Thursday, April 07, 2005

Real estate investing gaining in popularity


But experts are concerned about a housing bubble

By Bertha Coombs
Reporter
CNBC


He’s a roofer and she owns a hair salon, and now Paul and Caren Matera are applying their entrepreneurial skills to New York’s red-hot housing market.

After attending a $3,000 real estate seminar, last July the Materas bought a little bungalow on Long Island. They sold it two months later and made a 50 percent profit. Since then, the couple has taken equity from their own home and invested in a half dozen properties now worth over $1 million — much of it pre-construction properties in red hot Florida developments.

The Materas’ story is not uncommon. In some of the hottest housing markets in the country, like New York and California, the booming real-estate market is not only luring more Americans into home ownership, it’s also luring many ordinary Americans to invest in real estate.

Hard statistics are tough to come by, but one in six purchasers surveyed by the California Association of Realtors in 2004 said they were purchasing a home as an investment or for tax purposes — that’s a record 16.2 percent.

Ordinary real-estate investors aren't necessarily looking to be the next Donald Trump, but many of them are seeking profits in far-flung parts of the country. And their growing interest in real estate investments may explain why membership in real estate investment groups, like EmeryNet in the San Francisco Bay Area, is booming.

Members of the group share strategies and leads on finding properties and get expert advice on financing from guest speakers. Most of these Californian real-estate investors are looking for investments beyond the Golden Gate.

Group member Tessie Cuy says she can buy real estate outside California for less than in her own home town. And Doug Boggs, another investment club member, says he is focusing on investments in the Sun Belt region: The southern and southwestern states of the U.S.

“Florida, Arizona and Vegas — that’s where everybody else is going too. It’s kind of like the stock market, really,” said Boggs.

That sort of attitude worries William J. Poorvu, a former Harvard Business School professor and author of “The Real Estate Game,” a guide to developing and investing in real estate.

“If you think you’re just buying a lottery ticket and putting down the amount of money you’re willing to lose, that's one thing,” said Poorvu. “If you’re investing your savings in something like this, I think you are making a mistake.”

So far, Paul and Caren Matera haven’t seen any slip-ups in their real estate investments, but that doesn’t mean the roofer isn’t losing sleep over his retirement dreams.

“Every time you close on a deal, you lie in bed worrying at night,” said Paul Matera. “I don’t know how my wife sleeps at night. She sleeps pretty soundly while I’m lying there awake.”

1 Comments:

At 3:21 PM, Blogger William said...

Keep up the good work and continue posting great information. I have a website that I think you will find of particular interest.

coldwell banker real estate

 

Post a Comment

<< Home