stuff said:
but its still better investment then realestate.
Sure?
From the latest issue of Fortune magazine:
"Americans are obsessed with real estate. The National Real Estate Investors Association had 44 chapters in 2002, now it has 170. Last year, 86 real estate investing books were published, nearly three times as many as in 1998. This summer the Learning Channel will air a show about real estate flipping. But the most telling sign may be the speculators. Mortgage lenders estimate that investors account for 10% of all buyers, double the historical rate. To find out what they're to, FORTUNE toured model homes and developments, attended seminars, and stood in condo lines in Los Angeles, Las Vegas, Phoenix, Austin, and Miami. "You're seeing people now for whom investing in real estate is their life," says Jay Butler, director of Arizona State University's Real Estate Center. "It's a move taken straight from the old day traders of the stock market."
---
A 22-year-old Las Vegas mortgage banker, Zareh is a quick study. At 18 he bought his first home for $126,000, watched it appreciate (he sold 2 1/2 years later for $369,000), and decided not to go to college. Since the Las Vegas market began to cool off last year, he has made more than 20 trips to Phoenix to scout, buy, and inspect houses. He bought eight houses with 10% down, a total investment of $150,000 including closing costs. To buy seven more, he entered into a limited partnership with his best friend's dad. In seven months, he estimates, the properties have appreciated $1 million. He plans to sell in the next two to three years. If the market collapses, it wouldn't be a disaster. "You just hold on till it comes right back up."
Robert Kiyosaki
California gave birth to the modern real estate speculator. So it is fitting that last month's Real Estate Wealth Expo (slogan: "One Weekend Can Make You a Millionaire") took place in Los Angeles. To appreciate how intense the real estate craze has become, you could have done a lot worse than visit the 46,000-people, two-day lovefest at the Los Angeles Convention Center, featuring the advice of Donald Trump, bestselling author of Rich Dad Poor Dad Robert Kiyosaki (right), motivational speaker Tony Robbins, and hip-hop impresario Russell Simmons. Imagine a late-night infomercial sprung bizarrely to life, with all the hucksters and viewers mingling in the same giant room, whipping one another into a get-rich-quick frenzy.
Debbie Smith and Jason Jones
The couple hosts monthly Investing Get-Togethers in Las Vegas. Three years ago, Smith and Jones, a former teacher and financial advisor, respectively, applied lessons learned from well-known real estate guru Robert Allen and boughtâonlineâfive Florida houses in pre-foreclosure, putting just $1,000 down on each. They lost money when the rents didn't cover the holding costs; then watched the values leap. By summer 2003 they moved from California to Las Vegas. Today they estimate that the 20 properties they own are worth about $8 million. If that's trueâand until they sell, no one really knowsâtheir total equity has grown to about $4 million. They plan to sell properties when they need cash and hold on to others to fund their retirement. "It's a risk," concedes Debbie, "but I really feel like it's a lot less risky than the stock market."
Stephen and Crystal Wong
Though their permanent residence is in San Francisco, the Wongs, who run a Home Instead Senior Care franchise, have already purchased 12 houses in Phoenix over the past 18 months. In that time, they say, those properties have appreciated 47%, to $2.4 million. They are starting to sell a few of their single-family homes in Phoenix and roll that money into the next market that looks primed for serious growth: Austin. "I definitely don't feel like America is going to be like this forever," says Stephen. "You need to stake your claim now. It's like the Wild West again. Actually, I'm kind of shaking right now. I feel like a Coronado or a Cortéz." Even talk of a market correction, doesn't dampen his enthusiasm. "I love all the talk of the bubble. It eliminates all the chickens."
Jason Mitchell
Some diehard speculators are nervous that the market is due for a correction. Before graduating from Syracuse Law School in 2003, Jason Mitchell, 31, flipped two houses in Las Vegas in one month each. "It was a gold rush," he says. "Everyone was flipping houses as fast as they could. You would go to dinner, and the waitress had just moved from L.A. and flipped two houses in her first week." Mitchell and his wife, Connie, bought seven investment properties in Las Vegas; today; they have sold all but two. "I had almost like a eureka moment," he says. "It just hit me that I was seeing the same group of other investors at every development site⦠They were buying in other people's names. I thought, 'My God, the bottom is about to fall out of this thing.' So I stopped." In 2003, the Las Vegas market was just beginning to show signs of life. In 2004, prices there rose 49%, and the speculators were swarming. But real estate expertsâand some diehard speculatorsâsay Las Vegas may now be cooling off.
Los Angeles: Birthplace of the boom
As with gold rushers and dot-com millionaires, it was California that gave birth to the modern real-estate speculator. In 1997, the average price of a California home was $177,600. Today, it's $475,000âan increase of 250%. A market experiencing this kind of rapid escalation is the perfect breeding ground for speculation, and an impressive run of it is just what California got. In L.A. between May 2003 and May 2004, the number of homes sold that had been owned less than six monthsâmany of which were probably flipped by speculatorsâjumped 47%. As prices ballooned, however, speculating on California real estate became more expensive. Still, it wasnât very appealing to just cash out of real estate altogether.
Phoenix: Ever-expanding suburbs
Just as the Las Vegas market was starting to sag last year, the Phoenix housing market was heating up. Trish Don Francesco of Metropolitan, a real-estate-portfolio management company in the city, estimates that more than 700 California investors have visited her office in the last 18 months. More than half of them have purchased property. In the past year the number of Phoenix homebuyers who identified themselves as investors has more than doubled, to 2,703, and bought 18% of all homes sold in the Phoenix area in 2004, according to local real estate research company Infocom.
Austin: Is Texas the next frontier?
Some Phoenix speculators have already determined that it is time to move on, and to some eyes TexasâSan Antonio, Dallas and particularly Austin, with its diverse arts and business sceneâlooks like a good a bet as any. Though most of the largest Texas cities have experienced stagnant housing markets in the past several years, many speculators now have the state on their radar. The numbers are beginning to reflect that: Single-family-home sales volume in Austin jumped 38% in March over the year before. "I used to get about 20% of my business from investors," says Tom Polk, an Austin broker. Then he signed up with full-service property-management company ICG Group, a buyer-property matchmaker with international reach. "Now it's 80% investors and 20% homebuyers."
Miami: Home of the condo line
Getting in early on a southern Florida condo at pre-construction is the new version of scoring a spot in an Internet IPO. Since March 2004 alone, home prices in Fort Lauderdale have jumped 31%, in Port St. Lucie 39%, and in Cape Coral 43%. In Miami, the median sales price of a single-family home has risen 92% since 2000. The result is a sight that has become as much a part of Florida scenery as the palm tree: the condo line. Buyers camp out for days, with lawn chairs and coolers of food, and bicker over who is ahead of who. "Riots break out from time to time if the right security is not in place," says Kim Kirschner, head of Kirschner Realty in Hollywood, Fla. ..."
k:
