Automated Cars and the Real Estate Market

This post will be mainly dealing with this article recently published by Angus Hervey at Medium.

We live in interesting times.  When I was a child, I was one of the last of my peers to learn to type on typewriters.  The old machines were replaced the next year with shiny new Apple IIes.  Now I have the computing power of 10,000 Apple IIes in my pocket.

My first car was a beat up old Mustang.  The convertible top didn’t work so I just left it down and it chugged gas and oil like it was going out of style.  Little did I know that eventually my old Mustang would go out of style, along with every other gas powered car I owned over the years.  I currently drive a Mini Cooper.  Its probably the last gas-powered car I or my family will ever own.  In a few years when my lease is up I will most likely migrate to the Tesla Model 3.  From there I may never own a car again.  I may just choose to have an automated car pick me up and take me where I wish to go.

That’s not some hair-brained sci-fi scheme, its happening now.  Without a doubt Tesla and its automated cars will revolutionize the automotive industry.  Every major legacy car maker is struggling to catch up as we speak.  While its Tesla’s job to plan and innovate the future of automobiles, its mine to predict how the culture around and automated car will effect the real estate market for years to come.

This future holds both the good and the bad.  Lets start with the bad first.  Automated cars are going to cost a lot of people their jobs, in fact, automation in general is going to be a huge issue sooner than most people think.  I own many investment properties in the state of Indiana.  The property is cheap to buy and maintain and the rents run around $400 a month for a 2 bedroom home.  I would say that a quarter of my renters are in the trucking or transport business.  While automated passenger cars will revolutionize cities, automated freight haulers will mean the death of much of middle America.  Trucking, by a large margin, comprises the most common job in the Midwest, followed shortly by many minimum wage jobs in the service industry.  While a fully automated passenger car is 5 years off, I would say it will be 7-10 years before most cross country trucking will be automated as well.

Courtesy of Boingboing.com

No state will escape this automation.  I fully expect half of my tenants to retrain for a new job 10 years from now.  Truck driving is a way of life for vast swaths of the States.  That will be gone ten to twenty years from now.  How this country deals with this is beyond my abilities to predict, but its safe to say higher unemployment in most states is guaranteed.  You can also add many newer jobs in the sharing economy to this list.  Lyft and Uber were merely transitional technologies.  Why hire an Uber driver to take you across town for $5 when an automated electric car does it for $0.50?

Auto mechanics will be rarer and rarer as well.  A fully electrical drive train requires little maintenance compared to combustion engines.  Jiffy Lubes and the like will slowly fade.  Even larger dealerships as a whole might disappear.  When a car needs maintenance it will simply drive to the facility that made it to be repaired.  You can add a litany of other car-centered businesses too.  In fact, it could very well be that you will never purely own an automated car to begin with, rather, rent it out by the mile.  That eliminates dealerships and a whole lot of secondary industries like aftermarket part makers.

This also will most likely lead to a fall in tax revenue and a need to completely overhaul infrastructure in this country.  Currently our roads are maintained in large part thanks to a tax on diesel and gasoline.  This will have to change as people will simply stop buying gas.  Auto insurance will drastically change as well.  How susceptible are automated cars to driving drunk or recklessly?  Spoiler, not often.  As more and more cars get automated, the risk pool for self drivers increases and so do premiums.  Eventually it may be exorbitantly expensive to drive yourself around. That’s billions of dollars in disruptions right there.

How does this effect real estate though?  Traditionally in this country we’ve seen a population migration to the cities due to the increase in job offerings.

Automation will hit most populations pretty equally.  While there will definitely be a period of stagnation and adjustment to our new robot overlords, its our job as real estate investors to figure out where people are going to go and how they are going to live.

For starters, any state that bases their economy around oil and gas are going to have a tough time.  If Mr. Hervey of Medium is correct, the price of oil and gas are going to drop significantly, and a whole lot quicker than people realize.

This is bad for states like Texas, Colorado and Louisiana as you can see from the map.  Large portions of these states are dedicated to oil and its infrastructure needs.  Now what happens when 1 in 10 people in the US stop using gas? Then 1 in 5? Then 1 in 3?  By the beginning of next year Tesla will be making 10,000 Model 3’s a week.  Nissan has two electric vehicles in the pipeline.  Audi, BMW and other luxury brands will have production vehicles soon after followed by Ford, GM and Chrysler-Fiat.  I fully expect real estate to correct harder in these states than in any other.  Such will be the life of any state with an oil-based economy.  While Texas is leading the way in wind power, dont expect the red state to fully embrace renewables any time soon.  The same goes for Oklahoma and Louisiana, though Colorado has some hope as they are slightly more liberal in their legislatures than their neighbors.  Still, it will be a bumpy road.

Now imagine living in a city without traffic.  Imagine a city without large portions of real estate dedications to parking.  Imagine every car in Los Angeles begins its day not in a garage but in some huge parking garage on the fringes of the city.  Every day a car would start its journey from, say Barstow, into the city to pick you up and take you to work.  After it’s done dropping you off, it either cruises around the city looking for passengers or returns to its leasing facility to prevent traffic.  It doesn’t sit in a parking garage or structure in Downtown wasting valuable real estate.  Suddenly a mall parking lot isn’t needed. Cities can become denser without the need to park in them.  Eventually, if they are smart, cities like LA will do away with parking requirements for all new construction.  That will bring the cost of building new high density real estate down significantly throughout the nation.

This also means that living in areas far outside the city are more and more reasonable.  Think about the areas that open up if you don’t have to sit in traffic all morning or night?  With every car automated, accidents become a thing of the past.  Traffic jams managed by large supercomputers back at Apple or Tesla.  Say your job is in Downtown Chicago, and you are limited to a 1 hour commute for your sanity.  Suddenly that bubble of where you live significantly expands as you zip through traffic with the rest of your automated commuters.  A myriad of smaller satellite towns suddenly become very livable and not so out-in-the-sticks.  A country home and a city job are suddenly well within reach.  Look at any small town that is just outside of a reasonable commute right now in America.  In five years, more and more people are going to want to live there.  Plan accordingly as a real estate investor.

This all has a huge impact on house houses are built and modified as well.  The American Dream of a 3bed/2bath house, double garage and picket fence suddenly no longer needs a garage.  While I fully expect older millennials with extra money to have their own personal car, that will become rarer and rarer.  So why not convert that garage into a mother-in-law suite or another unit and make a little money?  Or build the same house on a drastically smaller lot with the space you’ve saved.  Either way, cities become denser as do the suburbs.

And the very idea of moving somewhere with a better school district will most likely be a thing of the past if school buses are ever automated as well.  In fact, the whole idea of schools maintaining a fleet of buses will be a thing of the past.  Maybe the district in Muncie, Indiana isn’t that great and you want to send you kids to a posh charter school in Carmel?  Click the ride share app and send them on their way.  A car will drop them off when they are done.  The ubiquitous yellow school bus will be extinct.

Expect more Condo’s and apartments in the cities, and smaller houses in the suburbs and more of them.  Expect Tesla or some other company to roll in and do something with all of these abandoned inner-city gas stations.  The clean-up of the post-oil economy will be enormous.  Rather than have large lines out the door of fast food restaurants, the food may very well just be delivered to your door.  The future has some clouds on the horizon, but its bright beyond them.

The Silliness that is the Medical Marijuana Industry

Let me just start off by saying I am a big proponent of marijuana despite not using it myself.  I agree that it has medicinal properties and has helped many people deal with a myriad of different problems in their lives.  That being said, I dont believe it is medicine in its current form.  THC and CBD are potent medicines, marijuana the plant is not.

Its just a plant.  It should be bought and sold like alcohol or tobacco.  That being said, its not.  The industry that has sprung up around “medical marijuana” is immature and sophomoric at best.  As a business owner myself, let me elaborate…

A few months ago my father was diagnosed with terminal throat cancer.  As he had been through chemo and radiation before, this was the last diagnosis he would receive.  Its the dreaded “Just make him comfortable” conversation no one wants to hear.  Through some internet research and conversations with some doctors, the letters CBD kept popping up.  CBD stands for Cannabidiol, which is the non-psychotropic ingredient in marijuana that makes all the liberals think its medicine.  And it does show some promise as far as treating cancer, but a drug based off of it is a long way off.  So what does that leave the everyday consumer desperate for a cancer cure?  The Medical Marijuana Industry.

Medical marijuana was legalized in CA through Prop 215 all the way back in 1996.  At this time, its a 20 year old industry.  Illegal marijuana use extends back into history, but the actual industry got its start here in our state.  This year, the voters of our state finally figured out that they just wanted to get high and passed a complete legalization and taxation proposition. Hurray left coast.

medical-marijuana-pain-relief

Until the state legislature figures out how to deal with actual legal weed in CA, we have to suffice with the medical marijuana industry.  And people like myself, who do not use the drug but need to buy it anyways, have to deal with it.  So below is the account of an outsider to the world of weed.

First off, finding a medical marijuana “dispensary” is fun in itself.  Using sites like www.weedmaps.com is easy enough, but actually finding the brick and mortar storefronts are another thing entirely.  Always located in some backstreet strip mall or office complex, they can be difficult to find.  Furthermore, most lack any sort of signage indicating what type of business they conduct on the inside.  There are three within reasonable driving distance of my house: Pasadena Alternative Care, NHC: Natural Health, and something ominously called Green Goblin.

I drove past Pasadena Alternative Care first.  Actually I drove past it several times as there isnt any sort of signage outside.  I dont know if thats due to local ordinances, Prop 215 rules or incompetence. There is just a small white storefront with a picture of a Buddha on the front door.

large_greencross_buddha

Green Goblin is easy enough to find.  Its hard to miss the glaring picture of the Green Goblin outside.  Unfortunately for them, I know that the comic book character they represent poisons people for fun.  I passed on that shop almost immediately.  I dont care if its named after a strain.  Get your shit together and at least name your shop after a leafy green hero.

green_goblin2

Don’t buy anything from this man.

I couldn’t actually find NHC.  I actually walked past its store front several times thinking it was an abandoned building.  One of its windows was broken, and there was zero signage accept for an address across the front of the door.  I found the door open and entered what seemed to be a normal doctors office waiting room.

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Except it wasn’t.  The lady at the front desk was nice enough, she asked to see my ID and paperwork and told me to have a seat.  A few things stuck out.  One, the receptionist was behind several inches of bullet proof glass.  Entrance to the actual shop was done via a two door security room.  The coffee table had such normal doctors office magazines like Good Housekeeping and Marie Claire, but intermixed with them was advertisements for marijuana products.  Said advertisements were a stark contrast from the magazines.  Where Good Housekeeping had some semi-famous actress in conservative dress, the weed adverts exclusively included busty tattooed women bending over cars or straddling jars of bud.

papa-baer

So this medicine does what again?

Finally you get buzzed in past the security door.  Almost immediately you are hit by the smell.  An entire wall is devoted to various different strains of weed of different strengths.  Let me just say my biggest hiccup for this industry is the way it names its strains.  Its had twenty years to come up with some semi-medical names for its plants (because they claim its medicine).  What have they come up with in 20 years of marketing?

  • Soul Assassin.  Again, not putting something associated with death in my body.
  • Hazmat.  Are you fucking kidding me?
  • Ben Dover.  I hope its named after a legitimate person and not by some high 15 year old.
  • ZZBZ. After research this is a Serbian acronym.  No offense to Serbia, but not putting it in my body.
  • Space Candy.  You know this is a drug right?  Imagine if the makers of Vicoden renamed their drug Space Candy?  Cue shit storm.
  • XJ-13.  Props to the botanist, but you make this sound experimental.  Not putting it in my body.
  • Rogue One.  You named a strain after a movie?  Should rename all chemo drugs “Die Hard” while we are at it.
  • Space Nugs, Moon Rocks, Phantom OG, $100 OG, Flame OG, Viper OG, Super Glue and so on and so forth.

My point being, after 20 years of being in business you’d think growers would stop naming their strains after things that 15 year olds think are funny.  Figure out a nice conservative name for your medicinal product and peer-test it for gods sake.  Yeah, so its going to have some gibberish name like Viagra or Tylenol, but I don’t have second thoughts about the drugs when I read those names.

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If you can get past the absurdity of the marijuana on display, the edibles are marginally better, albeit not by much.  Sometime years ago, some chemists figured out they could combine THC and literally any sweet or salty food and a sub-industry was born.  You’ve got sour gummy bears, Cheese-its, cooking oils and chocolate chip cookies all loaded to the brim with THC and CBD.  Yet, as is before with the weed, all the wrapping and advertisements were designed by and marketed towards teenage boys.

cannabis

And what looks suspiciously like Smirnoff Ice at the bottom right.

For starters, nearly everything suffers from the psychedelic color curse.  I don’t know how weed got associated with bright geometric designs and tie-dyed everything, but just stop.  If you are smoking a strain that makes these colors trip you out, then there is something other than marijuana in your bong.  I’m 33 years old and I don’t want to buy medicine in what looks like my college dorm room.  The closest thing to a professional product I saw were Kiva Bars, which could be mistaken for high end chocolates.

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The staff were nothing but courteous, friendly and knowledgeable from the front desk to the people behind the counter.  However, is it too much to ask that you dress like you work in the medical industry?  That’s probably the most petty problem I have, but its worth noting.  I’m fine with business casual for a pharmacy, but lets not dress like we are going to a Dead concert.  A legitimate business should have legitimate looking workers.  Polos people.  Its not that hard

Marijuana

This is Gilmore Girls.  Lose the hat Luke.

Basically it comes down to one of two things: Does marijuana want to go the medical route and become legitimate or does it want to cater to people that smoke it for recreation?  Thankfully my state has opted for the latter so we can all stop this charade.  But the industry is still going to continue to be immature, and that needs to stop if they want to be legitimate in the eyes of the public.  That means professional advertising, clean professional storefronts and actual dosing sizes for medical purposes.  But that seems too much to ask for at this point.

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Looks legit.

**I wanted to point out, too, the ridiculousness that is getting a recommendation for medical marijuana in California.  When I originally obtained my marijuana card in 2009, I went to an actual doctor and was examined, albeit not extensively.  But there was a small amount of effort on my part.  When I renewed the card this year, I found there were teleconference services where you didn’t even need to leave your house.  PrestoDoctor.com and the like are super convenient for the consumer, and I had a teleconference with an actual doctor.  In and out in 15 minutes or so, all without putting on pants.

However, its the absolute antithesis of what you want to legitimize the industry.  Can you imagine if you wanted any medicine and all you had to do was have a Skype meeting with a doctor to talk about your symptoms?  I better have a damn good reason to want Vicodin from my GP AND show up AND be examined.  With weed, not so much.

 

 

 

 

 

 

 

 

 

 

 

 

 

The Trump Economy for Property Investors

For transparency purposes, I’d like to point out that I am not an economist. My college degree isn’t in economics and in general I find it a boring subject most days.  What I am, however, is a real estate investor and serial entrepreneur.  I have run companies large and small, have been the small cog in larger companies and generally know how small business lives and operates in the United States economy.

Most people focus on the social aspects of a Trump Presidency.  Will he eliminate abortion? Gay marriage?  Will Muslims and latinos be rounded up and deported?  That’s not what I’m focusing on with the post.  I want to focus rather on the economic impacts to small businesses and large.  I believe that if there is true lasting damage that can be caused by Trump, its to the economy as a whole.

I’ll admit, I voted for Clinton out of purely selfish reasons.  I wanted someone who could keep the lights on, the water running, and the cogs spinning.  While Trump is a businessman, I found his track record dubious at best.  There is a long list of failed businesses and broken contracts that left a bad taste in my mouth, aside from the whole pussy-grabbing incident.  I also personally believe you cannot operate a government like a business and vice versa.  They are two different skill sets.  Where government is exact, business is efficient.  For instance, if someone wants to buy one of my investment properties and makes it known they dont have enough money, I don’t have to give them the time of day.  Whereas in government, and citizen with a legitimate grievance must be heard no matter their race, sex or bank account balance.  At one time in real estate, you could simply not sell to black people if you so desired.  You were given that sort of freedom in business.  I believed, and still believe, Clinton had the proper tool set needed to run the country.  I don’t even know what Trump’s toolset is, or if its even close to my own.

While the Trump candidacy was pretty vague as to what it would actually do, earlier in October they released a plan for its first 100 days in office.  I’ll discuss them in depth from the perspective of a small business owner:

“FIRST, propose a Constitutional Amendment to impose term limits on all members of Congress”

This really has nothing to do with my company.  Best of luck to him.  If you can get 2/3rds of congress to vote against their best interests, then hes going to go down as one of the better presidents.  Then 3/4ths of the states have to ratify it in their legislatures.  I’m going to go out on a limb and say this will be forgotten by Summer of 2017.

“SECOND, a hiring freeze on all federal employees to reduce federal workforce through attrition (exempting military, public safety, and public health)”

As a property investor, anyone with a  job that pays rent is great.  Less government jobs means less qualified renters, albeit by a tiny amount.  I don’t operate in an area where a military member would rent my house, so most of this doesn’t apply.  Trump can do this through executive action I believe, not that he needs to.  I’m sure a GOP congress would be happy to oblige.  Neutral to slightly negative for property investors.

“THIRD, a requirement that for every new federal regulation, two existing regulations must be eliminated;”

This is really vague, and completely arbitrary.  I came into real estate at a time where there was little to no regulation and it came to bite us in the ass pretty hard.  As much as I would love to not deal with HUD regulations, they are there for a reason.  Say he does away with many HUD regulations or HUD entirely (its not out of the question).  I would have some serious questions as to how my Section 8 tenants are going to pay rent.  I would also worry about the loan market if it were left up to the free market.  Does sub-prime come back? Or is lending going to be restricted to those who can afford it only?  While this may free up a ton of money, the pool of buyers becomes smaller.  Its a net negative effect I believe.

“FOURTH, a 5 year-ban on White House and Congressional officials becoming lobbyists after they leave government service;”

I’m not a political science wonk, but my fiancee pointed out to me that this runs against the First Amendment.  Best of luck to Trump with this one.  Net neutral effect on property.

“FIFTH, a lifetime ban on White House officials lobbying on behalf of a foreign government;”

See above.

“SIXTH, a complete ban on foreign lobbyists raising money for American elections.”

Terrible irony aside, I don’t really see this impacting real estate.

“SEVENTH, I will announce my intention to renegotiate NAFTA or withdraw from the deal under Article 2205”

Its pretty much agreed that this would start some sort of trade war with Mexico.  Seeing as Trump plans on building a gigantic wall down there, I think that’s the idea. There’s a few problems with this though:

export-countries-map-2016

NAFTA allows the tariff free trade of goods through US, Mexico and Canada.  You can argue for days whether this is good or bad.  Statistically there was a net benefit as a whole, but that gets all thrown out the window.  To give you an example, Walmart had something like 900 retailers in 1993.  Currently, and partially due to NAFTA, Walmart has over 11,000 stores across the world and is the largest private sector employer in the United States.  They do this by provided the absolute lowest price, ordering in bulk and streamlining their operations.  You can say what you want about Walmart, but they are efficient, smart and would be utterly devastated by a 45% tariff placed on overseas/Mexican goods.  Walmart employees 1.4million people in the US.  There are two supercenters in the city I invest in and  dozen in the city I live in.  I can only imagine the shock when goods from local retailers are suddenly 45% more.  I would seriously worry that a number of my renters would lose their jobs and thus stop paying rent.  Thats a huge net negative for real estate investment.

“EIGHTH, I will direct the Secretary of Commerce and U.S. Trade Representative to identify all foreign trading abuses that unfairly impact American workers and direct them to use every tool under American and international law to end those abuses immediately”

This is so completely vague I don’t really know what you can say.  Are you addressing the dumping of chinese steel on the world market? OPECs stranglehold on oil production? Chinese hoarding or rare earth materials?  Ending those abuses is great in theory and a net positive for real estate investment, but there is significant lag time from implementation to seeing an effect.  Also, expect some sort of economic retaliation from those countries in turn.  Net negative or net positive for real estate.

“NINTH, I will lift the restrictions on the production of $50 trillion dollars’ worth of job-producing American energy reserves, including shale, oil, natural gas and clean coal.”

That would be an overall net positive if the world wasn’t already vastly over-supplied with crude, natural gas and coal.  So long as chinese workers mine coal for $5/day, West Virginia will never see its production restart.  You may see net positives in areas that produce oil and gas, but again those are highly volatile areas of investment.  The boom and bust of that industry is not conducive to long term investment in real estate.  Lastly, renewables are now at, or below cost parity with fossil fuels.  There’s more jobs to be had at Musk’s Gigafactory or Iowa’s wind farms than there is in shale production.  Net neutral to net positive for real estate (but not by much).

“TENTH, lift the Obama-Clinton roadblocks and allow vital energy infrastructure projects, like the Keystone Pipeline, to move forward”

Last time I read Keystone would only produce a few dozen stable jobs after construction is complete.  This will have little to any effect on real estate investment.

“ELEVENTH, cancel billions in payments to U.N. climate change programs and use the money to fix America’s water and environmental infrastructure”

Theoretically this would be the biggest net positive so far.  How and when that money gets to the cities is still to be seen.  This is out of the President’s control, but would be a good start.  Currently Flint is a wasteland, and anyone investing there is losing their shirts.  I’m willing to bet good money there are a dozen cities like Flint to pop up when this money is available.

“TWELFTH, cancel every unconstitutional executive action, memorandum and order issued by President Obama”

Trans Pacific Partnership would be the major loser here.  Any clean power plan is gone.  Its effect on real estate investment are completely unknown as its impossible to know which orders Trump will axe.

“THIRTEENTH, begin the process of selecting a replacement for Justice Scalia from one of the 20 judges on my list, who will uphold and defend the Constitution of the United States”

Aside from any sort of bank regulation or pending cases with Fannie Mae or HUD, this is a net neutral to real estate.

“FOURTEENTH cancel all federal funding to Sanctuary Cities” 

Honestly I have no idea how this would work.  The loss of federal grant money to any city would be terrible for investors.  A loss of several billion dollars in federal funding on the west coast would have reverberating effects on surrounding property values.  Cuts to social services or increased local taxes would follow.  Both are net negative for real estate investment.

“FIFTEENTH, begin removing the more than 2 million criminal illegal immigrants from the country and cancel visas to foreign countries that won’t take them back”

This effect on real estate really depends on what it will look like.  If it is simply deporting criminals currently in the system, then its net neutral.  If its deporting aliens via traffic stops and warrants, then its potentially catastrophic for many latino areas.  Deported tenants mean lost revenues.  Empty houses lead to vandalism.  All lead to lower property values in the short term.  Net negative for real estate most likely.

“SIXTEENTH, suspend immigration from terror-prone regions where vetting cannot safely occur. All vetting of people coming into our country will be considered extreme vetting.

If he is talking about poor refugees from Syria, than this wont effect real estate at all.  If he bans all Muslims from entering the country for any amount of time, that can have severe consequences on real estate.  Qataris, Saudis, Iranians and Turks account for large amounts of real estate holdings on the coasts.  If they are forced to sell, or not allowed into the country, that can potentially be very bad for metropolitan areas.  Less investors means a net negative for real estate.

Additionally, he plans to push through the following Acts:

Middle Class Tax Relief And Simplification Act: Tax brackets reduced to 3 (12, 25 and 33%).  Increases standard deduction to $15,000 or $30,000 depending on marital status.  Deductions capped at $100,000 or $200k for married couples.  Obamacare tax eliminated. Alternative minimum tax and estate taxes are both eliminated. Childcare is now tax deductible.  Business tax reduced from 35 to 15% across the board.  Corporate AMT eliminated.  Most corporate expenditures eliminated.

For real estate investors, and small businesses in general, this seems awesome and a net positive.  However, in the long run this will run up the deficit significantly, and massive changed in the tax codes are always messy things historically.  It is also unclear if this will have any sort of boost to middle and lower income families.  Net positive to net neutral.

End The Offshoring Act: Establishes tariffs to discourage companies from laying off their workers in order to relocate in other countries and ship their products back to the U.S. tax-free.

Great in theory, absolutely terrible in practice because of this:

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And this:

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Discouraging companies from relocating overseas is a well-needed regulation for this country and in general would be a net positive.  Doing this by establishing tariffs on goods said companies produce overseas would lead to trade wars and retaliatory tariffs.  Imagine China imposing a 50% tariff on Iowan corn or 30% on cars produced in Alabama.  Worse yet, they could escalate by simply refusing to by US Treasury bills.  If you want an example, read up on the Smoot-Hawley Act.  Long story short, the tariffs imposes reduced America’s imports AND exports by more than half.  HALF.  The day Canada slaps a 60% tariff on trucks made in Michigan is the day Michigan’s economy collapses.  I can’t begin to explain how negative this will be for real estate investment and investment as a whole.

American Energy & Infrastructure Act: Leverages public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over 10 years. It is revenue neutral.

More roads and bridges are good for the economy in general.  Having to pay every time you drive on them is not.  The Act basically provides large tax credits to investors who build infrastructure projects minding of course said projects have a revenue stream.  That means lots of toll roads.  That means potential abuses of eminent domain which is always negative for real estate investors.  Could be positive or negative depending on where you invest.

School Choice And Education Opportunity Act:  Redirects education dollars to give parents the right to send their kid to the public, private, charter, magnet, religious or home school of their choice. Ends common core, brings education supervision to local communities. It expands vocational and technical education, and make 2 and 4-year college more affordable.

The last part I assume is just a lovely theory not backed by anything.  Essentially these are block grants given to the states via the Dept of Education.  Better local schools always means better real estate appreciation.  However, not ever area has access to charter schools.  Moreover, the areas with bad public schools rarely have openings for an influx of charter students at new charter schools.  Charter schools also don’t always equate to better schools, as many have failed in the past.  This is net positive, but needs to be flushed out more and tested.

Repeal and Replace Obamacare Act: Fully repeals Obamacare and replaces it with Health Savings Accounts, the ability to purchase health insurance across state lines, and lets states manage Medicaid funds. Reforms will also include cutting the red tape at the FDA: there are over 4,000 drugs awaiting approval, and we especially want to speed the approval of life-saving medications.

Socially, its effects are pretty obvious.  Twenty million people lose their insurance, including yours truly.  Obamacare recipients aren’t sickly degenerates.  Many of them are small business owners.  While yes, premiums have risen, there is no proof here that premiums wont continue to rise without ACA regulations.  That stresses both the investor, the buyer and the tenant.  With less money to go around, fewer houses are bought and rent is not paid on time.  Unless they can flush out what HSAs truly mean to the marketplace, Im having a hard time seeing how this is anything but a net negative for real estate investors.

Affordable Childcare and Eldercare Act: Allows Americans to deduct childcare and elder care from their taxes, incentivizes employers to provide on-site childcare services, and creates tax-free Dependent Care Savings Accounts for both young and elderly dependents, with matching contributions for low-income families.

This would most likely be a huge net positive for buyers and renters.  However, its implications are not yet known.  Its negative in revenues to the government for sure, and its passage by congress is questionable at best.

End Illegal Immigration Act: Fully-funds the construction of a wall on our southern border with the full understanding that the country Mexico will be reimbursing the United States for the full cost of such wall; establishes a 2-year mandatory minimum federal prison sentence for illegally re-entering the U.S. after a previous deportation, and a 5-year mandatory minimum for illegally re-entering for those with felony convictions, multiple misdemeanor convictions or two or more prior deportations; also reforms visa rules to enhance penalties for overstaying and to ensure open jobs are offered to American workers first.

I will believe it when they start construction.  I would treat it as any large infrastructure project.  Areas around the Hoover Dam temporarily boomed during construction.  Border cities might see a temporary boost.  The changes in incarceration don’t really matter as far as real estate goes.  Slight positive if they actually build the thing, otherwise, neutral.

Restoring Community Safety Act: Reduces surging crime, drugs and violence by creating a Task Force On Violent Crime and increasing funding for programs that train and assist local police; increases resources for federal law enforcement agencies and federal prosecutors to dismantle criminal gangs and put violent offenders behind bars.

I suppose in general better law enforcement is a net positive to real estate values as a whole unless areas get sequestered or locked down.

Restoring National Security Act: Rebuilds our military by eliminating the defense sequester and expanding military investment; provides Veterans with the ability to receive public VA treatment or attend the private doctor of their choice; protects our vital infrastructure from cyber-attack; establishes new screening procedures for immigration to ensure those who are admitted to our country support our people and our values

Increased military spending is great in towns that manufacture military equipment.  So see booms in cities that have Boeing, GE and General Dynamics-type plants.  Cities with naval facilities will see a boost like San Diego and Norfolk.  Net positive if it actual passes congress.

Clean up Corruption in Washington Act: Enacts new ethics reforms to Drain the Swamp and reduce the corrupting influence of special interests on our politics.

This doesn’t actually say anything.

So in conclusion, it doesn’t look all bad from the bullet points.  However, the effects of tariffs upon this country far far outweigh any benefits they may bring to local real estate prices and investment.  Can America retool to be self-sufficient in manufacturing?  Sure, if there is a will to do so.  But there is significant lag time from implementation to action.  As much as I would love to see my renters employed in manufacturing plants making household goods, they are going to have to survive the closing of their local Walmarts and various other service sector employers.

The effects of tariffs upon a country that has had significant benefits of free trade agreements cannot be ignored.  Most consumers cannot survive a 40% increase in household goods or produce, certainly most small businesses cannot.  Hell, most large corporations will have difficulty coping. Unless Trump comes out with some sort of gradual tariff increase, or an actual hashed-out plan, I don’t see this ending well for real estate investors.

 

 

 

 

 

 

 

 

 

 

 

 

 

How Did This Happen and Where Do We Go From Here?

Lots of finger pointing on cable news today.  Lots of gloating on social media.  Depending on who you watch/read there are two narratives: Businessman defeats Washington insiders or Flawed candidate loses to political novice.  Then there is just a ton of memes and childish name calling when is par the course for US elections.  I just tune it out.

Most of my liberal friends in the nation-state of Californiastan cant seem to fathom how a man so vile, so toxic, so blatantly sexist/racists/misogynist could attain the highest office in our nation.  My answer for them?  You need to get out of the state more often.

California, for the most part, has survived the horrors of trade agreements like NAFTA and CAFTA.  Hell, most of us benefited from them.  But the states we consider fly-over status?  Not so much.  From my blog, you can see I travel to the midwest often, namely to Indiana.  The town I visit, Muncie, was once a thriving metropolis. So much so, it warranted stops by presidents.

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This is the Borg Warner plant in the 60s, and yes that’s JFK.  They made transmissions, chassis, suspensions and numerous other automobile parts.  At its peak, it employed 5000 good paying union members.  This is it today:

The BorgWarner factory that once employed thousands of people sits shuttered in Muncie

When it closed in 2009, it employed less than 800 people.  Whats left of the plant lies empty in the heart of Muncie, IN.  It was a victim of a perfect storm.  For years, automation had whittled away at its work force.  It simply didn’t take 5000 people to build a transmission these days.  What’s worse, due to NAFTA and CAFTA, a foreign worker would do the same job for pennies now without penalty.  More and more production lines were shipped down south or overseas, or simply eliminated altogether.

muncie-abandoned-factories-1

But there was a human toll to all of this economic carnage. People lost their jobs and saw their pensions cut.  Those people were mostly white, mostly older.  You can find them now dotted around Muncie.  They either live off their meager pensions or they work soul-killing service jobs.  These men and women didnt go to college, and college isnt an option for them now.  They are what the pundits call “low information voters” which is somehow more insulting than just calling them stupid.

To call them all the same is not doing your homework. What we liberals see on our TV is usually the extreme, because that’s what gets ratings.  No one wants to hear how Fred lost his pension and works at Walmart when there’s a man on CNN screaming the word “nigger” at the top of his lungs.  Yes, some of them are racist.  A few are white nationalists, a spattering of them are neonazis.  The KKK started a few towns over from Muncie, so that’s unsurprising.  For every Nazi-saluting asshole, there are a 100 men and women just trying to make ends meet.

women-of-the-klan-muncie-indiana-1924

Muncie women in the 1920s

They have two things in common though: They all feel victimized in some way and they are all very pissed off.

gerald-poor-l-talks-to-long-time-friend-and-former-co-worker-larry-terrell-in-front-of-the-now-shuttered-borgwarner-factory-in-muncie-indiana-us-august-13-2016-poor-worked-at-the-factory-for-over-40-y

To the college educated who can give you economic numbers and solid arguments with their anger, these conservatives only have their anger.  Many lash out at whatever is convenient.  Obama seems to be a common target.  Hes everything they are not: highly educated, liberal, well articulated and black.  Clinton was a natural segway.  All of this comes with an air of superiority, which I confess I partake in as well.  All of it breeds resentment.  Clinton is to be opposed simply on principle. Sure a few old timers remember the days of Bill Clinton and NAFTA.  They can back up their anger with reason.  The Clintons destroyed their lives in Muncie.  You can replace any midwestern or southern town name with Muncie.

kkk

And lets be honest here. Living in Muncie isn’t that fun these days.  Theres Ball State and the hospital for sure, but the major employers are gone.  Ford and GM will never come back.  Chrysler doesn’t even exist anymore.  Where all the old houses in LA were replaced with shiney new construction after the housing crash, rotting shacks still dot the city.  Its leaps from what it used to be sure, but its not exactly booming.  Heroin addicts, Muncie’s walking dead, meander through the city.  With nowhere to go and nothing to do, its no wonder the city’s inhabitants turn to drugs.  There are cracks of light here and there, but a cloud hangs over the city and the state in general.  Thats what its like to live in the sticks.

muncie-drug-arrests-fox

Then comes along someone who changes it all.  It could have been anyone, but it just happened to be Donald Trump.  He says he can make America great again.  They look up from their Budweiser and remember what it was like to have pride in their job.  They look around their city and remember what it was like when everything had a fresh coat of paint.  They remember they used to be happy living in Muncie.  It was a nice town and can be again.  They listen to television liberals who say the manufacturing jobs are gone forever, then hear an orange man saying that’s untrue!  What do you expect them to do?  Can he back up what he says with numbers and facts?  No, and they don’t care.  They’ve spent the day working their ass off at the local Walmart loading dock for minimum wage when they used to build transmissions for $20/hr in the 90s.  They’ve been living at rock bottom for some time now.  Everything from here is an improvement.

So thats why Trump is a thing.  Whether Trump pulls off anything that he’s said is another post entirely.  Personally, I think all the people above were sold a bad bill of goods.  As a business owner I can attest to how frustratingly inefficient government can be, and I think Donald will share my frustration.  We now have four years to find out if a businessman makes a good president.  One thing is certain: if he doesn’t come through on his promises, the backlash of the midwest will be severe and whatever follows will make Trump look like Mother Theresa.

 

 

 

 

 

 

 

 

 

 

 

 

To My Liberal Friends Wishing to Secede

So Donald Trump is going to be our new President and my liberal friends think its about time to separate the great state of California from the rest of the union.  This petition is going around.

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Secession?  Really?  The man hasn’t even step foot into the White House and you are talking about blowing up a 300 year old union?  I am about as liberal as you can get in California, but just stop and think about what you are doing for a second people.  If you think Californian secession is a good idea, I need you to answer the following questions:

  1.  Are you prepared to fight for your beliefs?  This includes, but is not limited to openly declaring war against the rest of the United States.
  2. Are you prepared to turn your neighborhoods, schools, parks and beaches into potential war zones?
  3. Do you own and can you operate a firearm?  Do you have sufficient ammunition for an extended war?
  4. Do you have sufficient supplies for you and your family in case war breaks out?  This includes food, water and medicines.
  5. Are you comfortable shooting police officers, soldiers and potentially your own neighbors?

If you answered yes to all of these questions, you are unlike any liberal I know and you are probably an asshole to boot.  Yes, the petition says that secession can be done peacefully but don’t kid yourself.  That’s not going to happen.  No congressional convention is going to happen and no constitutional amendment will ever be granted.  That leaves only one other option: War.

What this looks like to the rest of America is a bunch of spoiled Millenials lashing out on Facebook because they didn’t get their way.  It wasn’t funny when Trump supporters posted memes all over social media saying they’d take out the government either.  This is in the same category of lunacy.  You have all the manners of crazed militiamen but none of the weapons training.

usa-election_militia

Think these guys, but vegetarians.

As the YesCalifornia.org site says, we are the sixth largest economy in the world by ourselves.  Do you think they other 49 states and the federal government would just let you sign a petition and walk away?  No.  Do you think Nevada, Arizona and Oregon would suddenly be okay with taxes and tariffs set on their goods?  Or maybe the US military is just fine with letting you walk away with a number of military bases, hardware and personnel?  Get real.  You would crash both our economies.  Countless people would lose their jobs, billions of dollars would become useless and I am willing to bet a ton of people would end up dead.

I’m willing to concede to you one point: secession should always be an option for any state with a legitimate grievance.  There may come a day during the Trump presidency where he crosses the line.  That may come when he starts rounding up anyone that looks remotely Mexican.  It may come when he starts jailing his political opponents.  Or maybe it will come 4 years from now when he refuses to concede after losing an election.  Then, by all means secede and let the world be behind you.  I will gladly take up arms with my fellow Californians, but not now.  I will not secede simply because the election didn’t end up the way I wanted it to, and neither should you.

 

 

 

 

 

 

 

BiggerPockets Musings

If anyone is thinking of getting into the real estate investment business, the website http://www.BiggerPockets.com is a must.  Its a basic how-to guide that I wish was around much earlier in my real estate career.  Its basically a forum with how-to guides on how to buy, rent and flip properties.  For the most part, invaluable wisdom that you used to have to pay for a few years ago.  Now its free.  However, like any internet forum group, it forms its own group-think mentalities that just have a hard time wrapping my head around.  See, below:

I can only tell you from my perspective owning over 100 rentals currently (mostly in NW Indiana) and being on the construction end of over 500 for me and other investors and helping clients find over 400 over the last 8 years that this price point will not perform over the long haul better than the 60k-120k areas.
However what I can guarantee is that you will have more brain damage with more properties to get to the same financial freedom # these houses look like 15-30% cap rates on paper but at the end of the day (if you get a large enough statistical snapshot) you will find that you will end up with a true 10-12% cap with 2x (or more) the headache the other thing to consider is upside and downside of the cyclical market in general… The homes in the 85-150k range in my opinion have a better chance to raise in value over time because they are in more desirable places (everyone wants what everyone wants and no one wants what no one wants) I’m not saying this is how we invest for cash flow but it certainly has to be part of the conversation
I also believe that in an area like Indiana where the land is so cheap the price of the homes do not go down as much (in this higher price point )in a down turn. However in those areas where the houses are 30-40 now you will see homes at or under 10k meaning (in my opinion higher risk) out of the 104 rentals we have only 5 are in these lower price points and we have 4x the turn over and 5x the repairs which really screws up your equations….. If you do invest in these areas and want accurate #s to go off of just make sure you adjust your vacancy to 10% and your maintenance to 12% and most property managers I know want 10% for management For these compared to the 8% you can get in the higher price points…. Hope this helps give insight. I know and love Shawn and I know he is trying to help as am I

If I can be of any assistance let me know
Good luck

Tom Olson

Now, Im sure Tom is a great guy.  But, like many users of the site, he’s fallen into the group-think trap.  He’s also an older more-established investor thats been around for awhile.  What worked for him, worked for him.  It doesnt necessarily mean to take his advice as the word of god.

For starters, 20 years ago, anyone who wanted to invest in Northwest Indiana would have been laughed at, and rightly so.  Gary, IN is still to this day one of the murder capitals of the US.  Does it work now?  Sure.  No one can afford to live in Chicago anymore, and prices and taxes are cheaper on the other side of the border.  Did anyone even consider this 20 years ago?  No.  Because owning anything east of the border was investment suicide.  A few years pass, some investors take some risks like Tom here, and PRESTO, instant money maker.  Toms advice, like anyones, is based on his experience.  And his experience doesnt always work for new investors.

This comes from a BiggerPockets.com thread regarding investment in $40,000 or less rental properties.  Its chocked full of people talking about some “$40k” rule where you immediately dismiss a property if its valued that low.  As someone who buys at tax sales in Indiana, I was perplexed to read over and over again how stupid I am for investing in such terrible properties.

@Mike D’Arrigo    this topic is brought up once a week on BP

If you live in the area IE within 30 to 40 minutes of the asset and you want a job.. then by all means these can work.

if you live on the west coast and want to sit in your barcolounger and rely on PM and your tidy tenant then your going to lose your %@@ on these type of 30k homes.  flat out guaranteed.. you will as a out of state investor end up selling to some wholesaler like @John Babcock who will then sell to some TK company or other investor..

FOLKS remember 50% of all these homes come from Failed landlords.. plain and simple that’s a fact.. If you live in the market and want to make it a job then that’s fine

I have cleints I fund that own hundreds of these and they work them.. BUT no PM  they self manage it all they have their own rehabbers etc..

so really depends on who is the buyer

This guy for instance.  You’d think the world was ending in Muncie, Indiana where I currently hold all of my properties.  Im sure Jay has lots of idiot clients that mismanage their rentals, but losing my ass guaranteed?   Pretty bold statement Jay.  Got any data on that?  No?  Just a gut-feeling huh?  Thats what I thought.

What they are both getting at is that lower priced homes tend to have more upkeep and repair costs.  In other real estate news, duh.  I understand that these boards are for teaching and learning, but sometimes it devolves into a weird pecking order where older more successful landlords shit all over younger people like myself.  I hate to tell Tom and Jay, but Im not paying $120,000 for a house in Indianapolis just to make $300 more a month in rent.  Rather I buy a property in Muncie’s tax sales for $10k and put $10k into it and leave it a solid rental for 20 years than pay retail in Indianapolis.

Like any group, they hate people that push the envelope of the group-think paradigm.  Jay and Tom need to pull their heads from their asses.  Real estate professionals have been spoiled to long with the “fix-and-flip” attitude.  People approach real estate investment from all sorts of angles and with varying amounts of resources.  Calling some recently graduated college student and idiot for buying a $30k home isnt productive.  You can make money off of them if you know what you are doing.

I bought an 8-unit apartment building in Muncie, IN for $20,000 early last year.  For all intents and purposes, people on this forum would have called me retarded.  Fifty thousand dollars worth of rehab later the units are rented out and the building is pulling in nearly $50k A YEAR.  Dont tell me it cant be done.

Now if you’ll forgive me, my barcolounger is calling.

 

 

Are we going to do this shit again America?

I am thankful enough to live in a place where I have no idea what 50 dead bodies looks like all lined up.  Throughout my travels in the world, I’ve seen the occasional dead person, but never more than one at a time.   Throughout my travels on the internet, I’ve seen the pictures of what a large caliber weapon can do to a persons body.  But, I am not naive enough to deny that pictures can only show so much.

Nor am I particularly interested in finding out what that looks like today or any other day.

But I find myself writing about a mass shooting again.  This time, the largest in US History.  This time, in a gay night club in Florida.  The who and where are different, but the story is relatively the same.  Lone wolf buying American weapons. Democrats will blame gun control and Republicans will blame Islamists. Rinse. Repeat.  Eventually someone gets called a Nazi and the debate devolves from there.  Nothing is done, nothing is solved.  Its another morning in America.

This country has become a place so polarized, its almost beneficial to just keep your mouth shut.  Not only are opposite political beliefs morally repugnant, but the people that spout them are now evil.  Im not sure when this happened, and if you ask either side they will give you a different answer and date.  The Democrats will says Bush after 9/11.  The Republicans will say it is either Clinton or Obamas fault.  Neither are right.  Both are right.  It just depends on which news station you tune into I suppose.

Its easier to put up a funny meme calling Donald Trump Hitler than it is to sit down and debate his immigration policies.  We live in a Twitter world now.  Characterize your arguments in 144 characters or less.  Or perhaps a political cartoon that doesnt take much thought or effort to post to Facebook?  Obama’s going to take your guns?  Seems reasonable enough, click share.  Trump’s creating death squads?  Better re-tweet it before the meme gets stale. Either way, nothing of substance is said.  You think you are having a discussion, but so long as you remain behind a keyboard, its impersonal, brutish, and short-lived.

And it got me thinking, what is it I exactly believe, because I honestly dont think I’ve ever written it down.  Its rather easy to label me, just from Facebook posts alone.  But there are caveats, asterisks, and lots of “buts”.  So I thought I’d list them here, not just for a meager audience, but for me.

  • I believe the United States of America is the greatest country in the world, but I am not naive enough to believe we’ve acted like saints since 1776.
  • I believe that for the most part, people are fundamentally good.  But I have met truly evil people in this world, and I know it can never be a utopia.
  • I would most likely be defined in this country as a liberal, but I have some conservative viewpoints as well and I dont think that makes me a bad person.
  • I backed Bernie Sanders, but I dont think Hillary Clinton is literally Satan.
  • I think Trump makes an excellent businessman, but a terrible president.
  • I think everyone in this country has the right to life, liberty and the pursuit of happiness.  But I dont think this country has been or ever will be some libertarian paradise.
  • I think people who follow the teachings of Ayn Rand live in a fucking fantasy world and have no business in our democracy.  The same goes for Karl Marx.
  • I think service to this country should be mandatory, whether it be civilian or military.  I think people who have participated in said service should be allowed to vote in elections.
  • I think voting should be mandatory and that democracy isnt a spectator sport.
  • I think keeping citizens healthy is governments job.  I dont consider health care a right, but I do think the government should be responsible for its citizens.
  • I think our immigration policy is absolute garbage, but that it doesnt make me a racist for saying so.
  • I think if an employer is caught using illegal immigrants, they should be fined heavily.
  • I believe H1-B visas shouldnt be a thing.  Either be actively seeking citizenship and be a tax payer, or dont bother.  If you cant operate your business without foreign labor, then move your business to that country or shut it down.
  • I believe the market minimum wage is zero dollars an hour, and that doesnt work in this country.  I also think raising the minimum wage in this country shouldnt make you a socialist or a communist.
  • I think if paying someone a few dollars more to work a cash register adds a few cents to your Big Mac, thats your problem, not theirs.  Not wanting to live in abject poverty shouldnt be looked down upon.
  • I think people should know at the very least, the definitions for communism, socialism and capitalism before opening their mouths to comment on them.
  • I know that 99% of people that come to the USA do so to make a better life, and most US citizens would do the same if the tables were turned.
  • I think excluding certain races from entering the country is fundamentally wrong, but I do believe that certain political views are incompatible with democracy and asking those questions is just fine with me.
  • I believe that if you have no intention of participating in democracy then you have no business in this country.
  • I believe building a wall to keep an entire country out is pointless, silly, and those who believe it would work should be openly mocked.
  • I believe people should learn how amending the Constitution works before opening their mouth about the subject.  Doesnt matter what side you are on, its usually not going to happen.
  • I believe abortion should be rare, as well as legal.  But I understand the other side’s points.
  • I believe that every man and woman over the age of 18 should be able to own a firearm.  But I also believe they should be able to pass a background check while also proving they can safely fire and store it.
  • I dont believe an assault rifle is a decent weapon for home defense, but I dont think you should be banned from owning one as a responsible upstanding citizen.
  • I believe that so long as you can buy a weapon at a gun show with a background check, all concealed carry permits should be granted.
  • I think the Federal Government should be involved with who can buy guns, when and where.  But that is all.  I think the states should do the rest.
  • I think there is a group of people in this country that arent taxed correctly.  But I also think that taxing people isnt always an option for fixing a problem.
  • I think people that want a flat tax on anything dont understand how taxes or the economy works.
  • I believe anyone, foreign or domestic, who raises arms against the US government should be prosecuted for treason.  I dont care how good your point might be.
  • I believe all disputes, large and small, can be solved via democracy and justice.
  • I believe you cant run a government at all like a business.  The fundamental views of capitalism are at odds with the fundamental views of democracy.  People that say this either dont understand government, business or both.
  • I dont believe that businesses should be responsible for the health care of their employees.  That is the governments job as well as the employees.
  • I dont think all drugs should be legalized, but I think that the way we treat drug addicts in this country should change.  Addicts arent criminals.
  • That being said, I think trying to treat someone who just wants to do drugs until they die is pointless and only so many chances are given.
  • I think keeping US citizens on lists is pointless if you arent going to do anything about it.  I think anyone should be able to know what list they are on and how to get off of one.
  • I think you should be able to marry anyone of your choosing so long as they are competent and over the age of consent.  After that, you are responsible for whatever happens.
  • I dont believe the government should sterilize anyone, but I think at some point you have to argue to them about why you want a dozen children and how you are going to pay for them.
  • I think it is the government’s responsibility to have the most educated work force it can afford.  I dont believe that people should go hungry because they want a better education.
  • But I dont believe that all colleges should be free and without competition.  If you want to major in underwater basket weaving, you are going to pay for it.
  • I realize that some of these views might be contradictory of each other, or impractical.  But Im also up to changing these views if someone makes a solid argument.
  • I think this county’s best days are in the future, not in the past.

This is a short list.  Im up for a debate most days, but as of right now I am just so tired of this bullshit.

Black Lotus Whisperer

If you live in San Diego long enough, you will eventually become acquainted with the local homeless population.  San Diego is unique in that many of its homeless are also veterans often suffering from PTSD or other mental illnesses.  Its a much different feel than the happy-go-lucky crack addicts I often dealt with in Downtown Los Angeles.   This often causes me to steer clear of most of them, just out of habit.  Meth is also much more readily available here for some reason, which causes…issues…I’d happily turn my back to most drug addicts, but not the meth users.  They’d stab you for your shoes if it meant a quick high.

So it was obvious I kept the obviously methed out man in my sights as he approached me.

I’m getting ahead of myself.

Last night I found myself in an underground bar listening to 3 white dudes rap after a minor league hockey game.  Up until a few hours before, I was unaware minor league hockey was a thing.  They make up for their lack of playing with $2 beers til 8pm, of which my compadres and I took full advantage.  They are called the Gulls, and they play in the Valley View Casino Center in San Diego.  I recommend checking them out just for the experience.

A slightly inebriated me said goodbye to my friends and waited for the local ride sharing service to pick me up.  I stood alone (or so I thought), in a massively empty parking lot around midnight.  The occasional light flickered, traffic buzzed from the far off freeway.  I was not expecting nor wanting a conversation.  But never the less, I received one.

I heard him before I saw him.  A frantic shuffling, like some toddler who’s father never told him to pick up his feet.  He was sweating as if he had just ran a marathon in Death Valley.  Meth, I thought.  He probably wanted money.  I had none, at least not in the paper form.  I stood up a little taller, trying to make myself look like less of an easy target.  Not that I was worried.  Its hard to tell how old someone is when they are in the depths of a meth binge.  He was either 30, or 60.  Five-foot nine maybe?  A buck fifty in weight.  Meth skinny, with dirtied disheveled brown hair.  I could take him if needed.

“Hey man do you have any cash you could spare?”

Typical request I get almost weekly where I live.  I answered truthfully.

“Naw dude I’m out, sorry.”

What he asked next caught me by surprise.

“Do you know anywhere around here where people play Magic?”

Taken aback, I responded, “You mean, like, The Gathering?”

His eyes lit up like he had found a kindred spirit.

“Yeah! Awe man I’ve been asking people all night! No one knows what I’m talking about!  I’m trying to sell this, and I don’t know where to find a shop.”

He dug into his pocket and pulled out something that looked like this:

magic-unwrapping

If this was some sort of scam, I thought, it is way too specific.  Magic: The Gathering was/is a popular card game my friends and I played religiously in elementary and Jr. High School.  I wont bore you with the intricacies, but it was nice way for us nerds to get together and waste some time.  Im not sure if it was popular to the point where everyone knew and played it.  Most people I know in my generation don’t have a cursory idea it exists, let alone what cards do what and how much they are worth.  So it was unsurprising to me that this junkie was having a hard time finding someone who knew where to sell this card.

Oh, and for the uneducated, this is one of the most rare cards in the game.  Its so ludicrously over-powered, its actually banned from competitive play, but that didnt stop my friend Neil from playing it constantly.  Asshole.

To give you an idea of what its worth, a mint condition Beta Edition Black Lotus is currently for sale on Ebay for $125,000.  I couldnt tell what edition this man held, but it could be worth anywhere between a few hundred and a few thousand.  I was scared to think what this guy would take for it.

I was the only person in this parking lot for the most part.  What were the chances that he would come across someone who knew exactly what he had and where to take it?

In fact, I did know where people played Magic: The Gathering around there.  I had lived across the street for a few years and this place called Gamerave was a block away.  It would obviously closed at this time of night, but that didnt stop this man from thanking me profusely for showing him where it was located.  He shuffled off into the night, never to be seen again.

God speed my friend.  I hope you find what you are looking for.

The Silly Idea of Invulnerable Parents

 

I recently spent the weekend in the local Veterans Hospital with my father.  He was undergoing surgery for mouth cancer.  Squamous Carcinoma they called it.  Nasty stuff.  This is not the first cancer he’s had either, nor is he a stranger to the ER.  Three heart attacks, two “minor events”, a pacemaker installation, one gallbladder removal, throat cancer and now this issue.  If you saw my father now you might see a tired, hollow figure that looks much like myself.

“How long have you had issues eating,” the nurse asked.

“Since June,” my father answered hoarsely.  Previous radiation treatments had destroyed his saliva glands.

FUCKING JUNE?  OF LAST YEAR?  Jesus Christ Dad!

They wanted to cut out a large piece of his cheek, which as now cancerous and spreading.  Apparently he saw it as a minor issue, that, or he is suicidal. I honestly couldn’t tell anymore.

“Do you smoke,” the nurse asked going down the checklist.

“Not since ’85,” Dad replied.

“How much did you smoke then?” The nurse and I stared at my father, both of us now genuinely curious.

“Five packs a day,” he answered, slightly guilty.

Wait, what?  I was alive in 1985, albeit 2 years old but I was still around that shit.  For those of you not good at math, that’s 100 cigarettes A DAY.  No wonder I had asthma.

I suddenly realized that my father’s family never had heart issues. Cancer doesn’t run in our family either, but a few distant relatives keeled over from it anyways.  What my father’s side of the family had were a ton of unhealthy stupid people.  No one could be bothered to properly feed themselves from what I’ve gathered over the years.  The few interactions with the aunts on that side led me to believe this fact.  If it wasnt lard added to the recipe it was sugar.  Everyone smoked, well into their fifties.  Of the aunts and uncles I had as a child, only my father remains now.

Watching one’s parent die is never an easy thing.  I think my father’s plan was to go peacefully in his sleep after the last 30% of his heart stopped working, but life seemed to have other plans.  We all must pay the toll for our sins and this is his.

Unfortunately for me, I have to work the toll booth.

For some reason my dad has named me executor of his estate and given me power of attorney.  My older brother doesnt handle these situations well, and Im not sure he wanted to entrust him with those powers anyways.   Twenty years prior to these events my father decided to use my brother’s name and SSN on a bunch of credit cards fraudulently.  Sometimes I wonder if one day he just flipped a coin, or maybe he just couldnt remember my SSN and chose my brother.  Neither are comforting.  A lifetime in finance taught me how valuable a clean credit can be.  My brother is still working through the fraudulent charges.  He doesnt talk about it much.

And I get to drive this person to his doctor’s appointments.

During these appointments, when I hear about his health, his diet and his attitude I just want to strangle him.  I see a child in front of me, and not a father.  Up until today, and after much convincing, he uses a cane to walk.  This is after falling down twice and severely hurting himself.  He continues to eat fried chicken even after 3 100% blockages to his heart.  He talks about getting a new truck and a new flat screen TV.

I filter it out much like I would any toddler on a toy binge.  He’s always been on about something trivial like that for as long as I can remember.  If its not flat screen TVs, then its a boat, if its not a boat, its a car or a dog.  I remember as a child he used to pick us up and immediately take us to Toy’s R Us for the latest and greatest toy.  Of course he would neglect the child support payments.  Toys had to be had.  As a kid it was great, but as an adult looking back on it makes me cringe.  GI Joes are sort of pointless when mom was struggling to pay rent.

The point Im trying to make is that I’ve seen my father in a different light for many years now.  No longer the invulnerable man who taught me how to drive or to swing a bat.  He’s just a person.  Flawed, broken like the rest of us.  He taught me more on how not to be a father than the opposite for all of the above reasons and more.  Was he a bad father?  My gut says no.  A good one he certainly was not, but a bad one he wasn’t either.  He was merely mediocre, and that makes me sad.

Motown Blues Part 2

I managed to dig through my personal belongings and found my phone.  Quarter charge.  One of the orderlies must have been nice enough to shut it off before putting it in the bag.  That was nice of Detroit at least.  My first call was to the Holiday Inn of all people.  All of my shit was still in my room and I’d rather not have them throw it away.

The second was to my voicemail.  The usual stuff.  Few calls from Josh looking for my status, one from Sargent Blount asking me to come in for an interview.  One from mom.  For a second I was wondered why he wanted to speak to me.  Usually I didnt converse with law enforcement after evictions.  That’s when reality started to catch up.

I had totally forgotten that I killed someone the other day.

That’s the sort of thing that your brain often times has problems processing.  To me, it was more of a dream, but the encroaching pain in my shoulder said otherwise.  I asked the nurse if I was healthy enough to be discharged.  After a quick consult with an over-worked doctor, I was given as many Percocet as I could legally have at once and shown the door.  I sent the bill to HUD.

The funny thing about coming through the ER is that you leave with the same set of clothes you arrived with. One wallet (mysteriously missing cash but otherwise intact), one HUD badge, one pair of battered dusty jeans, one button up shirt (bloodied and dusty, but otherwise intact), one set of Type IV ballistic plate, shoes, and socks.

I popped a ‘cet on the curb outside and examined the Kevlar.  Ballistic plate was gone, but the hole was pretty apparent. I could fit my one good thumb into it.  Kevlar took the rest of the projectile.  I sat for a long while on that curb, enjoying the rare Detroit sunshine.  I wasn’t sure if it was the Percocet, but I felt good to be alive.  Colors were brighter, sounds crisper, smells stronger.  It was about that time that I remembered I did indeed piss myself earlier.

I got a cab back to the Holiday Inn.  Thankfully they had no decided to throw away all my stuff.  I took a good long hot shower for the first time in days.  By that time the drugs had really started to take effect.  I could feel the warmth of the water, but none of the wetness if that makes sense to anyone.  I took the time to test out the left shoulder.  Even under the influence, nothing cooperated.  It was just a grinding sound coming from that general area and I smartly decided not to push it further.

The interview with Sargent Blount the next day was at best awkward. The precinct was like most government facilities: dusty, dented and in dire need of updating.  Desks were early 70s vintage.  CRT monitors abound.  Here and there pieces of technology my tax dollars probably paid for pierced the ugly government facade my father’s tax dollars paid for decades earlier.

The moment I stepped through the door, every step felt heavier and heavier.  Earlier that morning I brushed off the incident.  “Self defense” I told myself.  Cut and dry.  The further into the police station I got, the less confident I felt about my case.  By the time I got to the interview room I was sure I’d get at least 10 years in prison.

Blount was there, along with an investigator who’s name I cant be bothered to remember.  It was either the pain killers or the fact I had a hard time looking him in the eyes that made him rather forgettable.  He and Blount could have been interchangeable.  Same pasty skin, same balding head, same well-worn uniform.  Probably 10 years Blount’s junior.

“We’ll keep this short,” Blount Jr. said as I tried not to shit my pants with anxiety.

In the end they were pretty glib about the whole thing.  To them, I was just another file to be locked away.  The deceased had a wrap sheet over a decade long.  Buying and selling crack, battery, grand theft, robbery.  Nothing warranting a death sentence, but still no angel. Shit happens in Detroit, and I was lucky to be walking out of both feet they said.  They handed me a copy of the report to look over and said four of the happiest words I’ve heard in my life.

“You’re free to go.”