Life Isn't Fair...
The Dynamic Wealth Report
April 12, 2010
If you haven’t learned this little secret yet, let me break it to you…
Life isn’t fair. Good people go bad, mistakes can be made, and sometimes
a sure thing turns into a nothing…
I do firmly believe, “When life hands you lemons, make lemonade!”
It’s a great quote and something that applies directly to the stock
market these days. Today I’m going to squeeze some sour lemons. I’ll
explain how some people are unfairly taking advantage of the real estate
market.
Then I’m going to turn it into lemonade. In other words, I’ll show you
how to profit from this little injustice in life.
So here’s what’s going on…
Everyone knows I’ve been closely watching the real estate market for
years. What I recently uncovered falls squarely in the “Life isn’t fair”
category.
Apparently some banks - who should be helping homeowners - are instead
more willing to work out problem loans on commercial properties.
-------------Sponsor-------------
Where Can You Turn $300 Into $1.3 Million Right Now?
Our own small-company specialist, Robert Morris, has found a
way to 'sniff out' tiny penny stocks on the verge of a major breakout. And
the timing for this has never been better.
You see, the system takes advantage of an obscure SEC regulation that
sends penny stock prices through the roof.
We've seen some stocks gain 852%... 5,450%... even 17,496% in no time
flat.
Click here
for the details...
-----------------------------------
Millions of Americans are struggling to make their mortgage payments
every month. But, they can’t get so much as five minutes of their banker’s
time. Many of these homeowners are deeply under water on their homes…
some more than hundreds of thousands of dollars.
And the banks aren’t as accommodating as you’d expect.
The banks are dragging their feet on renegotiating mortgages.
However, if you’re a commercial property owner, you’re in a special
class. The banks are willing to bend over backwards to help you with
your loan.
It reminds me of a saying, “If I owe a million dollars, I am lost. But if
I owe $50 billion, the bankers are lost.”
When you borrow money from the bank, they have you in their grasp. And
that’s what millions of homeowners are realizing. They’re at the mercy
of the banks because of their mortgage.
However, if you owe the banks huge amounts of money, the banks are at
your mercy.
That’s why banks are more willing to work out problems on commercial
loans.
It’s simple math. For every $10 million in commercial loans the bank
works out, it’s the same as dealing with 100 home owners who have
borrowed $100,000.
Clearly the lenders have more at stake. And the negotiations with
commercial property owners are often easier. Clearly life isn’t fair.
This also helps explains why the bottom hasn’t fallen out of the
commercial real estate market.
During my research, I uncovered reports of foreclosure proceedings on
commercial properties being put on hold. The reason? So the bank could
work out a deal with the property owner. Commercial property owners are
seeing things like reductions in interest rates, extension of terms, and
even acceptance of partial payments.
Commercial property loans are very different from home mortgages. While
a home mortgage might be collateralized and sold, banks often own the
commercial loans.
This gives them more flexibility in negotiating and renegotiating terms.
By willingly renegotiating many of the commercial loans, the banks are
keeping a huge number of properties from the market… and away from the
foreclosure gavel. It prevents the market from being flooded with
properties and has helped stabilize commercial property values.
This is the silver lining to the dark cloud. A somewhat stable market is
much better than a market in freefall. And that gives me a trading idea.
With the commercial real estate market somewhat stable, now is a good
time to look at investing in REITs.
I happen to own iShares Dow Jones US Real Estate (IYR). This ETF holds a
number of different REITs. Many of them have exposure to the commercial
real estate market. Since bottoming in early 2009, IYR has climbed
steadily higher. It’s now up more than 100%.
Despite the climb, it still offers an attractive yield of just under 4%.
While I might not agree with the way banks are “working out” loans, I
see no reason why I can’t profit from their activities.
• Tire Industry (Down 4%)
We’re seeing good news about consumer confidence and the automobile
market. Despite this positive news, the tire industry is looking slow to
rebound. Goodyear Tire (GT) is leading the industry lower, losing 5% in
just the last month.
Print
Page
Bookmark Us
Home | Whitelist Us |
Terms of Use |
Privacy Policy |
Contact Us | Security |
Site Map