I have two recommendations for you in terms of fairly safe ways to profit from real estate investing in 2009. First, a brief note about what’s happening today:
The stock market is up in a big way today, and I think the underlying reason is interesting.
Today, Wells Fargo announced huge profits for the first quarter. This was unexpected and is apparently due nearly entirely to a huge amount of mortgage originations that Wells completed in the first quarter.
It seems that this could be interpreted in one of two ways:
- The real estate market is *not* improving, and Wells’ profit situation is due to their competitive success
- The real estate market is expanding and recovering, and all the profits at Wells Fargo is one example of that
We don’t know which of those explanations is the correct one, but it appears that the wizards of the stock market (whoever they are) have decided that #2 – a real estate recovery – may be under way. The evidence for this is that all of the major banks (including Wells, JP Morgan, Bank of America, etc) are up quite significantly today, suggesting that a lot of people think the financial results for the first quarter will be broadly better in the banking business than previously expected.
So there’s a positive bit of news for today!
Also – I suspect there might be two good ways to make some money in real estate this year:
- REIT’s – a REIT (real estate investment trust) is like a mutual fund that invests exclusively in real estate and passes the income back through to the owners of the REIT. REIT’s are traded on the stock exchange just like regular stocks. If you’re interested in REIT’s, be sure to check them out very thoroughly, as I expect there will be a massive amount of consolidation as the bigger, healthier REITs gobble up the smaller, sicklier ones at discount prices. This will make for some huge profit opportunities.
- Bulk REO Investing – I’ve been banging the drum on this for several months now. This involves buying GROUPS of foreclosed properties from lenders at a heavily discounted price. (Yes it’s possible to do this even if you don’t have a lot of money yourself…read on.) Bulk REO investing won’t be a big deal for very long, but it certainly is right now. If you’d like some serious training about this – including how to get access to significant funding for your own deals – leave a comment in the box below and let me know.
Thanks for reading RealEstate.BryanEllis.com, and as always your thoughts and comments are welcomed!