The Mighty U.S Dollar

The U.S. Dollar, (USD) is dropping faster than most of us can remember, and the Canadian Dollar, (CAD) is higher than I have seen since I first started tracking exchange rates seven years ago. With Canada, one of our closest neighbors it pays to take notice to what’s going on. Three years ago I joined an investment club called the Freedom Investment Club out of Vancouver, Canada. The head of the club is Mike Lathigee. Mike was telling us three years ago the the USD was going to be par with the CAD around 2007, and he was right. He also told us that we had better prepare for it by buying investments that would do well in this situation like gold, silver, oil, and other commodities. He also spoke of buying real estate in Canada when the CAD was worth around 85 cents to the mighty USD. As of today the USD at 93 cents to the CAD which means it takes $1.07 USD to buy one CAD. I was shocked how quickly the CAD caught up to the USD and then passed us by. Where it will stop I don’t know, but I’m glad I bought into Freedom Investment Clubs’ real estate fund in Canada. What I want investors to know is that you have got to put some of your wealth in investments that will shield the falling USD. It’s up to you to find out what that might be as I am not a financial advisor. What I have been doing is buying gold and silver, and real estate in New Zealand and Canada. I have also bought exchange traded funds holding gold, silver and oil. These are stock funds that buy large amounts of any given commodity or foreign currency and sell shares of it. This way you don’t have to hold a large amount of metals, oil or currency in your safe deposit box or home. Do yourself a favor and start investigating these investments to keep your net worth growing while the USD is shrinking.

Denver Real Estate is Ripe for the Pickin'

There is a lot of activity in the Denver, Colorado area indicating it is getting close to the best time to buy. We haven’t seen an opportunity like this since the savings and loan crisis of the mid 1980’s. Houses are being bought for 60 cents on the dollar in many areas of Denver. As foreclosed properties flood the MLS it’s clear that banks are starting to discount houses enough to get seasoned investors interested. There are so many bank owned properties available it’s the kid in the candy store situation where you can get overwhelmed. I saw an older three bedroom, two bath home in Lakewood built in 1892 on a large lot for $184,900. A house with character like this fixed up could easily sell for $350,000 due to the neighborhood and large yard. This market is great for a buy and hold strategy or for bird dogs to find and flip to rehabbers. Take a look and see how you might make money in the Denver real estate market, and don’t be surprised if a realtor or investor tells you this is a terrible market. That’s what they were saying in 1988 when several smart investors were buying all the houses they could. Those savy investors made huge profits and you can too!

New Zealand Real Estate

It’s not too late to invest in New Zealand even though the New Zealand Dollar has gained more than 10% on the U.S. Dollar over the last 30 days. The U.S. Dollar(USD) is predicted to continue losing ground to the New Zealand Dollar(NZD) for the next few years. You can protect your hard earned USD’s by investing in one of several foreign markets, gold, silver or maybe even oil. My favorite of these is foreign real estate, and my favorite place is in New Zealand. If you would have bought real estate there five years ago the property would have doubled or more in Queenstown, Auckland, Gisborne and several other areas. In that same time the NZD gained on the USD from 47 cents U.S. to 76 cents to buy a NZD. I believe there are still many deals to be had to where five years from now you will be happy to have bought property in New Zealand. Just last week I read in the NZ Property Magazine that two markets had doubled or tripled in the last three years. One of them on the North Island and the other on the South Island. Catching an emerging market is one of the best ways to profit in real estate and there are still emerging markets to catch in New Zealand.

What if the Bubble is Real

If the bubble is real and real estate values tumble across the country one thing is for sure, people will still need housing of some sort. So how do you as a real estate investor profit in this type of climate. I think it's more important than ever to be positioned in a hot market. Sure the overall US market will have an effect on a hot market like Provo Utah for example, but if the economy stays strong in Provo then we investors should still be able to make a profit there and in other hot markets. There are still several hot markets in the US to invest in.
You should also consider buying silver, gold, foreign currencies and other investments your financial adviser can help you with. To have part of your wealth in investments that protect you from our falling US dollar is just plain smart. It also allows you to convert back to cash when the bargains appear in the next year or two.
I also like foreign investing more than ever. My properties in Costa Rica and New Zealand are appreciating well and should continue to do so. At the very least I expect them to hold steady if the US market goes down further. I encourage real estate investors here in North America to investigate opportunities in South America, Central America, Australia, New Zealand and Europe to diversify their real estate portfolios. My favorite resources for researching foreign real estate are internationalliving.com and escapeartist.com. These sites report weekly covering several foreign countries on subjects such as, affordability, safety, health care, quality of life, real estate investing,and other criteria. Many North Americans have profited in foreign investing and will continue to do so. In the near future I will be organizing a buying tour of New Zealand. If you are interested in this tour please email me at Kurt@realestatesolutionevolution.com for more info.

Remember, in any market there is money to be made, you just have to figure out how the playing field has changed.

researching emerging markets

The telephone is a great tool for researching new markets to invest in. Here are some of the questions I ask realtors and economic developement staff.

Questions to Ask Realtors to determine if you have found an emerging market to invest in.

1. Is your market a buyers or sellers market? { if it’s a sellers market when did it change from a buyer’s market to a seller’s market}.


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2. Is your market appreciating? {if it’s appreciating how much and what’s the source of information}
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3. What is the inventory of unsold homes on your MLS now? What was it 6 months and 12 months ago?
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4. Where are the buyers coming from? {we want to know if the buyer’s are mostly from out of state coming for the new or expanding job opportunities.}
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5. What is the most sought after property, { you need to know what type of property is in demand to position yourself with the easiest to sell property}.
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6. When did your market start to change from a buyer’s market to a seller’s market, or visa versa? { you want to know how long the market has been in it’s current phase}.

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7. Which direction is the growth heading? {you want to determine where to purchase in the path of future growth}.
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8. Have you seen new employers come to town? Have you seen existing employers expand their operations in your town?
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Questions for Economic Development Agencies to determine if you have an emerging market to invest in.

1. How many jobs were created in your MSA,{metropolitan statistical area} in the last year?

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2. What type of jobs were created,{You need to know what type of jobs were created to determine the average income for the workers. This helps you know what price range of homes the new employees will be looking for}.
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3. Do local politics help or hinder growth in your MSA, {You want to know if there has been legislation passed to give tax breaks to new employers to entice them to relocate}.
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Mortgage Brokers

Be very careful chosing a mortgage broker as they are not all alike. They need to know how to communicate effectively with the underwriters and get the job done. When looking for a good mortgage broker make sure they have 10 years or more in the business and work extensively with investors. Also demand good customer service. If they are hard to get in touch with or don't return calls there is someone else out there that will. It's getting harder to borrow money thanks to all the foreclosures. Real estate investors need to be sharper than ever to get the job done.

Salt Lake City market continues upward

The Salt Lake City market continues to amaze me with it's appreciation gain. The four bedroom, two and a half bath two car garage pre-construction home I bought in September of 2006 has gone from $259,000 to $345,000 in nine months. St George Utah is even hotter. If you are considering buying in either of these markets be sure to do your research. Find out what areas and what type of properties are in demand in these hot markets. Use realtor.com to find listing agents and ask several of them what they think is the best property to buy and what are other investors buying. Be sure and start out the conversation with " I'm calling about your listing I saw on realtor.com, could you please tell me about it"? Then you can transition into market questions.
Good luck!