find ourselves in a very different economic and real estate environment. I’m locking in as many long term low interest loans as I can. 

In the same way that I see a tidal wave of inflation, Julie and I have been watching a steady flow of wealthy people migrating to city cores. In the past 50+ years our poor lived in inner city ghettos and the wealthy escaped to their suburban McMansions. But we are personally experiencing an inversion. We invest in Seattle and I've watched neighborhoods go from hooker to hipster. In the bay area, where we live now, San Francisco rents and prices exploded, which overflowed into an Oakland renaissance. Where do the poor go? Further out to where they now can afford to live. It makes me wonder if the suburbs might just end up our new ghettos. I don't see large companies moving their HQs to suburbs as they did in the past, but rather closing their branches to centralize in major metros. Where the jobs go, people follow.

For the long term investor, where should we park our chips?

@J. Martin I might go surf at 3pm, depending on the swell.  I'm on dinner + bedtime duty for the kids 5pm until event kickoff. Happy to make a Saturday morning brunch.

@J. Martin you are welcome to stay in my office / guest room (it is a futon but a nice one). I'm a solid walk from the venue and just above the beach (we can brunch at the beach in the morning or take the kids surfing if the weather is good).

And for the Roll Call:

@Eileen Burke Woodward , @Brad Gustafson , @Uuri Koh , @Eric Mun

@Marilynn Woodcock, @Marcie Montis , @Erle Mcdonald , @Kenny Boyd

@Dylan M, @Shane Pearlman , @Steffen Vulpius , @BeBe Cheng

@Joey Budka @Denise D , @Daniel Shepstone , @DanrKelly, @Helen Chau

@Jacob Yufa @mariaej @Kenny Boyd @Judy J. - think you can come down that date? Pick up our conversation?

Hi All,

Join us for the first meetup for the year! We'll talk about some of the local and out of area deals that people have been doing. I have some new adventures of my own to share. @Helen Chau & @Troy Fisher  and I try to make this meetup come together quarterly. The last event had 16 people and we wandered through topics from creative financing options, scaling your portfolio, out of state deals, using wholesalers to our personal halloween investing "horror stories".

When: Friday, January 16, 2015, 7:00pm

Where: Beer 30 (its new, fun and has an amazing selection)

2504 S Main St, Soquel, CA 95073

Please support the small business by spending some money and tipping for the great service we receive! 

Can't wait to see you all,

Shane

People typically come from: Santa Cruz, Felton, Boulder Creek, Scotts Valley, Live Oak, Capitola, Soquel, Aptos, Watsonville, Freedom, Pajaro, Seaside, Castroville,  Salinas, Gilroy, Marina, Aromas, Monterey, Carmel, Los Gatos, Campbell, Saratoga, San Jose. 

Remember, Friday evening traffic can get a touch thick so give yourself some time. I'll hang there till it ends (about 10-11pm depending on how conversation flows).