3 Tweet Sunday - June 16, 2024
🏠 3 Tweet Sunday 🏠
I read a great article recently. Everything you read online is written by crazy people. Do you comment on Reddit posts? Twitter? You may be crazy. I’m sorry. There is something called the 1% rule that is found pretty consistently across internet communities. The rule states that only 1% of the users of a website create the content. The other 99% lurk. Wikipedia's most active 1,000 people — 0.003% of its users — contribute about two-thirds of the site's edits. One of Wikipedia’s power users, Justin Knapp, is nearing two million edits over 13 years. Assuming he doesn’t sleep or eat, that is one edit every four minutes for 13 straight years. He may be insane. Yet, there is a good chance one of you reading has been influenced by his work.
Same goes for Amazon book reviews. This dude Grady Harp has written an average of 8 reviews per day for 7 years. So this guy reads 3,000 books per year? Even if I gave up my life to write book reviews, I don’t think I could be that prolific. There are only so many hours in the day. So I guess the moral of the story is, remember this when you read something online. Pretty high likelihood it was written by a crazy person.
I recently discovered my property is zoned for 8 units. I thought I was going to be rich. It looks like I won’t be. Extreme Home Makeover can build a house in 3-5 days. But building a small duplex in my backyard will take a year? And I have to drop $5k on an architect to make plans before the GC can give me costs? Very crazy. My single family home is worth ~$400 per sf, and I’m told houses can be built here for $250 per sf. So maybe there is something there.
Let’s get to it:
#1 🏠
I think people in the US take the 30 yr mortgage and private property laws for granted. Mortgages were introduced in Argentina just last month. No one is sure how that will play out with the hyperinflation/economic issues. Tough to get out of poverty if you can’t own an asset. Private property rights are crucial to economic prosperity. There have been many studies done showing the correlation between extreme poverty and a country’s lack of private property rights.
#2 🏠
Same thing goes for residential. Realtors have told me several times there are “multiple offers” on a property I’m putting an offer on. Were there really multiple offers? Or was this just a sales tactic? Who knows.
#3 🏠
I like to see that. Phoenix multifamily deals still look crazy overpriced to me. This tweet is a little doom and gloom. It makes it seem like multifamily is going to collapse. $56 billion worth of multifamily buildings is in trouble, and $1.7 trillion in debt will mature by 2024 to 2026. Is that really a big issue? Sometimes I feel these things are overstated. At Rocket Mortgage, I thought everyone was going to lose their home during covid. We let struggling clients go into forbearance. Forbearance lets you pause mortgage payments. When you stop paying, interest continues to accrue month after month, gets added to your overall balance, and then accrues interest itself. It’s a band aid solution. I thought for sure a large percentage of borrowers were going to foreclose after the forbearance period ended. Then the housing market would collapse. That never happened.