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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,
I love 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 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.

How 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.

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 perform terribly.

The romance of cities yet to be discovered: A dear friend of my daughter, Patrick Buchanan emails me:
I decided 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, I’ve 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 you’ve got some great companies that are increasing their hiring (Kohl’s, Artisan Partners, Harley Davidson, Rockwell Automation, GE Healthcare, Joy Global, etc.). I’m 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 condo’s, 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. Here’s some links in case you want to look into any of it: Kilbourn Towers, Waterfront-Condominiums, 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 it’s 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 wasn’t much of a businessman and I couldn’t get a price out of him for what he’d sell it for. Things aren’t 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 doesn’t turn down again.

Top ten states for retirement: States charge oodles in local tax. Bloomberg Wealth Manager magazine cranked several family finance scenarios through tax software and figured:

The Top Ten
1. Hawaii
2. Wyoming
3. Delaware
4. Alabama
5. Louisiana
6. Nevada
7. Alaska
8. Colorado
9. Washington
10 Arizona
The Bottom Ten:
51. Wisconsin
50. Nebraska
49. Kansas
48. Idaho
47. New York
46. Maine
45. Illinois
44. Minnesota
43. Missouri
42. Texas

I'm pleased there are four states worse than New York. I figured we'd come in dead last. I can breathe easier.

New 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 Puma’s 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 only; 212-334-7861).

The French Tennis Open is on. It's on ESPN2. It's engrossing. My favorite three players:

Roger Federer, Switzerland

Justine Henin-Hardenne, Belgium

Rafael Nadal,

The 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.

Without hesitating, the dean selects infinite wisdom.

"Done!" 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."

Who did you marry?
A 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."

Passenger: "Who?"

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 single time."

Passenger: "There are always a few clouds over everybody."

Cabbie: "Not 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."

Passenger: "Sounds like he was something, huh?"

Cabbie: "He 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."

Passenger: "Wow, some guy eh?

Cabbie: "He always knew the quickest way to go in traffic and avoid traffic jams, not like me, I always seem to get into them"

Passenger: "Mmm, not many like that around"

Cabbie: "And 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."

Passenger: "An amazing fellow. How did you meet him?"

Cabbie: "Well, I never actually met Mike."

Passenger: "Then how do you know so much about him?"

Cabbie: "I married his widow!"

Harry Newton

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 . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads. Thus I cannot endorse any, though some look mighty interesting. If you click on a link, Google may send me money. That money will help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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