A Family Story
Here is a short story you may
enjoy.
1938 My dad and his brother came to Florida on a
motorcycle with $10.00 in their pockets.
1964 Dad told me he could
have bought all the land from Orlando to Daytona for a dollar and a half an
acre in 1938. I asked my dad why he had not bought land. His answer: "I did
not have $1.50 and the banks were broke.
1970-2003 Real property
values and rental rates generated steady growth and returns. This, in
combination with creativity, hard work and planning, resulted in excellent
returns with minimum risk.
2003-2006 Insanity of buyers and lenders,
fueled by government policies and agencies (Freddie Mac and Fannie May) in
concert with Wall Street, flooded the market with funny money. This caused
insane inflation in real estate prices. During this time, prices being paid for
real estate by speculators made real estate investment (not speculation)
impossible. The income generated by the property was insufficient to provide a
reasonable return on outrageous purchase prices being paid by the
speculators.
2007-2008 The bubble of insanity burst. The banks went
bust and would no longer make loans.
2009It's 1938
again!
So what has this to do with the future of our
families, children and grandchildren?
To protect their future from out of control inflation we must invest in commodities and be out of excess
cash positions. We must generate income higher than the banks will pay with
good security of our capital. Real estate bought at or close to the bottom of
the market, where we are now, which generates rental income is one of the best
commodities available. While I am not finding land for $1.50 an acre, I am
finding opportunities daily that I have never seen in my 38 years in the real
estate investment and management business (actually 50 years if you count the
years I was dad's helper.)
enjoy.
1938 My dad and his brother came to Florida on a
motorcycle with $10.00 in their pockets.
1964 Dad told me he could
have bought all the land from Orlando to Daytona for a dollar and a half an
acre in 1938. I asked my dad why he had not bought land. His answer: "I did
not have $1.50 and the banks were broke.
1970-2003 Real property
values and rental rates generated steady growth and returns. This, in
combination with creativity, hard work and planning, resulted in excellent
returns with minimum risk.
2003-2006 Insanity of buyers and lenders,
fueled by government policies and agencies (Freddie Mac and Fannie May) in
concert with Wall Street, flooded the market with funny money. This caused
insane inflation in real estate prices. During this time, prices being paid for
real estate by speculators made real estate investment (not speculation)
impossible. The income generated by the property was insufficient to provide a
reasonable return on outrageous purchase prices being paid by the
speculators.
2007-2008 The bubble of insanity burst. The banks went
bust and would no longer make loans.
2009It's 1938
again!
So what has this to do with the future of our
families, children and grandchildren?
To protect their future from out of control inflation we must invest in commodities and be out of excess
cash positions. We must generate income higher than the banks will pay with
good security of our capital. Real estate bought at or close to the bottom of
the market, where we are now, which generates rental income is one of the best
commodities available. While I am not finding land for $1.50 an acre, I am
finding opportunities daily that I have never seen in my 38 years in the real
estate investment and management business (actually 50 years if you count the
years I was dad's helper.)