You've obviously never been to GEI. There are plenty of threads glowing with fresh ideas.

Look around you, the world is changing, and new challenges are facing us all. The old ways of making money
may not work in the future. We will need some new visions (and some new understanding of risks to guide us.)

My journey back into America, if and when it comes, will be guided by some new thinking, which is still be
formulated.
Some ideas are here, in these articles for Financial Sense:
ENDING A CENTURY OF OIL ADDICTION : http://www.financialsense.com/fsu/editorials/2007/0522.html
&
RESTRUCTURING AMERICA'S SUBURBAN DREAM : http://www.financialsense.com/fsu/editorials/2008/0107c.html

If you cannot see the value in investing for the future with some sort of vision guiding you, then I am fairly sure my postings will be wasted on you.

I guess you're right, it just pains me to see such naked property speculation being talked about when that was what got us in this mess in the first place

I have been to GEI and I agree there is some great stuff on there. I just hate property speculating. It is a very lazy form of capitalism.

Edit to add: I actually enjoy your posts very much Dr Bubb and find them very interesting even if I don't necessarily agree with them

No.
The mess comes from OVER-speculation, Excessive gearing, and a failure to understand risks,
and the property cycle. Intelligent property investment, helped turn the cycle upwards in 1994/95,
but it was followed by years of amplification, imitation, and exaggeration which, over time, morphed
into a grotesque bubble, fueled by stupid investments from qrotesque people. And greedy bankers
and estate agents certainly did their bit to keep it growing.

Intelligent investment early on, and unthinking crowd-following late in the cycle are two very different
things. One takes courage, the other requires blindness (to risks.) Best not to confuse them.

Sigh..will we ever be as brilliant as you though Bubb? We're all just the dead coma of your sparkling meteor shower

I thought the brighter investors RELIED on the bubble to maximise profits, getting out before the top. These investors would become public VIs to boost their position as time went on. Dummies join the fray and lose their shirts.

So there is GOOD speculators, and BAD Speculators it seems.

nope just winners and losers, it's that specific IMHO.

DEFINE "speculation"!

You may find that your definition is different from mine.

Many people who call themselves "investors", are in reality "speculators", because the main reason
they are putting their money into property is to speculate on the possibility of capital gains.
And many are not honest about their motivations, even with themselves.

You will find that I love puncturing comfortable self-delusions. This habit could be more widely practiced
on HPC. I see many self-deluded posters here, who are little challenged.



There are many who have bought, and then spun heavily.
But most here can see through their lies.
They key thing is to do the homework, have a sound reason for investing,
and take full responsibility for one's own decisions

...There is a Cleveland-based Estate agent posting on GEI...


Hi, Svetlana.
Welcome to GEI. How kind of you to visit and post here



You are right. Many people will choose a suburban life for their families.
Certainly there are some who visit GEI and post here who will prefer a traditional suburban lifestyle,
but I do worry that observers like James Howard Kunstler will prove correct in his view that "the suburban
living arrangement has no future." For myself, I think the risk of a $200-250 oil price within the next 2-3 years
is a real possibility, and I want to make living and investment choices that will stand up to that type of price
move. So the traditional suburbs, relying heavily upon transport by car, is not right for me.

Others who do not agree that we will see this, may make different choices.



That sounds like the sort of area that would appeal.
I think many here would be keen to make an investment like that, or many times that size.
We will need to explore many issues, for example:
+ How will the properties be managed?
+ How will they be selected?
+ How can such small properties be worthwhile for an agent to help? (you need to live too)



The tax rate issues are important.
And many may not be aware how large the variations can be, and the impact this may have on school
systems, and the quality of education in different areas.



Yes, please do keep us posted.
And I want to encourage Pxxx, one of our valued new posters, to contact you during his forthcoming visit
to Cleveland.

Dr Bubb, do you think there are any investment opportunities in Kazakhstan? What do you think?

Some folks lack a "Global perspective". They talk about Kazahkstan, on a thread devoted to Midwestern
property. Seems like those are the sort of folks who want to ahng out and talk about a crash coming,
or maybe never coming, while money is being made by careful investigations into profitable opportunities
elsewhere.


Meantime // Svetlana makes some great points, in this posting from elsewhere...



If you buy a foreclosed property from a bank, you need to plan on:
+ Finding the property in poor condition, needing alot of work,
+ Spending plenty of time, effort, and money fixing it up
+ The neighborhood it is in may be going downhill, with other foreclosed or abandoned properties nearby



I think that getting a reliable agent to help find a property in an area you do not know well will be money well spent, since you can easily spend $500 worth of time and effort chasing "dead ends" if you operate on your own, and a "mistake" will wind up costing far more than that. Of course, you and the agent will need to have a good understanding of what you are looking for. And maybe some information on this board, plus some research on teh internet, and on the ground, before you buy and/or engage the agent will be very necessary preparation.

As to buying multiple houses, this can be a very good idea. If you buy enough houses in the same area, you may be able to help "turnaround" or maintain that area.



This house looks attractive, and is ceratinly cheap by UK standards. It may represent a good way to get started, and the only sensible way to invest for someone who hasnt the time to fix up a property themselves.

However, it is obvious that the seller bought it even more cheaply, and has already spent time and effort on the renovations. They will be wanting to make a good return on that investment. So you can buy from the renovator, or buy from the bank, and spend the time, effort, and capital yourself, and look to capture the "renovator's edge."

Contesting the property tax raises an interesting point. As prices decline, and owners get lower assessments, the area's tax base will erode, and the local government will be stuck in a tough bind: do they cut back on services, or do they raise the rates of tax, to higher percentages of assessed value, so they can win back the taxes that the falling market is taking away.

Svetlana,
Would you be willing to provide a detailed budget (items, estmated amounts), of all the costs that someone may face in buying properties in Cleveland?

Here's a crude example, which is "off then top of my head":

+ Property Purchase cost........ : $50,000
+ Property search fee, agent... : .. $ 500
+ Closing fee, lawyer.............. : $ xxxx
+ Title guarantee.................... : $ xxxx
(if financed):
+ Loan processing fee............. : $ xxxx
+ Mortgage closing, lawyer...... : $ xxxx
= TOTAL purchase cost........... : $xx,xxx // what have I left out?

FIX-UP COSTS (depends on condition of property)

RUNNING COSTS, per annum:
+ Mortgage interest & principal : $ xx,xxx (what % loan is obtainable now? how many years)
+ Utilities, elec., gas, water..... : $ xxxx
+ Property tax....................... : $ xxxx
= TOTAL running cost............. : $xx,xxx // what have I left out?

An example of this type, may be useful in making comparsions with the UK.
If you do not live close to public transport, you will also have to fact in the cost of owning,
maintaining, insuring, and fueling an automobile. It it is a "rough neighbor", the insurance
cost on the automobile can be rather high.

This is a thin line between investing and speculating. Speculating often gets out of hand in a bubble market but similarly speculators are valuable because in a free market they are there to take the opposite side of any trade. That is what a free market is. You have agreement on price, but disagreement on value. One person thinks it's a good price to buy and another thinks it's a good price to sell. The key is to understand markets and that requires an understanding of speculation, cycles and market psychology. It's only this way that you can make an independent future for yourslef. Learn about markets and understand the risks when you invest your savings. This is much better than just handing over your cash to a big city investment manager or pension fund, who will cream off a few percent every year and probably underperform the market.

Those who complain about BTL investors presumably think private ownership of any second home should be made illegal and we all rent off the government instead. Fine if that's what you want, go and rent from the council, for the rest of us we prefer to rent privately because the quality of housing we can get is so much better and yes we are prepared to pay for it.

And no I am not a BTLer, the BTL brigade in the UK will get what is coming to them for ignoring the risk in the UK housing bubble, but that is the free market. However I don't want more government intereference in the free market. Otherwise we may as well give up and let the government fix prices for everything - housing, food, energy, etc...

Erm, no.... pick up attractive net yield differentials now.

What are the current yields from US properties?

It is amazing that we have a moral dilemma going on. We have lost touch with the real world!!!

We have people who are are looking to buy property on a speculative basis relying on others opinions for their purchase.

We have the BTL brigade who want to collect as many houses as they can for their pensions using other peoples money (an American imported idea that became widespread in seminars - selling the idea to the more gullible person).

We have the genuine long-term landlords who have added to their portfolio through hard work and now maintain the market for good quality rentable accommodation.

We have people who are running around globally, without seeing any of the properties, (listening to young brokers who are only interested in one thing COMMISSION) and buying blind; then wonder why their foray into the property market went ape-shit.

We have the off-plan finatic who wants to flip apartments/flats/houses to achieve massive gains. Though I think this strategy is well and truly over since we know that the sellers (not all) were in cahoots with the developer deliberately overvaluing the properties to line their own pockets. In some parts of the world the developers would also go bankrupt having absconded with the funds. So no chance of recovering deposits etc.

We have property clubs etc scouring the US for the great deals that become not so great deals when all is said and done because of the hidden costs that are not immediately transparent to the novice.

We have people taking bus excursions in the US hoovering up their property bargains.

We have the lifestyle and renovator investor doing it for themselves either badly or successfully.

We have people philosophising about the greed of property speculation and its repercussions, people buying repossessed property from those less fortunate, property buyers not being perceived as having a proper job, that the global economy cannot solely rely on bought and sold properties alone to survive because we need to produce goods etc!!!!!! The list is endless.

We have the 'Gurus' in seminars, on forums, in property clubs flogging their bling to the hotshot, well-heeled, and, not so well-heeled, Joe and Gill who are looking for hand-holding guidance.

Well the moral dilemma is a minefield of explosives.

If you try pinning people down about actual figures and what they truly own then you will find many are living at excruciating debt levels, with leveraging verging on the brink of disaster.

The moral dilemma is how much money can you hope to spend in your life time? how many houses can you live in at any one time? Why are people's values so shot to pieces. They are unable to live and act on the things they once believed in.

The truth is if we can't produce things we are eventually screwed and this pre-occupation with buying as much property as we can will be a pointless excercise.

There are things more worthy than buying houses in this world but whilst we continue to do so by all means listen to others, take advice, get hold of research but ultimately take your own advice, be selective in your choices, go with your gut feelings and only buy if you want to buy after you have fully understood your market.

Finally, get a life!!!!!!!!!!!!!!!!!

Get serious. And learn to think for yourself
Do your analysis. Make that part of your "life", and be successful.

I'd like to know more about those properties on the Erie Canal.

Any photos?