Happy Friday. This is The Shake 🤝 : the weekly newsletter that doesn’t take real estate too seriously. For example: what did one wall say to the other wall?

…Meet you at the corner.

Here’s what we're riddling up this week:

• Hooverville History ⛺️ 

• How to Turn 3 into 17, Real Estate Style 💰️ 

• Weekly Giveaway 🎰 

MARKET RADAR

HOOVERVILLE HISTORY ⛺️ 

Central Park is home to some of the most expensive real estate in the world. 

You can go for a nice stroll by billionaire’s row 👆️ and get a bit of inspiration to #grindharder.

But rewind to almost a century ago and this prime area was devastated by the Great Depression. What is now known as the Great Lawn was once a shantytown built by the homeless - nicknamed Hoovervilles.

From 1929 to 1939, thousands of these Hoovervilles were erected across the United States - no permits or rezones were necessary, making development a breeze.

They were named after President Herbert Hoover, who was widely criticized for his handling of the economic crisis.

The Hoovervilles were crowded, unsanitary, and lacked basic amenities such as running water, electricity, and sanitation facilities - at least there wasn’t an HOA.

Many of the people who lived in these shantytowns were migrant workers, farmers, and other blue-collar folks who had lost their livelihoods due to the depression.

By 1932, one-third of workers in NYC (~640,000 people) were unemployed, forced to make ends meet. And to make matters worse, over 15 million Americans across the nation were out of work.

Resembling the tent cities we see today in places like San Francisco, the wealthy continued to live only a stone’s throw away in the surrounding buildings - encapsulating the deep contrast between a white-collar vs blue-collar life.

In Chicago, Hoovervilles sprang up in places like Grant Park and the area around the Union Stock Yards. In Los Angeles, Hoovervilles were located in places like Griffith Park and the banks of the Los Angeles River.

At their peak, there were hundreds of thousands of people living in these makeshift settlements across the United States. Making it one of the harshest living conditions for the masses in US history.

Eventually, President Franklin D. Roosevelt was elected and implemented the New Deal policies to provide relief and recovery programs for the unemployed and homeless.

This helped the economy slowly begin to improve, and by 1940, many people were able to find work again in order to move out of Hoovervilles and into more stable housing.

According to the latest HUD data, there are an estimated ~582,462 people experiencing homelessness on any given night in the United States today.

Most live in tent cities that serve as today’s version of a Hooverville.

Clearly, homelessness remains a significant challenge in the United States.

Re-Defining The Word “Triplex”

We don’t mention enough in these newsletters that we aren’t just writers, but we’re commercial real estate brokers and real estate investors as well.

Just like many of you, we’re working in the industry every day while looking for ways to put our money to work.

A mentor of mine once told me “When it comes to real estate; you earn a living selling it, but you build your freedom owning it”.

Needless to say, real estate is always on our brains, no matter where we are!

This week, for instance, we’re both in markets that we don’t live in but we’re still hunting deals… which leads me to an extremely frustrating opportunity that I just missed out on; 42 Gulf Blvd, Indian Rocks Beach, FL. This property is now under contract after being listed at over an eleven cap!

As far as STR laws go, Florida is generally considered a "short-term rental friendly" state.

Florida has a large and well-established vacation rental market, particularly in popular tourist destinations such as Orlando, Miami, and the Florida Keys. The state has relatively few restrictions on short-term rentals, and many local governments have passed ordinances specifically allowing and regulating vacation rentals.

However, it's worth noting that there have been some recent changes to Florida's short-term rental laws that may impact the vacation rental market.

In 2021, the state passed a law that prohibits local governments from banning vacation rentals outright but allows them to regulate aspects such as noise, parking, and occupancy limits. This means that the rules and regulations for short-term rentals may vary by location and may be subject to change.

Indian Rocks Beach, a “touristy” town West of Clearwater, FL has next to no STR regulations. This opened the door for the seller of 42 Gulf to be extremely creative.

My spidey senses started going on this one early when I saw the listing’s photos online. At first look, it’s just 3 separate buildings, right?

Not even remotely right, my guy. Check out this zoomed-in picture of the thiccc parking lot this property has:

Turns out this bad boy is operating as seventeen units!! I couldn’t believe it when I walked up and saw this property in person with my own eyes. The parking lot alone here is what was the dead giveaway. First, it was its sheer size, but then it was also numbered!

With over $231,000 in gross rental income in the last 12 months, this property is a steal at the reduced listing price of $1.6 million.

This is where this gets absolutely nuts: Zoned as a triplex, this means that someone can purchase this property with a residential Fannie/Freddie loan. That is absolutely f–ing bananas.

This means that as long as the buyer purchases this property with the intention of “living in it” initially, they could get a conventional FHA 30-year mortgage with an extremely low down payment. This is an absolute hack.

Let’s run some dummy numbers here at 5% down assuming a 6.5% interest rate. Remember, this property kicks off almost $15,000 in net income per month.

The fact that you could buy this property with only 5% down and a cash flow of almost $4,500 per month is insane to me. Just missed this one, but as you all know, it’s onto the next in this numbers game that is real estate investing.

WEEKLY GIVEAWAY 🎰 

Together With Closing Packs

To end each edition, we will be sending one lucky subscriber a special item!

This week’s item is a S’well Teakwood Shaker Set.

How do you win?

We are going to post a closed transaction with some high-level details and whoever can guess the right sale price, wins.

If nobody gets it right, the closest guess wins. If two people get it right (screw us right?!) we will hook you both up!

Let’s kick it off 👇️ 

This 2 bed / 1 bath condo has breathtaking views of San Francisco's beloved tents waterfront. Coming in at 1k sqft.

What do you think it sold for? 🤑 

FIN 🤝 If you enjoyed this week's edition, don’t be selfish — share 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.}