Global REI Basics – Part 1 – Choosing your Target Market

Hi Ziv,

Thanks for your sharing. I agree with your post.

Decisions of where and what to buy should be based on the end goal of the investor. I do still believe that having the right team is very important. I will always keep stressing that fact as I know when that storm hits a good team can pull together and make things happen without costing the investor.

Thanks and have a great day.

Great post also. Creating your own rules is very important. I have a set of investing rules I never break. These rules have been developed in our family over two generations, between my late mother and me. We call them Coburn’s Rules and they have got us through a lot of transactions and saved our bacon a couple times as well. Here are a few of them.

Coburn's Rules on Risk:

1. Always protect your investment (only ever risk your return)

2. Investments must be balanced for Income (yield), growth (capital gain) and depreciation (tax credits)

3. Don't invest in "one employer” towns (i.e. mining)

4. Invest in liquid markets (don't buy where the average days on market to sell are over 90)

5. Choose one thing and get good at it. (Dabblers will always get burned.)

If you would like the rest of Coburn's Rules email me and I will send you them.

Facebook: http://www.facebook.com/SteppingStoneWealth

Had a family friend who died of cancer a few years back. Right up to 3 days before he died he believed he was getting better and was making plans for the future.

The collapse is happening as we speak. The reason it doesn't appear to be a collapse is you and many others think it has to happen quickly and all at once. It's also being masked by $85/mth in FED stimulus. Without SNAP cards there'd be 47 million Americans lined up at soup kitchens.

Go back and study the 1930's collapse. It will give you an idea if the way things will happen. It won't be exactly the same but you can get some semblance of what and how things will unfold. Also look at post WW2 change in reserve currency from the British Pound to the US dollar. The US dollar will lose its reserve status possibly within 10 years. It's already lost 40% of global exchange transactions over the last decade or so and that trend is continuing as other currencies especially the RNB grow in importance. As the USD diminishes so will American influence. The likely outcome is war. Syria is the current flash point in an attempt to protect the petro dollar and US influence in the region.

We live in interesting times.

I tend to think more in terms of speculating rather than investing. There are no safe or good places. Much of the sentiment within markets is about chasing what yield can be found with an emphasis on capital preservation. 

I think Abbot will favor the property market in general however Joyce is warning about a bubble forming which is contrary to his commentary over the last few years. In the main I think the unsophisticated investors will loose ground. Gains will be more about luck than anything else. Sydney is the only market worth considering. Has been for a while but that could all change if Australia starts to struggle. There's a huge amount of Chinese money flowing into Sydney and I can't see that changing anytime soon. The Chinese tend to buy where investors don't though and that complicates the decision process if you're trying to chase the segments of the market most likely to appreciate.

There are pro's and con's to holding PM's or PM miners through shares. It's just another investment that can be used in an overall strategy. 

Don't think of any national market as a whole. It's a collection of segments, some rising some falling some going sideways. It helps if you look at where a suburb is in relation to its cycle. New, established, maturing, decay, rejuvenation. Cycles vary in length and intensity from place to place but they invariably follow the same pattern.

Again part of the cycle. The trick is to figure out duration and strength of each component in the boom bust cycle. How you play it determines your success or not.

Possibly but it will vary from segment to segment. Washington DC didn't miss a beat from memory. 

I know where all my fingers and thumbs are but I still hit them with a hammer from time to time. 

Your streets ahead of the crowd.. 

There will be many small booms and busts as volatility increases. The big one will come eventually but calling the timing is almost impossible. 

I've talked about this many times before but it looks like the US market is about to take a hit. Jay's already seen the writing on the wall and moved to protect his equity and gains from the last few years. I suspect those who invested over the last 3-5 years are at risk of losing all or part of their current valuations if this thing goes where I think it will go.

Housing "Recovery" Endgame Escalates

What's the percentage mix of corporate investors and private investors…50/50????

What's not being talked about is all the vacant HF inventory… 50% by some accounts. I'm only seeing comment about monetising occupied rentals at this stage.

If HF's panic there could be a race for the exits and that'll destabilise a fairly fragile market. I just don't see enough investor dollars there that could make a dent in the quantity of inventory likely to hit the market over the next few years. Not above a 30% discount anyway.