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December 30, 2009 at 2:15 PM #498885December 30, 2009 at 2:34 PM #498005
CA renter
ParticipantI agree with you about the risk, socratt. That being said, 2009 was my worst year for returns (~3.5% total) because I largely exited out of everything in October 2008 (mostly as a short seller), because it was obvious markets were not going to behave rationally due to all the manipulation.
The problem with the Fed’s ZIRP program, is that it causes normally conservative investors to go much further out on the risk curve. I’ve always been a control freak when it comes to managing our money, and have stayed away from wealth managers, hedge funds, etc. because I like to control everything on a day-to-day basis. Now, I’m finding myself re-evaluating everything because conservative investors are getting creamed in this current environment.
This is exactly what the Fed wants, and this is exactly why we’re in the mess we’re in. Any conservative fixed-income investors (seniors, pension funds, etc.) have been slaughtered this past decade. BTW, this is one of the biggest reasons Cal-PERS is in trouble, IMHO. It’s only partially due to “overly-generous” pensions. They’ve not been able to attain their forecasted returns due to the low interest rate environment, because low interest rates cause the mispricing of risk and force investors to take on more risky investments. They’ve made some risky choices because they were left with no options, and now many of those investments have blown up.
December 30, 2009 at 2:34 PM #498159ParticipantI agree with you about the risk, socratt. That being said, 2009 was my worst year for returns (~3.5% total) because I largely exited out of everything in October 2008 (mostly as a short seller), because it was obvious markets were not going to behave rationally due to all the manipulation.
The problem with the Fed’s ZIRP program, is that it causes normally conservative investors to go much further out on the risk curve. I’ve always been a control freak when it comes to managing our money, and have stayed away from wealth managers, hedge funds, etc. because I like to control everything on a day-to-day basis. Now, I’m finding myself re-evaluating everything because conservative investors are getting creamed in this current environment.
This is exactly what the Fed wants, and this is exactly why we’re in the mess we’re in. Any conservative fixed-income investors (seniors, pension funds, etc.) have been slaughtered this past decade. BTW, this is one of the biggest reasons Cal-PERS is in trouble, IMHO. It’s only partially due to “overly-generous” pensions. They’ve not been able to attain their forecasted returns due to the low interest rate environment, because low interest rates cause the mispricing of risk and force investors to take on more risky investments. They’ve made some risky choices because they were left with no options, and now many of those investments have blown up.
December 30, 2009 at 2:34 PM #498551ParticipantI agree with you about the risk, socratt. That being said, 2009 was my worst year for returns (~3.5% total) because I largely exited out of everything in October 2008 (mostly as a short seller), because it was obvious markets were not going to behave rationally due to all the manipulation.
The problem with the Fed’s ZIRP program, is that it causes normally conservative investors to go much further out on the risk curve. I’ve always been a control freak when it comes to managing our money, and have stayed away from wealth managers, hedge funds, etc. because I like to control everything on a day-to-day basis. Now, I’m finding myself re-evaluating everything because conservative investors are getting creamed in this current environment.
This is exactly what the Fed wants, and this is exactly why we’re in the mess we’re in. Any conservative fixed-income investors (seniors, pension funds, etc.) have been slaughtered this past decade. BTW, this is one of the biggest reasons Cal-PERS is in trouble, IMHO. It’s only partially due to “overly-generous” pensions. They’ve not been able to attain their forecasted returns due to the low interest rate environment, because low interest rates cause the mispricing of risk and force investors to take on more risky investments. They’ve made some risky choices because they were left with no options, and now many of those investments have blown up.
December 30, 2009 at 2:34 PM #498642ParticipantI agree with you about the risk, socratt. That being said, 2009 was my worst year for returns (~3.5% total) because I largely exited out of everything in October 2008 (mostly as a short seller), because it was obvious markets were not going to behave rationally due to all the manipulation.
The problem with the Fed’s ZIRP program, is that it causes normally conservative investors to go much further out on the risk curve. I’ve always been a control freak when it comes to managing our money, and have stayed away from wealth managers, hedge funds, etc. because I like to control everything on a day-to-day basis. Now, I’m finding myself re-evaluating everything because conservative investors are getting creamed in this current environment.
This is exactly what the Fed wants, and this is exactly why we’re in the mess we’re in. Any conservative fixed-income investors (seniors, pension funds, etc.) have been slaughtered this past decade. BTW, this is one of the biggest reasons Cal-PERS is in trouble, IMHO. It’s only partially due to “overly-generous” pensions. They’ve not been able to attain their forecasted returns due to the low interest rate environment, because low interest rates cause the mispricing of risk and force investors to take on more risky investments. They’ve made some risky choices because they were left with no options, and now many of those investments have blown up.
December 30, 2009 at 2:34 PM #498890ParticipantI agree with you about the risk, socratt. That being said, 2009 was my worst year for returns (~3.5% total) because I largely exited out of everything in October 2008 (mostly as a short seller), because it was obvious markets were not going to behave rationally due to all the manipulation.
The problem with the Fed’s ZIRP program, is that it causes normally conservative investors to go much further out on the risk curve. I’ve always been a control freak when it comes to managing our money, and have stayed away from wealth managers, hedge funds, etc. because I like to control everything on a day-to-day basis. Now, I’m finding myself re-evaluating everything because conservative investors are getting creamed in this current environment.
This is exactly what the Fed wants, and this is exactly why we’re in the mess we’re in. Any conservative fixed-income investors (seniors, pension funds, etc.) have been slaughtered this past decade. BTW, this is one of the biggest reasons Cal-PERS is in trouble, IMHO. It’s only partially due to “overly-generous” pensions. They’ve not been able to attain their forecasted returns due to the low interest rate environment, because low interest rates cause the mispricing of risk and force investors to take on more risky investments. They’ve made some risky choices because they were left with no options, and now many of those investments have blown up.
December 30, 2009 at 5:28 PM #49803034f3f3f
Participant[quote=clearfund]Not sure who this group is, however, If you know what you are doing you can achieve very high returns averaging in excess of 20%/year based on a reasonable workout. Given the size of the loan purchases, and the need to diversify, the best approach is to invest via a fund or pooled investment with an experienced management team.
With our funds/clients we have been buying non performing loans (mainly commercial property) in CA/AZ/NV and performing loans at steep discounts to the unpaid balance (these get us high current yield). Examples: Office building in Phoenix $8mm NON PERFORMING loan for $2mm; $4mm PERFORMING loan for $2.5mm
It is the best way to access the property market at a good discount to value and avoid the games/competition at the ‘retail’ level. We only buy ‘off market’ loans from local/regional lenders as the values are best.
2010 will be the sweet spot for buying loans at a sizable discount to the underlying property’s current value…[/quote]
When you say access the property, do you mean take title, and is that your goal?
December 30, 2009 at 5:28 PM #498183Participant[quote=clearfund]Not sure who this group is, however, If you know what you are doing you can achieve very high returns averaging in excess of 20%/year based on a reasonable workout. Given the size of the loan purchases, and the need to diversify, the best approach is to invest via a fund or pooled investment with an experienced management team.
With our funds/clients we have been buying non performing loans (mainly commercial property) in CA/AZ/NV and performing loans at steep discounts to the unpaid balance (these get us high current yield). Examples: Office building in Phoenix $8mm NON PERFORMING loan for $2mm; $4mm PERFORMING loan for $2.5mm
It is the best way to access the property market at a good discount to value and avoid the games/competition at the ‘retail’ level. We only buy ‘off market’ loans from local/regional lenders as the values are best.
2010 will be the sweet spot for buying loans at a sizable discount to the underlying property’s current value…[/quote]
When you say access the property, do you mean take title, and is that your goal?
December 30, 2009 at 5:28 PM #498576Participant[quote=clearfund]Not sure who this group is, however, If you know what you are doing you can achieve very high returns averaging in excess of 20%/year based on a reasonable workout. Given the size of the loan purchases, and the need to diversify, the best approach is to invest via a fund or pooled investment with an experienced management team.
With our funds/clients we have been buying non performing loans (mainly commercial property) in CA/AZ/NV and performing loans at steep discounts to the unpaid balance (these get us high current yield). Examples: Office building in Phoenix $8mm NON PERFORMING loan for $2mm; $4mm PERFORMING loan for $2.5mm
It is the best way to access the property market at a good discount to value and avoid the games/competition at the ‘retail’ level. We only buy ‘off market’ loans from local/regional lenders as the values are best.
2010 will be the sweet spot for buying loans at a sizable discount to the underlying property’s current value…[/quote]
When you say access the property, do you mean take title, and is that your goal?
December 30, 2009 at 5:28 PM #498668Participant[quote=clearfund]Not sure who this group is, however, If you know what you are doing you can achieve very high returns averaging in excess of 20%/year based on a reasonable workout. Given the size of the loan purchases, and the need to diversify, the best approach is to invest via a fund or pooled investment with an experienced management team.
With our funds/clients we have been buying non performing loans (mainly commercial property) in CA/AZ/NV and performing loans at steep discounts to the unpaid balance (these get us high current yield). Examples: Office building in Phoenix $8mm NON PERFORMING loan for $2mm; $4mm PERFORMING loan for $2.5mm
It is the best way to access the property market at a good discount to value and avoid the games/competition at the ‘retail’ level. We only buy ‘off market’ loans from local/regional lenders as the values are best.
2010 will be the sweet spot for buying loans at a sizable discount to the underlying property’s current value…[/quote]
When you say access the property, do you mean take title, and is that your goal?
December 30, 2009 at 5:28 PM #498915Participant[quote=clearfund]Not sure who this group is, however, If you know what you are doing you can achieve very high returns averaging in excess of 20%/year based on a reasonable workout. Given the size of the loan purchases, and the need to diversify, the best approach is to invest via a fund or pooled investment with an experienced management team.
With our funds/clients we have been buying non performing loans (mainly commercial property) in CA/AZ/NV and performing loans at steep discounts to the unpaid balance (these get us high current yield). Examples: Office building in Phoenix $8mm NON PERFORMING loan for $2mm; $4mm PERFORMING loan for $2.5mm
It is the best way to access the property market at a good discount to value and avoid the games/competition at the ‘retail’ level. We only buy ‘off market’ loans from local/regional lenders as the values are best.
2010 will be the sweet spot for buying loans at a sizable discount to the underlying property’s current value…[/quote]
When you say access the property, do you mean take title, and is that your goal?
December 31, 2009 at 12:08 PM #498181Jumby
ParticipantWhat are you talking about? What do interest rates have to do with this? Could they raise and further press down values? Sure….but you are missing the point…investing in non performing notes allows you to buy non performing loans from the bank, you then own the real estate for a fraction of what was owed on it…and with nothing but foreclosures in the pipe, it is a very wise time to be on top of this…like I said earlier, I brokered a $1.5 million NPN, the investor is going to see a huge return on his money, the key is finding the banks that have NPNs (ALOT) and making sure you aren’t overpaying…
December 31, 2009 at 12:08 PM #498334ParticipantWhat are you talking about? What do interest rates have to do with this? Could they raise and further press down values? Sure….but you are missing the point…investing in non performing notes allows you to buy non performing loans from the bank, you then own the real estate for a fraction of what was owed on it…and with nothing but foreclosures in the pipe, it is a very wise time to be on top of this…like I said earlier, I brokered a $1.5 million NPN, the investor is going to see a huge return on his money, the key is finding the banks that have NPNs (ALOT) and making sure you aren’t overpaying…
December 31, 2009 at 12:08 PM #498726ParticipantWhat are you talking about? What do interest rates have to do with this? Could they raise and further press down values? Sure….but you are missing the point…investing in non performing notes allows you to buy non performing loans from the bank, you then own the real estate for a fraction of what was owed on it…and with nothing but foreclosures in the pipe, it is a very wise time to be on top of this…like I said earlier, I brokered a $1.5 million NPN, the investor is going to see a huge return on his money, the key is finding the banks that have NPNs (ALOT) and making sure you aren’t overpaying…
December 31, 2009 at 12:08 PM #498818ParticipantWhat are you talking about? What do interest rates have to do with this? Could they raise and further press down values? Sure….but you are missing the point…investing in non performing notes allows you to buy non performing loans from the bank, you then own the real estate for a fraction of what was owed on it…and with nothing but foreclosures in the pipe, it is a very wise time to be on top of this…like I said earlier, I brokered a $1.5 million NPN, the investor is going to see a huge return on his money, the key is finding the banks that have NPNs (ALOT) and making sure you aren’t overpaying…
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