There is a burgeoning market out there, real-estate! Companies are buying up homes left and right and offering shares of the value of their holdings to the people. If the properties appreciate you make money, if they depreciate you lose money.
Anyway, I thought it was a wonderful idea! Kudos to the person who came up with it. Now you can invest with as little as $5 in the real estate market whereas before you had to be able to purchase a home!
What happens to the homes after they are bought, I don’t know. I suspect they are either fixed up and sold for a profit (flipped), held for long time (rented) or scrapped and rebuilt as a McMansion and sold.
roght know its a buyers market not a sellers. :|
Wait for the RE market to crash, THEN it will be a buyers’ market. Right now it’s about dead-even.
roght know its a buyers market not a sellers. :|
Where i live houses are going for $30 000 more than the list price, with a tendancy to provoke bidding wars.
@cystic:
roght know its a buyers market not a sellers. :|
Where i live houses are going for $30 000 more than the list price, with a tendancy to provoke bidding wars.
okay mister canadian. in the us there is a down fall in the automobile and housing markets. stock market is arguably downfalling.
@cystic:
roght know its a buyers market not a sellers. :|
Where i live houses are going for $30 000 more than the list price, with a tendancy to provoke bidding wars.
okay mister canadian. in the us there is a down fall in the automobile and housing markets. stock market is arguably downfalling.
Is this related to that whole mortgage-screw-the-poor-scam thingy you guys ran into?
The stock market is a little volatile right now - i’ve been holding off on buying mutual funds for a few weeks until things calm down. I think this is related to oil prices.
What’s also interesting is the Canadian dollar is pretty close to par ($0.95), and the US unemployment rate is rising whereas ours is holding steady.
I expect to see some changes soon . . . the Canadian economy has been on fire, so interest rates have been slowly rising in order to prevent an exaggerated market expansion. This may soon have an effect on the housing market, but hopefully not to the degree that the US has seen. The US economy is sucking pretty badly right now, so the expectation is that interest rates will drop there in which case within a couple of years the housing market should start chugging along a little bit better . . . .
@cystic:
Is this related to that whole mortgage-screw-the-poor-scam thingy you guys ran into?
That’s exactly what it is in my area, People by the droves bought houses they couldn’t afford because the banks allowed it. Now they are for sale and frequently below apraised value for faster sale. At least in my area…
I’ve been told it’s a buyer’s market now.
Anyway, the concept isn’t to buy homes. It is to invest in companies that buy thousands to tens of thousands of homes all across the nation to average any market crashes with areas where markets sky rocket. These companies then pay you dividends which you can keep or reinvest. And we all know that real-estate will never be worth nothing. Gold may eventually have no value, USD or Can Dollars might be worth zero one day. Computers are worthless in a few years. But land will always have an intrinsic value, right? Well, assuming it doesn’t sink into the earth or the ocean! hehe.
But, in case you were wondering about those companies offering to purchase homes in any condition, that’s probably what they are doing. Buying lots of land and selling shares to stock holders. It’s like a bank for land instead of for money.
Dunno. I’m wavering on the idea. Right now I have some money in this because it is a buyers market, means I can get a nice return on the investment with almost no risk. When the market realizes that the land is still good, and prices rise, I might get out of it.
Real estate is a VERY local commodity.
In the Triangle area of NC, the housing market is still hot… not overheated, just moving along at a massive clip.
In Vegas, it is in freefall.
If I am going to invest in real estate, I want it to be REAL estate, and in a market that I have some knowledge of and control over.
Yea, kinda what has me hesitant. But if you look at the history of the United States, you’ll notice that real-estate keeps up with inflation usually and only did extremely better then inflation since Reagan took over for Carter. In other words, only very recently did it out pace inflation.
Which means it comes down to fund management…
Do you trust the fund managers to be able to outperform the “index” of real estate?
If not, then you would be best advised to invest in individual real estate holdings rather than purchase funds of real estate.
Also, in the current real estate market you better be planning long term investment in a fund that is well managed. Right now even some non-bubble markets are taking a massive beating, Atlanta being the largest non-bubble market that is having a massive real estate devaluation in progress. You need a fund manager who is GOOD and knows the long term trends in many markets, as well as individual and detailed info on what factors are effecting each local market.
For example, Cary NC (in the middle of the Triangle) is considered to be slightly over peak value, and many people are trying to get OUT of Cary due to massive local tax burden. Right next door in Apex, growth is so rapid that there are fears of overvaluation. While move out a couple of miles in the direction of Pittsboro, or move the other diretion toward Fuquay Varina, and land is considered under-valued, and with the planned I-540 expansion for the Southern Wake Expressway, land values in F-V and Willow Springs are clmbing, and not expected to peak for some time yet.
Would a fund manager on Wall Street have that level of knowledge about this one small area of one county in North Carolina that has a strong real-estate market? Or would he blinded purchase so that his fund included peaked growth areas like Wakefield?
And you would need the fund manager to have level of knowledge of EVERY market they invested in…
I just do not see it happening.
To be realistic, you’d have to assume that the funds would follow inflation. In other words, your money would be worth the same after investment as it was before investment. Maybe a slight variation either way, but I think the days of flipping homes for $60k over night are over. However, getting the equivalent of inflation is nearly 100 times what you’d get in a savings account for that money.
@ncscswitch:
Also, in the current real estate market you better be planning long term investment in a fund that is well managed. Right now even some non-bubble markets are taking a massive beating, Atlanta being the largest non-bubble market that is having a massive real estate devaluation in progress.
and the aunt who i live with decided to become a realestte agent 3 months ago. :roll: only sold 1 house and the fees cost here more than what she made on commission. i think ther is twice the number of house for sell than usual in the Atlanta area. that alot of houses.
However, getting the equivalent of inflation is nearly 100 times what you’d get in a savings account for that money.
Only if you are with one of the giant banks that is still paying only 0.25% interest, and if that is all you are getting that is your own fault (and even then it is 1/10th inflation, not 1/100th.)
ING Direct, Emmigrant Direct, HSBC Direct, etc. all are offering standard savings accounts (FDIC Insured) paying 5% +/- .5% depending on the current offer. The most recent high was 6% by ING. That is about double inflation on a zero risk savings account.
Or you can take another tack and go with a ROTH IRA and save with no tax liability on the earnings. That gets you an automatic 20% or so boost on effective earnings rate, and with good choices on your investments within the ROTH you can earn 4% to 10% yield.
Both are very simple investments, and both outpace inflation.
Yea, but the banks you are referring too, unless they changed their policies, require you to call them and request a check for the amount you want to withdraw. We’re talking 5-10 business days to get your money. Whereas the big banks, with branches, you can get your money same day. That’s why I use them.
Charter One
Chase
Harris
etc
And they are all offering between 0.15% and 0.85% depending on branch, day you open the account and amount you deposit.
I have a 7.00% savings account with H&R Block, but I have to wait 5-10 days to get my money and they only pay interest quarterly based on the amount on deposit on interest day. (aka not continuously compounded.)
That’s my reserve account, if anything happens in the market that actually, for the first time ever, makes me lose real money (aka money that wasn’t free, money I actually had to refrain from spending to invest) I have that account to buffer me.
And with inflation between 2-3% that’s a good thing.
But, if you want to get your feet wet in the real-estate market, without any real risk, maybe this is the way to go? I mean, obviously it is very good right now because homes are way under valued and are sitting on the market for prices well under what they sold last year and the year before. So we’re talking an almost instant return on investment maybe even multiple times over when the public realizes that they can make serious money here. (You’ll have to watch daily to know when to pull out, because it WILL crash in a correction again!)
I invested in Fidelity Real Estate Investors before the Russian Ruble collapse in 97-98. It fell 20+ % after the 30 + year before I bought.
I put in another $1000 and then the Thai Baht debacle sank that fund for another year.
Its years later and I sold it last year finally at a profit to pay for my wedding.
I still wanted Real estate, so I put in 40% of the prodeeds to Fidelity International Real Estate. Which has done well until this year.
