Pisa's Picks

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Well, funny you should ask. Here in Chicago where I live, a new Trump Tower went up in 2007. When they were selling units there was such a strong demand initially. So much so that Trump Tower bought back a huge percentage of the units they had sold thinking they sold them too cheap. They figured, let's buy them back and sell them at even more expensive price. Well, it just so happened that this "idea" turned out to be the buildings undoing. Currently, more than HALF of the units are left unoccupied. There's a restaurant along the Chicago River (which the Trump overlooks) that my wife and I were eating at just yesterday. It was amazing to us to look at the Trump and notice that probably 20% of the entire building had lights on, keep in mind this was around 8 pm so it wasn't as if people were just sleeping. I actually know of a couple families who are seriously considering buying units there because the prices are so depressed due to the real estate blunder the Trump group made when they bought back all the units. Personally, I believe that land is an undervalued asset right now. If you look at the Case-Schiller Home Price Index you can see that housing prices have pretty much fallen back towards where they should be according to the model. As a matter of fact, if prices continue to drop, prices will actually fall below the average price indicated on the model, representing what could be a very very profitable opportunity for savvy investors who can afford to wait a few years for a return. I don't much about REIT's or even many equities in the housing/homebuilder sector. I'm of the belief that condo's in high rise buildings are the new home in the suburbs, as alot of these luxurious condo's offer all the amenities one could think of. Living in one myself, with a gym, grocery store, movie theater, shopping center, out door patios, lounge area, we have a hard time figuring out why we ever need to leave, lol. If you're interested in a really great book that is the foundation for my thinking when it comes to real estate investing check out "The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It," by Robert Schiller. Hope you had a good weekend Shank and everyone, looking forward to a new week over here

pisa