0
0

Real Estate A Good Investment - Elsewhere!


 invite response                
2007 May 24, 9:08am   15,109 views  129 comments

by Patrick   ➕follow (59)   💰tip   ignore  

Ponzi

Dear Patrick,

I enjoyed your housing crash article. It made me feel very good about renting in NY at rent stabilized prices since 1993 and having used the savings to invest in American commercial property, residential property Latvia, Bulgaria and Panama. I have never actually lived in a house I owned and think Robert Shiller's housing puts are a great investment.

I think you were not quite explicit about your principle point: that the US housing market has become a Ponzi style casino in which the commission grabbing mortgage bankers and Wall Street are the house and the retail buyers the naive punters. And anyone who doesn't count his cards and get out in time loses.

Real estate can be a great investment, if you:

1. Invest without emotion and at or below replacement cost, as in Latvia in 1998.

2. Buy where others are too scared because of perceived risk, as in Eastern Europe 5-10 years ago.

3. Buy where prices are the same as 23 years ago, like in Tokyo now.

4. Buy where the rental yield far exceeds bond returns, like in Tokyo now.

5. Buy in growing, cheap resort areas where the yields are close to or in double digits, like in Bulgaria, Turkey or Malaysia now. Beach apts in Malaysia can be bought for 500 euros/m2 with yields of 8-10%. Real estate taxes per year in Bulgaria cost less than dinner at a good restaurant in
Riga.

6. Buy where rapid construction cost inflation + the introduction of a mass mortgage demand will juice demand, as Rumania, Turkey or Bulgaria.

7. Buy in small stable countries with no income tax and good financial services and legal systems right next door to big, disorganized corrupt countries with lots of money to launder, like the Baltic States from 1995-2005 and Panama, Singapore, Turks & Caicos and Malaysia now (next door to Colombia/Venezuela, Indonesia/China). Buy in condotels with in-house rental management companies, so your rental revenue is at per day hotel rates instead of by the month, while the per square meter purchase price is at a normal local market rate.

8. Buy REITs with good yields (Singapore, Japan, Eastern Europe) in fast growing markets and leave the work to Cohen & Steers or the REITs' managers.

9. Invest in areas where EU infrastructure funds are producing wage and construction material inflation and raising replacement costs by double digits per year while the overall CPI is 2-5%.

10. Invest with my brother in the Baltics. My brother's fund is Baltic Realty Partners. His first fund was Latvia Realty Fund (www.latviarealty.com).

Best from sunny Riga and

Kind regards,

Lester G

#housing

« First        Comments 122 - 129 of 129        Search these comments

122   FormerAptBroker   2007 May 29, 2:57am  

Lake Tahoe Renter Says:

> Just dropping in to say hello, and to say thanks
> again for the informative website.

Glad to have someone from Tahoe on board…

> I am a renter in a very nice neighborhood on the
> South Shore…

Tahoe Keys?

> many of my friends would tell me I should beg borrow
> and steal to get into a house before you get priced out.

I don’t know how long you have lived in Tahoe, but when things slow down in the Bay Area they really slow down in Tahoe. Back in 1996 I knew a realtor (one lady not a firm) that had almost 200 listings with almost 100 under $100K…

> I’m looking forward to prices dropping at least another
> 20 percent and so I can say I TOLD YOU SO.

They will drop way more than 20% in the Tahoe basin before this is over…

> The West Shore is defiantly more desirable than South Lake
> Tahoe, it cracks me up, one time a gentlemen from the
> West Shore actually told me that people from South Lake
> Tahoe are of another breed.

When I was a kid growing up on the Peninsula many of my neighbors had family places on the West Shore that had been in the family for years (and cool pre-war Rivas, Chris-Crafts and Hackers that had never been in any lake except Tahoe). Back then the South Shore was mainly full time residents and rental cabins. As prices on the West Shore (and other prime areas like Sugar Bowl, Squaw Valley, Glenbrook and Lakeshore Blvd. in Incline Village) have gone up a lot more Bay Area people are buying in South Shore (and forcing lots of former full time residents over the hill to Carson City).

123   Peter P   2007 May 29, 3:56am  

Is this the slowest thread ever?

124   DinOR   2007 May 29, 4:04am  

If you get the chance check out the KGW link Patrick provided! Hysterical story of a total idiot going into default on his Oregon home and letting three PIGS live inside! Well I guess that's one way to deal with a default!

It's actually only a few miles from here so I may go check it out? No, I don't think so, I get the idea. This guy is crazy.

125   Randy H   2007 May 29, 4:23am  

New thread Real Estate Roller Coaster

126   sfbubblebuyer   2007 May 29, 4:35am  

“knows why carbon matters”

Huh? Because silicon steak would taste funny?

It's because of bonding. Silicon can form 4 bonds, but it can't do double or triple bonding easily. I'm pretty sure the triple bond hasn't been discovered outside of some esoteric laboratory reactions. Anyway, the bond angles are very important in the three different types of bonds as they are what give protiens/DNA/RNA a large part of their shape, and the shape of a protien in its active areas is critical. (As are the charges, but carbon doesn't directly affect that.)

When you cook a steak, you break a lot of carbon bonds apart, forming different molecule shapes (and occasionally different molecules as larger ones break apart) which tastebuds on your tongue and, more importantly, scent receptors in your nose can tell apart. Replacing carbon with silicon in a steak (assuming you could) would result in an mostly tasteless steak as you wouldn't be forming many molecules that your taste or smell could detect. Mostly it would taste like oil or butter or whatever you tried to cook it in.

I don't even want to go into how unhappy you'd be several hours after you ate it.

127   sfbubblebuyer   2007 May 29, 4:39am  

Also, Randy, I have a MS in Biophysics and a BS in Comp Sci. scrubbo at that gmail dot com place would reach me.

128   astrid   2007 May 29, 7:34am  

SFBB,

I vaguely remembered that carbon was superior to silicon, though I forgot how. 10th grade Chemistry (taught by a man name Formulak) was a long time ago and I don't remember much of it, except being pissed off that he didn't let us burn magnesium ribbons.

129   astrid   2007 May 29, 7:35am  

SFBB,

I vaguely remembered that carbon was superior to silicon, though I forgot how. 10th grade Chemistry (taught by a man name Formulak) was a long time ago and I don't remember much of it, except being pissed off that the teacher didn't let us burn magnesium ribbons.

« First        Comments 122 - 129 of 129        Search these comments

Please register to comment:

api   best comments   contact   latest images   memes   one year ago   random   suggestions