🤝 The Lake Tahoe Legend

TGIF. This is the Shake 🤝 The free 5-minute newsletter that explodes bits of information to you every Friday (kinda like opening up a Nature Valley bar in your house).

Here’s what we've got for you this week:

• The Grand Old Man of Lake Tahoe 🏔️ 

• 1k Giveaway 🎁 

• IG Investor Ego Check… No 🧢 

MARKET RADAR

THE GRAND OLD MAN OF LAKE TAHOE 

Other than the horrific traffic, Lake Tahoe is truly one-of-a-kind and home to some of the most sought-after real estate on the west coast. The crystal clear blue water, endless slopes, and mystique landscape lure in over 15 million tourists per year.

But it wasn’t always like this 👇️ 

Up until the early 1900s, the Tahoe basin was practically isolated and only used for lumber, mining, and transportation of goods.

All it took was a suddenly closed business in order for one man to bet on turning Tahoe into the fan-favorite attraction it is today.

That man was Duane L. Bliss.

Flashback to the 1870s: Bliss initially bought land in east Tahoe for his lumber business (not for the black diamond slopes ⛷️ ). He was a banker turned lumber magnate, running the Carson and Tahoe Lumber and Fluming Company - and made a pretty penny doing so 🤑 

From 1859 through the 1890s the Comstock mines produced $400 million in silver and gold wealth. Another $100 million was also generated from timber sales.

FYI: lumber was heavily relied on during the Comstock era in order to construct the supporting structures for the mines and the buildings above them.

Eventually, C&TL&FC (abbreviation game 💯 ) would own or lease between 50,000 and 80,000 acres of timberland in the Tahoe basin and in five counties in Nevada and California, employing an estimated 3,000 people during the lumbering season. The business was BOOMING 💥 

To put it in perspective, the total production of ore extracted and milled in the Comstock District from 1860 to 1880 was 6,971,641 tons 🤯 

Then suddenly in 1880, the Comstock “bonanza period” went bust, and the need for lumber practically evaporated overnight. Soon thereafter, the Bliss family found themselves with a lot of bare mountainsides and no steady source of income.

Towns once filled with workers suddenly became abandoned… but there was a smidgen of hope - that pristine blue lake.

Back then, transportation to Tahoe was very limited (making it unattractive), and Bliss knew he had to build out the infrastructure to make it feasible to become a tourist destination.

So the Bliss family bought land across the lake and opened the luxurious Tahoe Tavern near Tahoe City, complete with a railroad 🚂 to bring tourists down from Truckee and a fleet of steamships 🚢 to carry them across the water.

They also transformed the former lumbering community of Glenbrook into another resort, opening the Glenbrook Inn in 1907.

Even though it was still primitive, this shift in infrastructure sparked national and even international tourism to the once-isolated area.

Unfortunately, the same year after opening the Glenbrook Inn, Duane Bliss passed away. He had become popularly known in Lake Tahoe basin communities as “The Grand Old Man of Lake Tahoe.”

By the 1920s, the Bliss family only owned about 26,000 ft of shoreline. I say ONLY because they sold most of their holdings across the lake to multimillionaire George Whittell and donated more than 700 acres to the California State Park System.

In the 1970s, The Bliss heirs closed the Glenbrook Inn and sold or donated all but 10 of their remaining 3,300 acres.

(“Why don’t you just sell and enjoy the money?”- is what I tell my prospective sellers when they want to hold and pass their properties down through generations.)

Today, Glenbrook is home to multi-million dollar houses and the 700+ acres initially donated is known as D.L. Bliss State Park. What a legend.

Now back to sitting in traffic on the way home to the Bay Area. Thx Tahoe 👋 

1000 SUBSCRIBER GIVEAWAY 🎁 

The Shake 🤝 is about to hit 1k subscribers! To celebrate, we are picking one lucky winner to receive a self-cleaning LARQ Bottle.

Complete our short form below to qualify! 👇️ 

IG INVESTOR EGO CHECK… NO 🧢   

People will find a way to take to social media to brag about damn near everything, and one of the newest trends is bragging about being a big swinging d- of real estate investing. It’s starting to get out of hand, fast.

Let’s start with residential real estate investors. What started out as a very humble community, almost a secret society of sorts posting on the forums of BiggerPockets.com has now become a TikTok and Instagram hustle show of how many units they own.

Today, a lot of these investors are learning the hard way that having 72397742 doors doesn’t actually mean that you’re crushing the game, and any of them that were banking on appreciation aren’t necessarily seeing it, because they bought when values were super inflated… but don’t worry, if their investments do appreciate in value, they’ll hop back on IG to tell you all about it:

Now, onto the commercial corner.

You would think the commercial real estate investor would be more savvy, right? Not necessarily. The commercial side of the business isn’t always as sophisticated as we think it is.

I want to give an extremely simple definition for those who aren’t in the CRE world every day because the rest of this rant is going to make a helluva lot more sense if you understand this term that’s so often thrown around…

A CAP 🧢 rate is a way to measure how much income a property generates compared to how much it's worth.

Here's a simple example: Let's say you have a property that costs $1,000,000 and it generates $100,000 in annual net income. To calculate the CAP rate, you would divide the income ($100,000) by the value of the property ($1,000,000) and get 0.1, or 10%.

So, in this case, the CAP rate is 10%. This means that for every dollar you invest in the property, you can expect to earn 10 cents in income.

Generally speaking, a higher CAP rate means the property generates more income compared to its value, which can be a good thing for investors. But it's important to keep in mind that CAP rates aren't the only factor to consider when evaluating a property investment, and there may be other factors that impact its potential profitability.

Given this, imagine being a jabroni who is investing in a 3.75% cap deal right now…

Sure, Treasury yields (return on a government bond) haven't been this high in over a decade, ​​but who needs decent returns on their investments when they can have the warm and fuzzy feeling of owning a piece of Americana? 🏡 

Landlords can revel in the joy of collecting rent on a triple net lease property, even if the cap rate is barely enough to cover the cost of a latte at Starbucks.

I’m not suggesting that every investor is buying bad deals right now, but many brokers aren’t doing the market any favors by having severely low CAP deals on the market as well.

It’s going to be really interesting to watch where money moves over the next 6/12/18 months 👀 

Signing off 🤝 If you enjoyed this week's edition, don’t be selfish — share The Shake with a friend!

^{DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.}