Real Estate

When stocks go down, oil goes up. When  stock go down BIG, oil really goes up! Just like a seesaw there are so many things that adjust when other things move. It is said that money does not just go away and disappear, it just finds a better place to move. Gold and oil spiked today due to the drop in the stock market getting news of unemployment and foreclosure numbers looking real sad. So money moved out of the market and into speculative oil. The move of this money was so large that the jump in oil was $10 barrel, and gold moved up $24 and ounce. I heard a story that hedge fund managers are taking advantage of a loophole in buying oil that is accelerating the upswing in price. Smart investors will now see that there is a HUGE imbalance in the supply and demand of oil that should make a large swing happen in the other direction to bring oil prices down. With production in the US slowing and airline companies slashing the amount of flights they normally have in the air, we’ll see the demand for oil dropping quickly. Oil prices are just way to overinflated to sustain its current level and the pendulum is beginning to make its turn and will gain the momentum it needs to get prices back in line. If you educate yourself in understanding how to make money when a market goes down, now is the time to initiate the trades for oil prices to retreat and make you profitable.

Too bad we couldn’t hedge our gas prices earlier. If we could have, I know my wife and I would have bought $2000 worth of gas in January. We knew prices were gonna continue to rise then, but we didn’t have a way to do it. I heard some states have ways to do it, maybe California should look into it.

This is an odd sign. Big news today is that the dollar has gained some strength. Typically, this usually means that Gold prices should start to drop hard. For today this is not the case. What could this mean? My opinion is that commodities in general have a ton of momentum, so much so that even the standard norms which should have a affect on bringing prices down can stop the upswing in price. What this also means is that inflation trends have started gaining a lot of upward momentum and it will take a lot more work to slow it down.

As much as I like Gold and Silver as investments, knowing what outside forces have an affect on the price but are not holding to the trend greatly concerns me. Hopefully it just means that someone out there (with a lot of money) is buying while the going is good (meaning that the prices are still cheap) and that’s causing the increase. I like seeing Gold prices increase, but only because I have most of my investment in it. I don’t like what drives the prices of Gold though, because it means that our nations dollar is weakening and so is our economy overall.

In the end, all any of us can do is take advantage of what we hope is another cycle for any investment that might be at t low point. GREAT real estate deals are all over the place now. Learn to negotiate and buy property at great prices, and you’ll be able to stay ahead of the economic problems most Americans are facing today.

Have a great Memorial Day weekend, and take time to learn about what’s going on around you!

It seems that the heat is on it’s way. Yesterday, here in California, it felt like mid-summer already. Temperatures have been about 100 degrees and moods seem to be flaring in correlation with the heat. Add a sprinkle of “high price stress” on top of it all, and you now have a population that is in need of anger management classes.

A new report today says that wholesale inflation rose very slowly, slower than expect. (yeah right) The government tweaked the numbers so bad, it wasn’t even worth really publishing.

Gold is back on the rise, but oil will soon peak and interest rates will have to go back up. This means that Gold may not maintain the strong price rise, but I am thinking it won’t go much lower all in all and a slow “continuous” rise is probable for the long term.

Inflation will be the biggest enemy of everyone’s wallet. (beside the cooling cost to beat the heat) BUT all in all, there is always a golden shining light at the end of the tunnel. Real estate prices continue to plummet, and this gives many opportunities for those who know how to play it.

Read up on things that gained a lot of popularity during depressions or recessions, and there is a lot of opportunity to get ahead. Think about it….

A few days ago a new rally began for the stock market as our government reported that our economy actually grew by 0.6%, which was higher than expected. This has got to be one of the most common deceptions our government does to the american people to give us a false confidence about our nations true economic status. The report is a complete miscalculation since they didn’t seem to input the proper rate inflation. They say that the inflation rate entered to calculate the growth was not readjusted to the current inflation we as americans are really witnessing. Since gas prices and groceries have quickly become a hard to afford, it’s obvious to everyone that we are spending more for everyday living. There was a yahoo finance article that did a true estimate that stated we have actually taken a huge loss with regards to our economic growth and that the real estimates won’t be calculated till a week or so. The big questions is….will we see this new calculation?Our dollar has strengthened because of this news even though interest rates were recently cut. This has made the price of cold drop considerably, even though there are still many elements that should hold the price of gold steady or make it increase. I still hold firm that Gold will reach $1100 an ounce by the end of the year. We should see days ahead where Gold skyrockets in a vertical way.Keep an eye on the big news that come out daily. Unemployment, real estate, inflation,  and oil prices. Any negative news from these areas will push Gold back to where it balances out to support those who have holdings in this precious metal.

Waiting at the airport in Phoenix for my flight home. Haven’t got a chance to do much of anything with regards to looking at financial matters, but noticed that Gold jumped to a jump since Friday. I did see news that oil prices have hit a new high and the dollar has dropped lower again which are usually reasons for Gold to take a jump.

So while here in Phoenix, I’ve been asking the locals (clients that I met) about the economy here and what they thought of the real estate market. Most said it’s a great time to move out here if I was looking to buy a house because foreclosures are rampant here like everywhere else and deals are easily found. Spoke to one long time local who told me of very interesting zoning laws out here regarding having office space that could double as a residential house. These properties are usually corner lots and must have adequate parking (I think he said 8 stalls) and must follow other specific rules that are pretty stringent but understandable. Those who live here love it, and don’t really feel the heat much. (I felt it!) I can’t imagine what it must be like in the middle of summer.

One other interesting thing. As I met with clients out here, I found a strong willingness for many people to give referrals for others who might like our services, even if they were competitors. Also, everyone seemed to know each other, like this was a small town of 200 people. With everyone so willing to share knowledge, it helps everyone move ahead and have a great outlook to their. I haven’t seen it anywhere else yet, but it should definitely be practiced by more industries.

Gas hits an all-time high here in California at $3.75 a gallon for regular unleaded, Gold predicted to hit $1100 by the end of the year, and our dollar is sinking once again.

I spoke to a women looking for some advice on her finances. She owns a nice place in France that she wants to fix and rent out. There is no mortgage on it, but the bathroom is unusable and she has no funds to fix it. I asked if she was willing to sell it now while the real estate market has not totally crashed yet, and she said she wants to keep it because it is so beautiful even though it’s unusable. I offered her a solution that would take some time, but help to secure her future.

1. sell the France condo (she might get $200,000 for it), then do either #2 or #3 below
2. take that money and find an apartment building to buy, use the $200k as a down-payment or closing cost OR
3. take the money and buy a few condos at $25,000 to $30,000 a piece and pay it all in cash so there would be no mortgages. (believe it or not, there are a lot of these places in the midwest)
4. She could also rent her house here and use the income to sustain herself in France as she fixes up the place. If the rent gives her enough income, she could sustain herself for a long time. (the weak dollar is a concern on running the actual number that she would have to consider)

Investing in real estate has its risks, I am well aware of that. I’ve made my mistakes and had my homeruns. The key is knowing who to get help from. Success is usually done when good team is put together. Spend the time to find good professional help, and your risk goes dramatically down, and success rate up. I think referrals work best in finding good team members, but so does asking a lot of questions to see how they answer. A combination of getting a referral and interviewing them is even better.

Don’t forget to educate yourself as much as possible. The more you know personally, the better you’ll be able to see “red flags” in a deal. The future is yours to make and mold, you can’t do it by praying God drops everything in your lap.

I hope everyone had a great Easter out there! This weekend for me was all about getting back in to reading more and watching more financial news and commentary, and dog sitting. I never owned a dog before, and after this weekend, I don’t know if I’ll ever own one in the near future. They’re definitely a lot of fun, but my house is a mess and I think I’ve come down with allergies.

Anyway, on one of our many walks (I am so paranoid the dog will relieve herself in the house, I take her out every 2.5 hours just to be sure she stays on empty), I went to see an open house in my condo complex to see how much property values have dropped. Here is where we can see what’s really going on in our Southern California area. Real numbers…

A 3bedroom/2bath condo that once sold for $330,000-$350,000 was now on sale for $219,000 and another for $199,000. That’s over a 33% drop in prices when you factor in that the realtor said we could probably negotiate even lower if we wanted too.

Most recessions follow the real estate and construction markets. Right now, with real estate dropping so rapidly, our construction industry is following suit. With this happening, rest assured that it won’t be long till it seems as though construction is at a halt. The real estate investor pros are preparing for the next boom coming. It won’t be for a few years, but when it happens, they’ll be jumping in and waiting to become exceptionally wealthy. For now, money is going into hiding. Some of it seems to be moving toward the stock market, but I don’t think it will stay there long. The stock market is unforgiving, and when a little negative news comes out, it reacts fast and hard. The gold market has also shown to be extra volatile, but the world is going to be dependent on it to hold value, so I am personally confident many wealthy people will continue to shelter their funds into this precious metal.

The good news is that oil prices are on their way down. However, I saw that OPEC will make sure that oil prices does not go below $85 or $80 a barrel. I think we might hear an announcement that OPEC may be planning to cut production soon. If that happens, we can expect even more volatility on our markets.

I am hearing so many crazy things around me lately. I do not understand why basic global economics is not taught in high school today. Maybe our kids would understand where our country is headed if they knew what was going on because they were taught the basics of how global economics works.

I am hearing very disturbing opinions of where people think our country is headed and also what they predict will happen soon. The general public does not pay attention to the “real” news out there, or they think it doesn’t apply to them. The news of Bear Stearns needing to be bailed out today should be a real concern to everyone. If the nations 5th largest investment bank can have such an emergency that the Federal Reserve and JP Morgan Chase need to bail them out of their financial problems, it’s just another sign that needs to be taken seriously. How much can the Federal Reserve really do to save our country if all our big investment firms start to collapse from mistakes made? Our FED knows that they are on the verge of causing hyperinflation. To save bad financial institutions with bail out money is necessary to prevent a run on the banks, but what will it cost us in the long run?

I predicted that Gold would do a pull back today, which it has…but not nearly as much as I think it should be pulling back. Those who are selling are also being offset by a lot more people buying in, so gold is almost stable right now. That’s scary…It means that confidence in our dollar is sinking more and inflation is about to probably get ready to pounce hard
on everyone.

***MARKET THOUGHT OF THE DAY*** Here is a little bit of news I am passing on some investments that should weather the storm of recession pretty well. BUY into Storage Facility Companies. Do your best research into each company first. Make sure they are solid in their balance sheets. The reason for the gains in these industries will be coming from those who get foreclosed on and need to take their stuff out of their homes to downsize. I am thinking this is a good theory, but I am not sure if people going through foreclosure will have enough money afford a storage place. What are your thoughts?***Disclaimer: I am not a “professional” and do not have a license to give advice and could be totally wrong in all my predictions or my feelings. If you decide to take my advice without doing your own research, that is not wise, and not recommended. Trade at your own risk and know that most individual investors (something like 90% +) lose money investing in the stock market.***