GOODBYE 2011

The Moon Comes Up Over Wildwood

Has It Been A Good Year? Not real sure I can answer that one. I lost one of my heros but I got a beautiful great grandson. I have had a large property vacant all year at a cost of about $20,000 but I got about 15% return from my stock portfolio. We had a terrible drought with my lakefront property becoming a mudfront property but the rains came and brought it back to normal in one night that brought almost 7 inches of rainfall. I could go on for quite some time with good and bad but I'm sure you could do the same thing if you thought about it.

The Rich Get Richer And The Poor Get Poorer. From a long-term perspective that's a stupid statement. If you look at the 1950's, it's pretty obvious that the poor are not as poor as they were then. Sure, some of the rich got filthy rich but many of the poor live virtually as well now as the rich did then. But what about short-term. The near depression of 2008 certainly made most of the poor even more so but look at the rich. On average, they didn't become richer. Granted, some did get richer but statistics show that most didn't. Are many executives over paid? Absolutely. Are they being paid too much compared to what they are distributing to shareholders or paying hourly employees? Certainly. But is it worth chainging to a government controlled economy. Not in my opinion. I don't care about the gap between the rich and the poor nearly as much as I care about the opportunity for improved standard of living for the poor. As long as I am better off, it doesn't bother me than many of the rich got even richer.

Adversity Has Its Benefits. This may sound crazy but I sometimes think the success of our nation has to do with the adversity we faced in the early to mid 20th century. Many worked 6 days a week and felt fortunate to have a steady paycheck. Millions suffered the pains of war, from those who went to fight to those former stay-at-home moms who left children with grandparents so they could work in factories to build weapons to fight the enemy. They did what they had to do and there was no free medical care or long-term unemployment benefits. All this reminds me of Thomas Jefferson's statement to the effect that you can't bring opportunities to the poor by taking opportunity from the rich. Although none of my family is wealthy by today's standards, most have done well. The one thing I have observed for the past fifty years is that they have worked like hell for everything they have.

Where Will The Opportunities Be In 2012. Many will dispute this argument. With perfectly good homes being torn down because there are no buyers, it appears that the last place to espect opportunities would be in real estate. While real estate is definitely a regional market, and some markets may not turn around for a long time, places like Colorado are almost certain to improve drastically because of three factors. 1. Low vacancy among rental units points to high occupancy in the future. 2. Record low returns from short-term treasuries and bank instruments make any reliable cash flow stream more attractive. 3. Reduced inventory due to low production of new units has reduced the supply of homes available to buy to record low levels. Over the years, our research has shown that, when inventories reach record low levels a market turnaround is close by.

The Main Problem With Real Estate. Management of real estate can be a huge hassle. I firmly believe that the use of professkonal management is the only way to go for most who want to be real estate investors. Avoiding the hassles of dealing with rent collections, evictions, and maintenance problems is worth the cost of paying for competent management. Call Susan at 303-996-2010 if you want to discuss the possibility of starting or adding to your current real estate investment portfolio.