Archive for the ‘Real Estate’ Category

The Chinese Are Buying Up Real Estate and Businesses In Detroit

July 31st, 2013

detroit citySomething very strange is happening to Detroit.  Once upon a time, it was the center of American manufacturing and it hadthe highest per capita income in the United States.  But now the city is dying and the Chinese are moving in to pick up the pieces.  Read more…

Real Estate, World News

U.S. Real Estate: 2013′s Mortgage Trend

April 22nd, 2013

realestateWith the economy recovering from its recent downturn, and the spring season coming on, it’s no surprise that many people are curious as to their current prospects for buying a home. Read more…

Real Estate

Crime Pays… At Least if You Structure it as a REIT

April 22nd, 2013

jailA reasonable person might ask why a company whose main purpose is to house prisoners would want to be thought of as a real estate entity. It turns out the answer is quite simple. Life used to be easy for private Read more…

Real Estate

Housing on the Rebound: Is it Better to Rent or Buy?

April 16th, 2013

home pricesUnlike the stock market, which is setting at record highs, the housing market has yet to recover from the depths of the last recession. While real estate sales and prices are trending higher and are clearly better off than they were Read more…

Real Estate

Homebuilder Stocks Will Soar

April 15th, 2013

homebuildersDuring the housing bubble a few years ago, I editorialized repeatedly [Alex nailed it in 2006] that the whole affair was likely to end badly for speculators, mortgage companies and – not least of all – homebuilders. It wasn’t just Read more…

Real Estate

The Blackstone Group L.P. (BX): An Alternative Way To Profit From Higher Home Prices

February 18th, 2013

home pricesSasha Cekerevac: With the recent data over the past few months showing home prices continuing to rise, many investors might believe they’ve missed the boat. The homebuilder stocks have seen a substantial increase in corporate earnings, resulting from higher home prices Read more…

Real Estate

Why Bob Toll Is Wrong About Future of Home Prices (TOL, MPW)

December 21st, 2012

Keith Fitz-Gerald: Bob Toll, Executive Chairman of Toll Brothers, recently told Reuters that home prices are going to jump 20% in 2013 and another 25-30% in 2014. Read more…

Markets, Real Estate

PulteGroup, Inc. (NYSE:PHM): A Banner Year For Housing

November 16th, 2012

Sir John Templeton, perhaps the greatest contrarian investor of all time, once said: Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the Read more…

Real Estate

Why Home Depot Inc. (NYSE:HD) Stock Rallied While Homebuilders Fell

November 14th, 2012

Jeff Uscher: The Home Depot Inc. (NYSE:HD) reported third-quarter business results on Tuesday and its management cited improved housing demand for their solid sales and earnings growth, particularly in the U.S. market. Read more…

Markets, Real Estate

Peter Schiff: The Fed Wants To Inflate Housing

October 22nd, 2012

Jared Cummans: Renown and rather outspoken investor Peter Schiff has taken a shot at the Fed in his most recent statements, as he accuses them of trying to inflate the economy. To be specific, Schiff thinks that Bernanke and company want to inflate the housing bubble, Read more…

Commodities, Government, Precious Metals, Real Estate

U.S. ‘Prison Economy’ Secretly Grows

August 26th, 2012

Jeff Nielson: In writing “The U.S. Prison-Cell Economy” five months ago, I was speaking at least somewhat in metaphorical terms. However, as Bloomberg reveals Read more…

Economy, Government, Real Estate

ETFs And Allocations To Protect Portfolios In The Current Financial Storm

October 24th, 2011

This is a followup to a previous postings suggesting how investors can take refuge in the oncoming financial storm. If you’ve not done so already, be sure to read my previous post Say It Ain’t So for a description of our dismal macroeconomic Read more…

ETF, Real Estate, Uncategorized

ETFs Turn Exotic – Protect yourself

October 17th, 2011

Investments that do not move in tandem with U.S. stocks present opportunities for diversification and potential performance Read more…

Commodities, ETF, OPTIONS, Real Estate, Uncategorized

Your Best Real Estate Investment is a Moat

June 15th, 2011

Reporting from International Living’s “International Real Estate Investment Forum”

During recent flooding in the Midwest, an enterprising Arkansas man built a moat around his home and property to protect it from the floodwaters.

It worked. His house, possessions, and family remained safe.

Like that guy in Arkansas, says Ronan McMahon, Director of Pathfinder Real Estate, when it comes to our personal financial well-being, we need to think about safety – especially in today’s stormy economic environment.

Ronan – who borrowed the term from Warren Buffett – applies this concept of “moat economics” to every investment he makes. He told us all about it here at the Investment Forum in Toronto. When you’re buying real estate for investment, he says, look for moats – barriers to entry that keep the competition low and boost your potential for profit.

Ronan, an international real estate investment advisor, spends most of his time traveling around the world looking for the best real estate investment deals out there. One of his strategies is to follow the emerging middle class. That’s why, despite falling home prices, he’s not investing in the US these days. The US middle class is struggling. And there are other, bigger problems, too – with no solutions in sight.

But there are many other markets – far more attractive markets, both economically and physically – where we should be investing. Markets with moats. Fortunately, Ronan and his team have done the hard work. He and his top lieutenant, Margaret Summerfield, find projects with huge profit potential at an early stage…when capital is critical and developers are willing to extend massive discounts to investors.

The developer knows that Pathfinder can bring in a number of investors. And this gives Pathfinder a big negotiating advantage. The strength of their group buying power allows them to negotiate price reductions and terms that usually aren’t available to the general public.

But Pathfinder won’t work with just any real estate developer. They only pick those with a solid track record and who are on a solid path to profit. Projects with economic moats… in markets or situations where it is difficult for competitors to gain entry…and sales and margins are protected.

As Margaret explained, “We have great leverage – we don’t work with every project out there, maybe only one in ten – in some projects we’ve sold 80% of their inventory so we have great leverage when it comes to pricing.”

By my count, today at the International Real Estate Investment Forum we learned of a dozen opportunities with big ROI potential…some through capital appreciation, others through rental income, many with both.

Talk about building an economic moat – there’s one around the entire country of Brazil. As Margaret explains:

We like the big picture in Brazil. Just look at these facts:

Brazil is energy-independent. Petrobras just announced another 350 million barrel find of high-quality crude, in a field that contains as much as 80 billion barrels of oil. Brazil is #12 in the world for oil production. Brazil is also one of the top ethanol producers, including sugarcane ethanol to fuel cars. Around 90% of new cars made in Brazil in 2010 were flex-fuel, able to run on any mix of gasoline or ethanol. Meanwhile, 80% of the country’s electricity comes from renewable sources (mainly hydropower).

It’s rich in mineral reserves…including iron ore, bauxite, tin and copper. It has huge reserves of fresh water…12% of the world’s reserves, in fact. It has vast tracts of agricultural land…and 25% more untapped agricultural land than the entire crop acreage of the US. It produces 80% of the world’s orange juice, and is the top soybean exporter.

Brazil’s strong manufacturing sector produces cars, cement, electronics, steel, and petrochemicals, and commercial aircraft. Brazil even has a satellite-launching center.

Brazil’s economy grew 7.5% in 2010. And that growing economy is growing the country’s middle classes. An estimated 35 million people joined the middle class between 2003 and 2009. More than half the country’s 190 million population now falls into the middle class bracket. By 2014, 20 million more Brazilians will become middle class.

Today, Brazil is the world’s #5 market for computers, books and music…#4 for cars and refrigerators…#3 for cell phones, TVs, soft drinks and cosmetics…

In short, Brazil’s new middle classes buy the same things we all buy when we have more money in our pockets. And that includes property…upgrading where we live to a better home in a nicer neighborhood, or buying a second home at the beach. Brazil’s middle classes are driving Brazil’s real estate market…

So invest in the right projects in the right markets in Brazil and you could be sitting pretty indeed. Here is one to consider:

In a sweet little beach town with miles of white-sand beaches – just 30 minutes from Brazil’s #1 domestic tourism destination – you can buy a beach lot in a residential community next to a new super-luxurious five-star resort. It’s expected that lot prices will double in the next three years. Listen in to the conference recordings and learn how you can get a big discount (and a low price not available anywhere else) and become an owner here. And the terms Ronan and Margaret have negotiated: No money down and interest-free payments for just two years…

There were other deals in Brazil. I sat through two workshops this afternoon given by Brazilian real estate experts. They both brought four extraordinary deals with top-dollar profit potential.

Closer to home in Costa Rica, Margaret showcased three areas of the country that are overlooked and under-priced. One on the Pacific side, one on the Caribbean side and one in a lush, green tropical mountain lake area (think Lake Tahoe without the people). Lake- and jungle-view lots start at just $19,000 and can be financed over three years, interest-free.


Susan Haskins,
for The Daily Reckoning

Your Best Real Estate Investment is a Moat originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.

Read more here:
Your Best Real Estate Investment is a Moat

The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Real Estate, Uncategorized

Life in the So-Called Recovery

June 14th, 2011

“What Recovery?” Time Magazine finally got around to asking in its latest issue.

Better late than never, we suppose. The Daily Reckoning has been asking that question for months already…

“America’s recent economic ‘recovery is just a dismal version of ‘Mother May I,’” quipped Dan Amoss, editor of the Strategic Short Report in his essay “Inflation 1; Economy 0” in early March. “Almost every ‘one step forward’ will succumb to ‘two steps backward.’”

Two weeks later, we reiterated, “America’s economic recovery contains more cracks than Humpty Dumpty…after suffering his ‘great fall.’ Somehow, all of Bernanke’s horses and men managed to slather enough monetary glue onto the fractured pieces of our economy to hold them all together. But the reconstructed economy does not look very much like the original one. Humpty Dumpty is now a Picasso.

“While it’s true that a few ‘headline’ economic numbers – like GDP growth and industrial production – are flashing signs of recovery, numerous other data points are flashing red. Net-net, this recovery is suspect.”

We wanted to see the recovery that everyone else claimed to see, we really did, but we were never able to make out its image, no matter how hard we squinted. Blame us for a lack of imagination.

Most of the folks on Wall Street insist they see plentiful signs of economic growth. But then, a lot of folks insist they see aliens out their windows…or the Virgin Mary in their grilled cheese sandwiches.

Maybe the folks on Wall Street are right. Maybe a recovery is unfolding right below our noses. But to us, the “green shoots” of recovery look suspiciously like the AstroTurf of desperate governmental stimulus efforts. From a distance, the stuff looks like the real deal…or even better. But up close, you find a fake – a parody of economic vitality that will never grow into anything real or self-sustaining. Even worse, the AstroTurf also smothers the soil that could potentially yield productive enterprises.

As a result, the so-called recovery is producing a wide range of severely recessionary phenomena. For starters, according to a recent CNN poll, a whopping 48% of Americans surveyed believe that a 1930s-style depression is “very likely” or “somewhat likely.” That’s the highest reading since the beginning of the 2008 credit crisis.

Aren’t folks supposed to become more confident during recoveries? What’s the problem?

We don’t know precisely, but we can surmise imprecisely. A lot of stuff is broken. Jobs are hard to come by, debts are difficult to repay and household wealth is extremely difficult to regain.

Meanwhile, the US government’s mushrooming debt burden is scaring the bejeepers out of any American with a 5th grade aptitude for arithmetic. According to the latest figures, every American has become a kind of fiscal pack mule – saddled down with nearly half a million dollars of present and future government liabilities.

Those distant liabilities wouldn’t seem so troubling if they did not feel so immediate. But virtually all of America’s wealth-creation trends are moving in the wrong direction: taxes are rising, per capita incomes are slipping, inflation is rising and homeowners’ equity is collapsing.

Estimated Total Value of America's Residential Real Estate

Since the peak of the housing bubble in early 2006, homeowners’ equity has collapsed from $14.7 trillion to $6.9 trillion – a staggering loss of wealth equal to more than half of US GDP.  In fact, homeowners’ equity is even lower today than it was at the end of 1999!

Not surprisingly, a very close correlation exists between the amount of equity Americans have in their homes and the attitudes of Americans toward the economy. You could say these two data series move tick for tick.

Percentage of Americans Who Feel Good About the Economy vs. Americans' Home Equity

But real estate wealth is not the only disappearing act of the last decade. American households have also lost about $2 trillion of stock market wealth during the last five years.

These aren’t pretty numbers. Very few households are better off today than they were five years ago…or even ten years ago. Many are worse off. This bad news might not feel so bad if the US economy were producing a steady stream of good news. But it isn’t.

To the contrary, the federal government continues to spend the money that no one seems to have, while Ben Bernanke prints the dollars that fewer and fewer people seem to want. When and how this perverse merry-go-round will end no one knows, but it might be a good idea to jump off your pony as soon as possible and find a safer carnival ride…like precious metals or foreign real estate or water (as Chris Mayer explains in his essay “Blue Gold…Still Shining”) or, indeed, any other asset that isn’t a dollar bill or a promise to re-pay a dollar bill at some future date.

“There are already elements of [economic] fragility,” said New York University professor Nouriel Roubini in a weekend interview. “Everybody’s kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest… We’re still running over a trillion-dollar budget deficit [in the US] this year, next year and most likely in 2013. The risk is at some point, the bond market vigilantes are going to wake up in the US, like they did in Europe, pushing interest rates higher and crowding out the recovery.”

What recovery?

Eric Fry
for The Daily Reckoning

Life in the So-Called Recovery originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.

Read more here:
Life in the So-Called Recovery

The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Real Estate, Uncategorized

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