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Weekend Edition

One of the greatest investment opportunities in American history
Saturday, November 24, 2012

 We've been urging you to buy residential real estate all year...
Low prices, strong rental yields, and record-low mortgage rates make U.S. housing one of the best investments you can make today.
Our colleagues Steve Sjuggerud, Porter Stansberry, and Dr. David Eifrig are all bullish on the asset. And they're personally investing considerable assets in real estate.
Steve recently bought a property that was under contract for $14.4 million in 2008 for less than $1 million... He also bought a beach condo in Florida for $124,000. Similar units sold for $400,000-plus in 2006. He's going to fix it up, rent it, then sell it.
And Porter has been investing in multi-family units in South Florida, in addition to buying homes in Pennsylvania and Miami.
 According to one of the largest real estate firms in the country... Miami – one of the hardest-hit cities in the downturn – is the place to invest today.
"There's a boom in Miami that we've never seen before," Stephen Ross, chairman and founder of New York-based real estate firm Related Cos., said at the Bloomberg Commercial Real Estate Conference this month. "Miami is probably the hottest real estate market in the U.S. from a residential perspective." 
Related Cos. and several other developers are building amid a shortage of rental properties in Miami... The average rent for a two-bedroom increased 6%, to $2,568 a month, in the third quarter from a year ago.
 Real estate research firm Witten Advisors forecasts Miami-Dade County will add as many as 3,000 rental units per year through 2015 – more than double the average pace of the past three years.
Jonathan Gray, the global head of real estate for Blackstone, also spoke at Bloomberg's conference. He urged investors to buy a home in the next two to three years, before discounts disappear...
"Prices are starting to move faster," Gray said. "That's one of the risks that emerge as more people like us get into the space and as individual homeowner confidence grows. Frankly, buying a home today is pretty compelling." 
 And a slew of new data came out this week confirming that the trend in housing is up...
Purchases of existing homes jumped 2.1% in October to an annual rate of 4.79 million, exceeding expectations. The median price of an existing home increased 11.1% to $178,600 from October 2011 – the biggest year-over-year gain since November 2005.
And inventory is shrinking... Previously owned homes on the market decreased 1.4% to 2.14 million, the fewest since December 2002. At the current sales pace, it would take 5.4 months to clear the inventory, the lowest figure since February 2006.
 Also, homebuilder confidence hit a six-year high in November... The National Association of Home Builders/Wells Fargo sentiment gauge increased from 41 in October to 46 this month, the highest level since May 2006.
Finally, home-improvement retailer Lowe's announced a 76% increase in earnings for the third quarter. Home Depot, the largest retailer in the space, also beat estimates, and hit a new high recently.
"Housing prices have bottomed now on a national basis, and in some markets, you are seeing some good appreciation," Lowe's CEO Robert Niblock said in a telephone interview with Bloomberg. "People are going to feel better about spending on their homes believing that in the future, they're going to be worth the same or more than what they are today." 
 Steve thinks buying single-family homes is the best investment you can make today. Prices are below replacement cost, mortgage rates are at all-time lows, and prices are improving.
But we know most folks can't just buy a house... It requires a lot of capital. So in his latest True Wealth issue, Steve showed readers how to invest in a huge portfolio of residential real estate controlled by one of the best investors in the world.
 In the company's 27-year history, it has generated 28% net annualized returns on realized investments in its global real-estate business. And it sold $60 billion of real-estate assets in 2005-2007.
But since 2009, the company has invested $17.6 billion in real estate. And just this year, it has spent more than $1 billion buying houses. The company is using a "buy it, fix it, sell it" strategy with the homes it's purchasing.
 Steve thinks his readers could make hundreds of percent buying this stock today... It's super-cheap, trading at less than five times forward earnings. And it's one of the best real-estate investors in the world. (Steve is confident in the company's ability to make a fortune on its housing assets.)  
If you're looking for a way to gain exposure to the U.S. real estate market, you should read Steve's latest True Wealth. If you're not a subscriber, you can learn more about Steve's newsletter – and how to access his latest issue – here...
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