Contrarian Value Ideas

[gfp927z]

Derf, Thanks. That sounds like a great approach, investing with a friend who is experienced in real estate investing and management. Warehouses have been one of the better REIT subsectors, and as you said, they have many advantages over residential and office space.

In the early 1990s I looked into buying an office building with 6 suites, which would have been a great investment. The tenants were a dentist, an eye doctor, a title company, insurance broker, and several others. I knew hardly anything about managing properties, but planned to move into the dental suite when its lease was up, and the other 5 suites would produce steady income. Seemed like a great idea, but the ADA - 'American with Disabilities Act' had just been passed, so the risk was having to put in ramps, wheelchair accessible bathrooms, etc. So I didn't buy the property, but later it turned out that existing structures were not required to make those changes to comply with the ADA. That building was in a great location and only $365 K, so a big mistake not buying it.

One current idea is to get a condo at the NJ shore, which is only an hour or so away, so that probably makes the most sense. They aren't cheap, but I could get a smaller one. One of my friends from school bought a shore place several years ago and lives there all year.

You mentioned undeveloped land, but that seems like a highly specialized area, with land use restrictions getting stricter all the time. Some people I talked to said that if you have raw land, it's best to develop it now before the laws change. A comparatively safe way to get undeveloped land is as part of a home purchase, say a property on 3, 5, 10 acres. Even then though, the risk is that a portion gets characterized as a protected 'wetland', and then can't be developed, subdivided, etc.

I guess there's always REITS, though as you said, they move with the broader stock market, so not really the most effective diversification tool. I have some (below), but am still underweight the sector. It was flat / down for several years, then had the big bounce before I could get back in, but still own some -


Cavco Industries (CVCO) - Factory built homes (3 Bil)

Cube Smart (CUBE) - Self storage facilities REIT (12 Bil)

D.R. Horton (DHI) - Residential home construction (61 Bil)

Extra Space Storage (EXR) - Self storage facilities REIT (38 Bil)

Gladstone Land (LAND) - Farmland REIT (528 mil)

iShares US Home Construction ETF (ITB) (0.4%)

NVR Inc (NVR) - Residential home construction (28 Bil)

SPDR Real Estate Select ETF (XLRE) (0.10%)

STAG Industrial (STAG) - Industrial properties REIT (8 Bil)

Lamar Advertising (LAMR) - Roadside advertising billboards REIT (13 Bil)

PulteGroup (PHM) - Residential home construction (27 Bil)


Real Estate Sector -

https://investorshub.advfn.com/Real-Estate-Sector-Ideas-25809



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