8:30 AM Wednesday, June 1, 2005: I
like real estate with a story. That's my way of saying there's some reason why
the property is cheap compared to other similar ones nearby. My friend Larry Nusbaum
is a broker/investor in Phoenix. He writes,
to buy homes from sellers who are going through a divorce! The husband had nowhere
to go and didn't want to be out of his beautiful home!.He also would not allow
it to be put on the MLS (multiple listing service) and be shown to the world.
I ran comps (comparables) and discovered that they wanted about 25% under the
market, so I made an offer contingent on him renting back for one year. He jumped
at the offer and I had my renter. I insisted the rent be paid up front in escrow.
I will sell when and if he moves someday.
I hear a lot about
institutions wanting to dump a property or two because it no longer "suits
their investment objectives." Foreclosures used to be more interesting
but too many people have discovered the "Fix and Flip" market.
Still, Larry says Firstpreston.com
is a great site for Bank of America foreclosed properties. "I have purchased
from them directly and have been able to turn the properties very quickly. They
maintain the properties while going through foreclosure," says Larry.
hard it is to "play" the market: Last year tanker stocks
were hot. This year everyone is shorting them. Frontline (FRO) is "the
most exposed," according to today's Wall Street Journal. Click
here. I have no idea how you "play" this sort of gyration.
romance of cities yet to be discovered: A dear friend of my daughter,
Patrick Buchanan emails me:
A negative correlation between advertising and performance:
To my brain, the more they advertise, the worse they perform. Two instances:
Superfund ("I'm Christian Bahar") and Dreyfus mutual funds
(with the "strength" of the lion). Both advertise a lot and both
to take a job in Milwaukee so I will be moving back to the Midwest. I spent
the last week in Milwaukee looking at apartments and talking to realtors and
I thought you might be interested to hear a bit about that market. First of
all, Ive found that in Milwaukee you can buy an amazing condo for $300k
and only pay about the same per month in mortgage payments that you would pay
to rent a luxury apartment. This means that unlike Boston, you can
actually buy property in Milwaukee and cover much of your mortgage payment with
rent money if you chose to rent it out. Also, it turns out that Milwaukee is
starting to put up some amazing luxury condo buildings on Lake Michigan, perhaps
building their very own Gold Coast just like in Chicago. I think
that you can get a 10th story lake view in the new Kilbourn Tower with 2600
sq feet of condo space for $750k pretty cheap if Milwaukee keeps developing.
Also, I was told by one realtor that 8 out of 10 of his sales are going to people
from Chicago who are willing to commute from Milwaukee (1hr drive to north suburbs
of Chicago) in return for the 30-40% housing cost reduction and less traffic.
Additionally youve got some great companies that are increasing their
hiring (Kohls, Artisan Partners, Harley Davidson, Rockwell Automation,
GE Healthcare, Joy Global, etc.). Im beginning to think that Milwaukee
could be a great place to invest in real estate. The downside of course is that
there is plenty of old dormant factories available to convert into condos,
which limits supply constraints. Additionally, I was somewhat skeptical of market
demand being able to meet supply given the expansion of condo projects that
appears to be in the works. However, there is limited supply along the Milwaukee
river that runs through downtown and along the coast of Lake Michigan, so that
is where I will eventually look to buy. You can even buy a condo right along
the Milwaukee river near where it empties into Lake Michigan that comes with
2 underground parking spots plus your very own boat slip and probably about
1700 sq. feet of living space plus a huge outdoor balcony for $450k. Heres
some links in case you want to look into any of it: Kilbourn
University Club Tower, and
the Mandel Group.
The biggest upside is to buy an old boarded up building in what is called the
Fifth Ward, a somewhat run down industrial part of Milwaukee that borders on
the Milwaukee river, the third ward, and downtown. The Third Ward used to be
run down and industrial, but is now filled with great condos and reminds me
of the neighborhood in Boston that Ted and Claire (my daughter) live in right
now. The fifth ward is still a little dangerous, but its only a matter
of time before it becomes like the Third Ward. My fiancé lived in a loft
there about 1 year ago, the owner had bought the whole building about 5 years
ago for something like $75,000! At one point, I actually tried to contact him
about buying the building from him but he wasnt much of a businessman
and I couldnt get a price out of him for what hed sell it for. Things
arent nearly that cheap anymore, but you could probably buy a 4 story
boarded up brick building, clean it up, restore it, and convert it into lofts
for a very minimal amount of money, and then sell them in a couple years and
get huge returns as long as the economy doesnt turn down again.
ten states for retirement: States charge oodles in local tax. Bloomberg
Wealth Manager magazine cranked several family finance scenarios through
tax software and figured:
47. New York
I'm pleased there are four states worse than New York. I figured we'd come in
dead last. I can breathe easier.
computers are faster: But the manufacturers are bundling more and
more useless stuff. First step with a new computer is go to Start/Control Panel,
Add/Remove programs and rip out all the stuff you don't need -- like AOL, AT&T
Internet, Microsoft Messenger. Second step is go to Start/Run/msconfig/startup
and uncheck most of the programs. You can always check them back later, if you
find you need them. (You won't.) The fewer programs you run and the less clutter
on your hard disk, the faster and more reliably your PC will run.
Build your own Pumas. I admit. I have a
Puma shoe fetish. My Pumas are my most comfortable shoe. I own four pairs. From
June 6 to July 17, and only at Pumas Soho store in New York, you can build
your own Pumas out of the thirteen components (four shown here) needed to make
a shoe. The completed sneaker arrives four weeks later ($130; by appointment
The French Tennis Open is on. It's on ESPN2.
It's engrossing. My favorite three players:
Roger Federer, Switzerland
Justine Henin-Hardenne, Belgium
money is great:
An angel appears at
a faculty meeting and tells the dean that in return for his unselfish and exemplary
behavior, the Lord will reward him with his choice of infinite wealth, infinite
wisdom, or infinite beauty.
the dean selects infinite wisdom.
says the angel, and disappears in a cloud of smoke and a bolt of lightning.
Now, all heads
turn toward the dean, who sits surrounded by a faint halo of light.
At length, one
of his colleagues whispers, "Say something."
The dean sighs
and says, "I should have taken the money."
did you marry?
man walks into the street and manages to get a taxi just going by. He gets into
the taxi, and the cabbie says, "Perfect timing. You're just like Mike."
Cabbie: Mike Glickman.
There's a guy who did everything right.
Like my coming
along when you needed a cab. It would have happened like that to Mike every
are always a few clouds over everybody."
Mike. He was a terrific athlete. He could have gone on the pro-tour in tennis.
He could golf with the pros. He sang like an opera baritone and danced like
a Broadway star and you should have heard him play the piano."
like he was something, huh?"
had a memory like a computer; could remember everybody's birthday. He knew all
about wine, which foods to order and which fork to eat them with. He could fix
anything. Not like me. I change a fuse, and the whole neighborhood blacks out."
some guy eh?
always knew the quickest way to go in traffic and avoid traffic jams, not like
me, I always seem to get into them"
not many like that around"
he knew how to treat a woman and make her feel good and never answer her back
even if she was in the wrong; and his clothing was always immaculate, shoes
highly polished too."
amazing fellow. How did you meet him?"
I never actually met Mike."
how do you know so much about him?"
married his widow!"
This column is about my personal search for the perfect investment. I don't
give investment advice. For that you have to be registered with regulatory authorities,
which I am not. I am a reporter and an investor. I make my daily column -- Monday
through Friday -- freely available for three reasons: Writing is good for sorting
things out in my brain. Second, the column is research for a book I'm writing
called "In Search of the Perfect Investment." Third, I encourage
my readers to send me their ideas, concerns and experiences. That way we can
all learn together. My email address is .
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