Has anyone been watching the news lately? Me neither. I don't watch the news because they don't give me information for what I need to be successful. I don't need doom and gloom in my life. While not watching the news or reading the newspaper, I still manage to get all the relevant information and make great business decisions. Yes, I do know about the financial market meltdown and what's going on and that's what I want to discuss here. This is something that will affect all of us and brings up a great question, "Where is your money invested?". But before we get to that…
Here's a great article on the AIG Bailout might work well for taxpayers explaining that the government lending $85 Billion to AIG might not increase taxes because they're charging a high interest rate. My question is, who is deciding whether this is a good investment for the government to make? It may work out to be a wash or a good investment for the government but at what risk? What if AIG can't pay the funds back? They say that there may have been as much as $190 Billion in losses in the market if AIG failed. That's a lot but honestly couldn't that be a lot better scenario then lending money to a company that has proven that they can't run their business effectively for a stake in their company and a high interest rate? I run a real estate investment company and am not an economic analyst so I guess I can only ask questions. Here's some more good information on the AIG Financial Crisis.
Now, AIG isn't the only financial company that is having issues. There have been multiple companies that have failed or have needed buyouts to stay in business. This leaves a lot of uncertainty in the market and when there is uncertainty in the market, investors get scared. People sell stocks, don't invest as much money, and the stock market falls. Where is your money invested? Please don't think I'm reverting and trying to spread doom and gloom because that's the last thing I'm going to do. This is what's going on and it's going to take awhile for the financial markets to get figured out. That's a fact. The big question now is, "Where are you going to invest your money?"
Before this financial mess, you could have called me biased for saying that real estate is a much better investment if you didn't really look into the facts. Now the comparison is almost too easy. Before I could tell you that you're going to get a much higher rate of return, get tax advantaged income, and have real assets. Now, I'm going to tell you the same except the disparity is much greater. It's not that you're going to make a little more on your investment, it's that you're going to make a great Return on Investment and NOT LOSE MONEY! If you just pay cash for a Detroit Cash Flow Property to get it purchased, rehabbed, and rented out, you're going to make a 15%-20% Cash on Cash return. If you refinance your cash and get a little out, your return becomes infinite after the first year. Talk about security as well. You invest in excellent built properties in stable areas of Detroit for an all-in investment of $35,000 that comes back with a conservative appraisal of $80,000 to $110,000. We're talking about retail sales on the same street!
Let me ask you again, where is your money invested? If you have an IRA or another retirement interest, ask me how you can get that money invested into real estate ASAP! Using Self-Directed IRA Companies allow you to invest your money in whatever you would like (as long as it fits the Self-Directed IRA Guidelines). Yes, this also includes investing in real estate! If you currently have funds invested in the stock market or other financial instruments, do yourself a favor and look into self-directed IRAs so you can get invested in something that is tax advantaged, has great annual returns, and has great upside potential. Contact us if you have any questions on how to get started.
MARK YOUR CALENDAR FOR WCRT DETROIT
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WCRT Detroit Website
September's meeting was a rousing success. Herb Strather gave a fantastic talk that kept the large turn out on the edge of their seats! Don't let the next informative and fun meeting pass
you by. Our next meeting will take place Tuesday, October 7, 2008, at the
Peking House 2nd floor, 215 South Washington, in Royal Oak, MI.
Peking House website Our October speaker will be announced shortly, check the
WCRT website for details and updates.
Jared Pomranky ~ Detroit Investment Properties
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