Educational Podcasts
Portland not Good for Income Property Investments Yet
Portland experienced a cyclical expansion of market values similar to many other areas, and saw a subsequent decline after the financial crisis of 2008. The market showed signs of stabilization in 2009, but has subsequently resumed a downward correction. Values in Portland are regressing toward a more linear growth trajectory. Currently, approximately 42% of listings in Portland are from foreclosures.
Great 19.4% ROI for Phoenix Income Property Investments
Market values in Phoenix are currently at approximately the same level as in the year 2000. The market area experienced a tremendous run-up during the real estate bubble and a spectacular during the financial crisis. During 2010, the regression back to fundamentals continued in Phoenix. For people who bought at the wrong time, this value contraction leverages out to a rather substantial loss. However, the current low interest rates allow buyers to generate cash flows that will help them to sustain the investment through value fluctuations until a path of growth is resumed.
The Future of Inflation
The general price level in 2010 relative to 2009 shows average price levels that are nearly flat. The reason for this trend is significant commodity price increases in 2007 and 2008 that collapsed after the global financial crisis. Much of the reason for the price volatility in commodities is leveraged buying and selling through hedge funds that drove prices up during the bubble and precipitated a price crash after the bubble collapsed as many entities were simultaneously deleveraging their positions. To demonstrate this phenomenon, we have graphed the Consumer Price Index for Urban residents (CPI-U), Producer Price Index for Finished Goods (PPI-FG) and Producer Price Index for All Commodities (PPI-AC) from 1995 up to the present time.
The Incredible Shrinking Dollar
One of the most important concepts for investors to understand is that a dollar today is not the same as a dollar yesterday, and is not the same as a dollar tomorrow. Over time, inflation erodes the purchasing power of currency. This is critically important, because most people focus on the nominal change in the value of their investments, but unintentionally ignore their real value after accounting for past and expected future inflation.
Predicting 2011 Real Estate Trends
One of the most impactful news items heading into 2011 is the announcement by Bank of America that foreclosure activity is being suspended1, and the decision by government agencies to increase scrutiny on the foreclosure process. In the wake of this announcement, nobody completely knows how long this increased scrutiny will last, how intense it will be, and what impact it will have on market activity.
Expect a 22.5% Return from Your Orlando Area Investment in 2011
The city of Orlando experienced a tremendous increase in market prices from the year 2000 through 2006, and a downward correction in prices since the beginning of 2007. As 2010 concludes and 2011 unfolds, we expect to see prices stabilize and regress toward a long-term linear growth trajectory. Currently, approximately 68% of listings are from foreclosures.
In practical terms, prices in Orlando have declined to less than half of what they were at the peak. This has resulted in a tremendous improvement in the ratio between cash flows and the price of investment properties. However, the extensive inventory of foreclosures is still being worked through by the banks, and is expected to suppress future value appreciation. The current situation is a case where values in Orlando grew so rapidly that they no longer justified income property investment, but have now adjusted down so that they are back in line with the underlying economic fundamentals. The city economy is very heavily intertwined with the entertainment industry, so it is likely that a full recovery will lag the overall economic recovery.
Realtors, Don’t Miss the 2011 Packaged Commodity Rush
One of the first things realtors pursuing an Accredited Income Property Investment Specialist (AIPIS) certification learn is that investing in income property is a different way, though wildly more profitable, way of investing in commodities. Commodities like copper, wood, cotton, petroleum, steel, etc., are the building blocks of what? Houses! You could focus on the old fashioned way of investing in commodities via the designated exchanges that buy and sell the stuff, or you could fully engage the brain in your head and recognize that simply buying a commodity in its raw, basic form is a second class way of investing.
Income Property and the Return on Inflation
You’re used to economic predictors and prognosticators discussing an asset’s return on investment, but Jason Hartman has coined a term that brings a knowing smile to the lips of those already taking full advantage of the situation. We’re talking about your Return On Inflation (ROI) and, if this is the first time you’ve heard of it, pay attention.
3 Ways the AIPIS Accreditation is Money in the Bank
We’re not talking about just any old bank. The AIPIS accreditation can put more money into your bank account. This year! For whatever reason, we humans have chosen to mark the passage of time annually. Every time the calendar rolls around to January, our minds pause to ruminate on what we’ve accomplished in our lives and what is yet left to do. Promises are made and often broken: lose weight, quit smoking, get a better job, learn a foreign language, travel, earn more money.
The New Sales Job Resume for 2011
To us, the traditional sales job resume always seemed like kind of a dopey idea, but employers have to use something to winnow the pile of applications down to a manageable number so, by default, the sales resume has been and continues to be that tool. The light bulb over the head moment is when you realize that just because a traditional resume is what every other applicant for the position turns in, it doesn’t mean you have to follow that herd of zombies.