[quote=pri_dk]Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.[/quote]

I’m not following you here, who’s peddling anything? Seems like a good discussion to me about 1. buying non performing loans from the banks 2. and can residential real estate be considered an investment

I think it’s pretty crazy to say residential can’t be treated as an investment, but like the other posters said, the word is up for interpretation.