Educational Podcasts
Higher Down Payments Change the Income Property Game
Need evidence that the mortgage industry was taking crazy pills back in 2006? Consider that the average down payment required to purchase a single family residence was 4%. If you had a heartbeat and good credit, some lenders were standing by prepared to loan 100% of the purchase price on the basis of your name, address, and social security number. We all know how that turned out. A good many of those people who thought their American Dream ship had come in are now counting down the days until they are evicted from their house via foreclosure.
A REAL Real Estate Investing Education
If you’re looking for the best real estate investing education in the world, you have two options. The first involves spending a lot of money on a high-dollar seminar from a real estate “guru” that serves mainly as a precursor to an even higher-dollar seminar, which makes you wonder why even bother with the first one? The answer is, of course, that those types of companies are in the seminar business. Not the real estate business. The second option, and one we hope you’ll take advantage of, is the next Meet the Masters of Income Property Investing hosted by Jason Hartman and Platinum Properties Investor Network.
Capitalist Advice for the Environmentalist
An incontrovertible bit of wisdom surfaced at last weekend’s Masters of Income Property Investing live educational event, delivered succinctly and without great fanfare from the lips of Platinum Properties Investor Network’s own Jason Hartman. There’s really no polite way to phrase it, so let’s just say it outright:
“The best thing an environmentalist can do is not reproduce.”
Unemployment Predictions for 2011
Employment is one of the fundamental factors of economic growth that represent the most frequently used yardstick for measuring recoveries. In discussion of employment, there are two distinctly different categories of unemployment that must be understood. The first is the ‘narrow’ definition that compares the people who are unemployed and looking for work against the total labor force who is employed or looking. The alternative or ‘broad’ definition includes discouraged workers who have stopped looking for work and incorporates the number of people who are working part time, but would like to be employed full time.
Austin, TX, Expected to Earn 11.5% Return on Investment in 2011
Austin experienced a moderate value contraction after the financial collapse, but is now regressing back toward its long-term trend of modest single digit appreciation. The economic fundamentals of Austin continue to be strong as it moves into 2011. Currently, approximately 37% of listings in Austin are from foreclosures.
Oil Predictions for 2011
Oil prices have been going through a period of very significant volatility over the last few years. In the months preceding the financial crisis, global demand for energy was perceived to be on a permanent upward trajectory. This drove a large degree of speculation on oil prices by investment fund managers. The resultant run-up in oil prices1 generated large profits for established oil companies, which drew a high degree of political pressure from the government.
2011 Gold Predictions
Gold and oil are very different in their investment characteristics since gold is purchased principally to hold as an inflation hedge and oil is purchased primarily for refinement into gasoline and other petroleum products. Typically, this makes oil much more subject to international political factors and global economic forces. However, Gold has taken a more prominent role over the last few years as it has become a de-facto ‘anchor’ currency that is value-constant against monetary fluctuations by central banks.
What to Expect in 2011 Monetary Policy
One of the primary monetary news items to note as 2010 draws to a close is the announcement of more ‘quantitative easing’ by the Federal Reserve1. In plain terms, this means that the Fed will purchase treasuries on the open market. This will have the effect of artificially increasing demand for treasuries, which will push down the rate of interest. It is also expected to have the effect of pushing more money out into the economy with the hopes that it will stimulate consumer demand. Unfortunately, many fear that it will also stimulate inflation.
Atlanta, GA – 25.2% Return on Investment in 2011
Atlanta represents an investment gem in the southeastern United States. It has spectacular economics from a development and employment perspective that make it a tremendous opportunity for income property investors. With a wide diversity of employers, many universities, and a vibrant cultural presence in the city, Atlanta has attracted a tremendous amount of in-migration from young professionals seeking employment opportunities. Since many of these young professionals choose to rent, the Atlanta market has very healthy rents relative to values. Currently, approximately 31% of listings in Atlanta are from foreclosures.
S&P 500 vs. Gold Price
One of the important ratios to keep in mind when examining the equity markets is the gold price relative to the major stock market indexes. This provides a valuable insight into the extent to which market values reflect a real shift of sentiment toward equity value, versus the extent to which the value has lost value, driving increases in nominal valuations to simply retain purchasing power. Over the last 35 years, the relative price of Gold1 and the S&P 5002 has oscillated up and down very significantly. In the aftermath of 2008 and the financial crisis, this ratio has regressed toward a value of 1.0, which indicates equal valuation for the S&P 500 index and an ounce of gold. In the latter half of 2010, the S&P 500 vs. Gold ratio dropped below 1.0 as Gold prices were pushed up by speculators seeking to hedge against expected future inflation. Our analysis indicates that this trend is likely to continue through 2011 as monetary expansion inflates both asset classes.