Like any area of investing, you have to have worked in it enough to understand what combination of factors are important. There are a few points in the article that are very significant. After morning trading I provide on demand construction office administration. I get the construction material supplier's price increase notices and I've seen 3 10% increases this year---Yes 30% annually. Just as Barrack states. He's made his money so sounding any alarms won't dent his fortunes. I used to travel all around the country networking with real estate investors and flipping RE. Nobody makes it big without help from others and maybe its his way of expressing gratitude, sharing what he knows. And, there are alot of very successful RE investors you will never hear about-- ever hear of asset protection strategies, trusts, LLCs ?
I think the real estate markets going to burst after what my friend told me last night. He told me that his sister just bought a house in Tennessee, and he bought one in Florida during summer. They have never live there, probably a week or two during vacation. They been living in NYC their whole life, and both single, and earn less than 50k/year each. The houses cost 300k+ and 400k+, fee not included. They don't know anything about real estate, and they don't have a damn clue about suppy and demand, and he told me he bought it as an investment. Good luck to him.
Hey FX - great post. You are absolutely right (again!!) about Barrack's performance not being that special. The whole thing about picking undervalued properties and then adding value and flipping them - I mean, it doesn't take that much skill! Anyone could do it if they had the capital, right?!! I don't think it matters that he has returned xx % to his investors over the years - after all, as you said, there are so many people out there who have done much much better than him. And you are so right about these real-estate moguls and their tendency to let cash burn a hole in their pocket. They are notorious for that kind of thing. Kind of makes you wonder how these guys ever made a penny in the first place!! Not one of them is willing to put the money out there and take a real chance, right? And you are so right about Barrack being half-crazed - the guy is obviously on the edge and about to topple over. Why on earth would he go public with his position at a time like this? Kind of makes you wonder, doesn't it? Anyway, you're right on the money as usual. Have a good week trading.
yeah, it's pretty tough for "real estate moguls" to make 20% a year since 1990 seeings that real estate value has gone up 300% to 400% in a lot of areas since then. the question is, how did they LOSE the other 380%? don't bother answering. I'm not interested. at your trading sophistication level, here's the perfect thing to keep you busy for the week. fx
I wife's friend (natural blond) got her RE license about a year ago, in May 2005 purchased 4 unit condo as an investment. She works in XXXX21 office in LA. About a month ago she said that there are so many properties on the market now so she'll wait when they are sold and then she will sell hers. She said in LA RE goes up on average 100K per year. (she bought hers for 700K) I asked her that in 1998 her house cost $0 and you'd get a 100K bonus? Still no answer.
Nov.: Back when the Berlin Wall fell in the late "80s and the world began to open up economically, the hope was that someday the developing economies would advance into consuming economies. While this is still work in progress, it is also exciting to see how much fruit is already on the tree! We cannot remember another recovery in the postwar era when so many previously insignificant players (China, Pac Rim, India, Mexico) were such a large part of the global recovery. Perhaps rather than wringing our hands over whether the U.S. consumer is about to perish, we should be smelling the roses and relishing just how far the world has come in diversifying contributions to global economic growth. Perhaps a U.S. economic slowdown is not nearly as important for investors and businesses in a global economic recovery that is no longer so highly reliant on just U.S. growth? We think people are currently underestimating how strong, diverse and sustainable the contemporary global economic recovery may prove to be. Not only are parts of the world currently exhibiting strong economic growth which will likely persist next year (China), but other parts (Europe and Japan) appear poised to experience even faster growth in the coming year. Perhaps, at some point in this recovery, ongoing global growth will be considered a cure for a U.S. economic cough.
Hi FX ummm... geez, I must be dumber than I thought. If you had $1000 in 1990 and you returned 20% per year on it every year until this year, you would have... let's see... wouldn't that be something like $15,000?? So if the same $1000 was invested in R.E. and grew 300-400% as you suggested, wouldn't that be.... $3000 or $4000?? You know, I must not have eaten my wheaties this morning, because I just can't follow your reasoning here. But then that is no surprise; it's not like I expect to understand your thought processes. Can you help me out and explain this to me? If the general market went up 400% in 15 years, how did he lose 380% to the field if he returned 20% per year?
Speaking of idiots, that's a 1,750% return moron. Geez, the amount of people talking out their ass here is amazing.
my aunt bought some property mid-Wilshire Los Angeles area 65-years ago for $10,000. worth $20,000,000 today. hey, ain't that a little better than 20%yr?? not to mention the $millions she made super-compounding interest (on rent she collected on the apartment building she built on the property) in a simple 15%-interest bearing bank account. *busts up laughing* fx