What Trend Must We Watch Out For
That No One Is Talking About… Yet?
It seems at every turn, I get asked the age old questions of:
- US vs Canada, Where do I buy for best returns on my money?
- Should I head south to go to auctions and “pick up properties for pennies on the dollar?”
- “I heard that the SunBelt in US is an even better place to buy than the booming economies out in Western Canada?”
Well, as a regular reader of this blog, I am sure you know that we LOVE analysis and we especially love analyzing markets without a pre-conceived outcome… we let the market numbers speak for themselves. No hype, no over-stated profits, no short term ‘hope; with the goal of eliminating myths and emotions so investors can make strategic choices.
As you know, it doesn’t matter to me where you invest, as long as you invest based on reality, economic underpinnings and truthfully a place where your money will get the best ROI/Risk ratio because I know it works and it has worked for me for decades.
Investigating and choosing a proper piece of real estate to add to your portfolio follows along the same decision path as any other investment. Sometimes the additional risks are worth the potential reward… and sometimes not.
Are You Building your Portfolio on Blue Chip Dividend Stocks or Penny Stocks?
In fact I equate different areas of real estate investing to stock market choices.
The first type is, the well chosen positive cash flow property located in an economically strong and growing area can be considered your Blue Chip “Dividend Stock.” Pays you a regular income/return on an annual basis and it’s volatility is low (and only the odd time do you hit a huge home run – but it is the basis of a sustainable portfolio. Your money maker)
The second type are the “Buy Cheap hope for it to go up” This can also work, I equate this to penny stock investing. There are some chances for a big jump in value and you can get out… but there is also a VERY good chance that it will lead to nothing or eventually drop right off the market. You may wish to speculate like this, sure,, why not. But it would be financial suicide to put 100% of your investments in penny stocks, a bit may be fun but go in with your eyes wide open. It is not investing it is speculating. The other similarity between penny stocks and the ‘buy cheap’ real estate investing model is that it is FULL of people who manipulate values for their own profit and they don’t care about who it hurts or how much it destrys people’s finances.
But back to the US vs Canada questions. I am on a quest to find out the REAL story behind where the best place to invest your money is now, today, 2013, at this moment of time (not the headlines or the “I know a guy” stories)
Along this quest I have been speaking directly to many investors (with large and small portfolios. Residential and commercial), I have spoken with economists, analysts, economic development teams and on and on.
Some of these conversations I have been able to record and over the coming weeks I will be able to share some of them with you. You will find that many have different opinions to not only me, but to each other. There will be some discussions that may even have got a little heated. But suffice it to say, they are real and unscripted!
The US market seems, according to the media, have begun to take off. Yet, on the street what’s the truth. Much different to the headlines.
In this first conversation, I speak with Greg Coleman. He is an investor who has targetted very specific areas, he gives the reasons why and as a matter of fact we get to hear about his latest group of properties he and his partner are closing on.
But he also has many great words of caution (and has shared a video and pictures of a new and NOT exciting trend occuring in some key markets in the US). It is about a movement that is just really beginning to catch fire – turning investors and buyers into villians.
If you read my previous post regarding revolutions and demonstrations around the world and why WE need to pay attention to them, you should understand the groundswell that is coming (if you haven’t read it, here is the link Protests & Real Estate)
The complete audio of my conversation with Greg (as well as the video you just have to see) is located here. I do urge you to take a listen:
Canada vs US Discussion and the coming groundswell of protest
Enjoy the audio interview!