sansbrook

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    • Wed Jul 16th 21:08 PM
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      Natural Gas Will Stay - Cramer's Lightning Round (7/15/08)
      Please use spell check if you can’t spell. Otherwise it makes you sound like a knuckle dragger who is trying to point out how much of an idiot Cramer is.
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    • Thu Apr 10th 07:49 AM
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      Brother, Who Can Spare Another Dime for Oil?
      Sometimes it's just not worth responding. The lunacy is self evident.
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    • Thu Jan 10th 09:46 AM
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      Real Estate and Leverage: Finding the Right Balance
      I started investing in real estate when I was 22 and single. I had a good job and could handle risk. In the late 70s I started buying single family homes using cash from friends and advances from my credit cards. Not too long after that in the early 80s the market was frozen by the government jacking up interest rates to almost 15% for mortgages.
      I say frozen because like politics, all real estate is local. In the Midwest here, the property values did not go down hardly at all and vacancy rates did not rise. Vacancy rates are governed more by the job market in your area than the overall real estate market. Some areas in Michigan lost value over the last 5 years while almost everywhere else real estate values skyrocketed. It all had to do with jobs. No jobs? People move out and values go down. I have never had vacancy rates above 5% in 30 years of investing. That is due to the slow but steady growth in the area that I invest in.

      I stopped buying properties for a while in 1980 due to the interest rates but cash flow was able to cover what I already owned. It was at that time I started to invest new money in the stock market. The timing was good and I continued to put money in the market ever since. The stock market and the real estate market do not rise or fall together and it is easier to sell stock for quick cash than sell a property. During the 2000 stock market melt down however, my properties were still holding up and spinning off cash.

      I will retire shortly at 55 based on both my real estate and stock investments and the cash flow they throw off. I own REITs but mostly other types of stocks. There is some correlation between REITs and your real estate investments (interest rates for one) but they don’t run in lock step. They may open a landfill next to your apartment complex but it won’t hurt your REIT stock. Look into oil and gas investment trusts if you want the big dividends. You are on the right track. You understand the beauty of real estate investing. Start early and invest like it's important to you. Make your own future.

      My advice is to look at the amount of risk you are willing to take. If you can't take any, put everything in a passbook savings account or bonds but be prepared to work till you are 65 and worry about what the government is going to do about Social Security. Most advice like Lloyd’s will be on the conservative side. While anything can happen, what is the likelihood that it will? That is managing risk.

      You need to prepare only for the things that are most likely to happen, not what can happen. Look at your lifestyle, your income and your investments. Make a “what if” plan for real problems that may come up. Some you may need to take action (insurance, will, savings etc.) and some may need only a plan for action. Do put your properties each in a separate LLC though.

      One last thought. I bought my best properties in the mid to late 80s as we were just coming out of the interest rate mess. I bought when everyone just knew that real estate was a bad investment and the party was long over. I was able to negotiate prices and terms because the sellers were desperate.
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