My flood experiences, and can't time the market thoughts

Wow, now that I’m not spending half my energy on a pointless legal exercise, there’s actually a lot going on in the world, with it evenly split between greatly benefiting me and greatly possibly harming me.

But first things first - 

If anyone is looking for a good podcast, the New Yorker has done 3 seasons of an investigative nature where they dig deep and exhaustively into some case or situation.  It’s called In The Dark, and while I’ve only finished the 14 part season 2, and now listening to season 1, I can recommend it.  As a student of history, especially Civil War history, reconstruction, Jim Crow eras the Civil rights moments, the ingrained racism in every fabric of that southern culture is always astounding.  In season 2, you see how even simple justice is denied through an institutional racism that has no fear of consequences.  I’m sure not everyone and their mom drives as much as I do, but it’s a good listen and the time and energy and I guess budget that went into the show is mind-boogling.

And I came across this - 21 Travel Books - that looks really like a good curated list of books, fiction and non-fiction, about traveling.

With the 2nd hurricane bearing down on the Gulf Coast of Florida, my St. Petersburg investment of a top floor condo in a new building is under a pressure.  I didn’t buy it yet but have a large deposit down and have been waiting to close for like literally 3.5 years - it’s a new building just finished, but for some reason I still haven’t closed and haven’t got a lot of information about why.

My risk I don’t think is not flooding or wind - in fact, my new building should flex in the face of this storm, but the risk that is apparent would be a general avoidance of Florida in general trend.   Luckily, I got in early, at a good price, so while I was kicking myself for not spending another $100k or 2 to get lake and ocean views (and get that appreciation that has far outpaced my west facing unit), I’m now happy to have gotten in at the lowest possible price, the same thinking I had 3 years ago.  

Money and making money and investing money is always a real mind f$ck - you always have FOMO about what you didn’t do or what someone else did, and you are always second guessing your timing - many times rightfully so.

For instance, I sold a bayfront Miami condo in March 2020, just before the Covid influx occurred, so probably lost out on $125k if I would have timed it perfectly like a year later.  But at the same time, as many of you know, layered over the Covid boom times was the Surfside collapse and new Florida condo laws that resulted in maintenance fees skyrocketing, and large one time assessments in the hundreds of thousands of dollars per owner in order to properly fund improvement reserves.  Now the Florida condo market is in distress, especially among older buildings where buying into one is like buying a time share, but worse, since you never know what type of special assessment is coming down the line.  So that one is sort of a wash, although selling it was part of a larger effort at concentrating my efforts and investments, narrowing my focus, and that has resulted in a tremendous financial upside as a lack of debt compounded gains.

So, the destruction of the Gulf Coast of Florida is a bummer for sure, and poorly timed for sure, and feels undeserved for sure to all involved, but one thing for sure, because I don’t have leverage, whatever will occur will be much easier to navigate and work my way through because of the lack of debt on the property.  There’s lots of stories about leverage, and my journey has been fueled by leverage, but I didn’t really start accumulating real wealth until I made it a point of using less leverage.  I mean, that’s not really the right way to say it - when the leverage produced free cash flow and ultimately profits, I used the cash flow and profits to pay down debt and not accumulate more leveraged assets, and that resulted in more cash and more assets in a more sustainable fashion.

Speaking of fashion...

I can’t say my forays into Florida real estate have been hassle free, that’s for sure.  And I’m always amazed at the continued rush to buy build and speculate down there, when everyone knows it a bit of a ticking time bomb.  Nothing will bring that home more than like a 5 year period of hurricanes that doesn’t spare any corner of the State.

The thing about floods and rain and wind is you can see the devastation a decade after - an abandoned house, a bunch of downed trees, the carved discolored sides of a receded river.  It’s expensive to clean up, and sometimes, it just stays the way it is.

Can’t say I’m that impressed with the federal government response, or at least how they are communicating it - seems like a perfect opportunity to show leadership, to show how Americans come together, to show that human spirit of helping a neighbor - the trending TikTok videos of 75 Walmart tractor trailers convoying down to NC was just the type of human story a good politician should latch onto like a spur on a hike pant leg.

Helene just sort of came out of nowhere.  But this new one, Milton, it’s pressing down with lots of notice, which always reminds me of one of my favorite movies, The Curious Case of Benjamin Button, where Brad Pitt’s character ages backwards and the movie is overshadowed by the approach of Katrina. Since I wrote this this morning, the hurricane has increased in strength in dramatic fashion.

This Phoenixville house above was raised 8' after the storm.

Katrina’s a good case in point - when I was there in 2015 and took a long bike ride through the 9th Ward, there was a lot of evidence of the flood, which was what, 2005?And I just returned from Phoenixville where I own 4 single family residences which saw some serious flooding from Ida in 2021 - and lots of homes that were flooded are still vacant, and I guess the first wave of FEMA money for tear-downs and federal buyouts came through, since there were at least 6 houses torn down with nothing but iron piping from the well hinting at the lives lived there previously.

The flood was serious, putting 8' of water into this gigantic basement of this home, coming within 3" of seeping into the first floor, which would have been a disaster. Bad enough as it was.

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What is looks like not flooded.

My tenant being rescued.

Playing with real estate is often a heartbreaker - so many things can interfere with the best laid plans of real estate enjoyment.