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June 18, 2011


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Marotta gets a thumbs up from me on this one.

Great post, I wasn't aware of the REIT ETF's out there.


Don't understand this post. Real estate has still been dropping. If you purchased in 2009 or even 2010, you are likely down another 10%, maybe more, depending on the locale. In Los Angeles, YOY sales are down almost 20%, and prices have dropped 8% -- in just one year. Don't even get me started on Michigan, Nevada, and Florida, where people who bought in the last couple of years have watched their equity erode. Vegas may never come back, at least not in our lifetimes.

Further, a significant majority of housing activity is (a) short sales, (b) foreclosures, and (c) FHA loans, which require only a small percent down, just like the "bubble loans" that got us into this mess in the first place. These are not signs of a recovery or healthy housing market.

Good post, but I got a bit confused/annoyed with all of the "last year I told you" references.

@Mike, there are numerous Reit ETFs, as well as many traditional mutual funds. The REITs I track are: FNIO FRI FRL FTY ICF IFNA IYR KBWY PSR REM REZ RTL RWR VNQ VQNI and WREI

@Jack, REITs have not necessarily tracked housing prices. VQN is up 31% for the 12 months ended May 31, compared to the S&Ps 25.8%. Year to date hasn't been to shabby either at 14%. See:

Kasey, what are the factors that impact the valuation price of a REIT ETF? They are effectively paying out rental income vs fixed expenses such as their own mortgages- shouldn't the underlying price only climb by the level of net cash accumulation from the rentals or only single digit percentage a year?

Thanks for listing out the other REIT's you track.


Real estate is not for everyone, and everyone is not getting into real estate due to the complexities involved with it (in current times).

I have been investing in RE for almost 3 years now and it has been a phenomenally great ride for me.

I buy government homes in decent (but not perfect shape), and give it TLC PLUS (plus is in caps for a reason) with my contractor team, and then rent them out.

Bottom line, it yields me 16% to 29% returns on the home, including the investment of closing costs, fix-ups and inspection readiness. This is way better than my CD. To achieve this, I have to put in approx 40 hours a MONTH on it, which keeps me physically active in running back and forth to the store to shop for materials and also to meet with tenants.

From a detailed point of view, it has be rewarding to buy the government listed properties (with a lot of pain), bid on them, and try and win against other investors. Winning them needs a skill, and going through the complex process needs a great lawyer. In addition, working with low cost contractors is the key where I pay them labor and I buy all of the materials. Searching for tenants is easy these days with a board/sign, and then screening them. Dealing with the BS of some tenants is part of the game. If you were doing a 2nd job a property manager, would you be ready to deal with it? That is the question to ask. And, if someone paid you $20 per hour for your spare time, would you do it? I said YES to myself, and I am now paying myself.

In approx 2 weeks, I will be netting $36K per year NET-NET before taxes on my 4 properties. So, is this worth it for you? That is the question to ask. If yes, then go for it and be ready to put in your hard earned dough to work. If no, then at least buy yourself a great home at these low valuations (if you are renting). It will be WORTH your while.


I started buying houses for $1,000 or less in Detroit 2 months ago. Now I am worth $10 million dollars. I'd recommend anyone else doing the same. I'm rich!! Working is for suckers.

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