The Best Time To Invest And The Worst Time To Procrastinate (2)
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The Best Time To Invest And The Worst Time To Procrastinate (2)

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The Best Time To Invest And The Worst Time To Procrastinate (2) Document Transcript

  • 1. The best time to invest and the worst time to procrastinate We are faced today in most major residential markets of the US the question of whether falling prices have reached the point where one could feel it is time to invest, given the conflicting signals in the economy. One could focus on the unemployment figures or the amount of US debt, and the inability for consumers to take on more debt or the increasing amount of foreclosures. All of these might allow you to procrastinate and ponder. There is no ‘signal’ to let you know it’s now time to invest in US Real Estate. David Michelson, as advisor to the US entity for CDLAF, has since 2006 been telling groups of institutional investors that the real estate market was significantly over valued and a significant correction would drive down prices back to per 2002 values. This has been well documented and can be seen by reviewing past articles via Google searches or by asking IGS Group to forward previous communiqués on the outlook for the real estate cycle sent out since 2007. In the advisors opinion the current market has finally reached the point where we are now seeing the cost of ownership is less than the cost of rents, which is a change as of 60 days ago. During each of the past three recessions this was the point where the market found stability and then took several years for the inventories to be absorbed prior to any meaningful price appreciation. One can always question the wisdom of buying, and be cautious to the point that you miss what will prove to be the best opportunity since the 1990’s meltdown. During the last 30 days the articles and statistics have been rather one sided:  The S&P /Case-Shiller Index is up slightly for the first time in three years  New homes sales increased more than forecast by 11% in June over the previous month  On its July cover Newsweek Magazine states the Recession is over  The Wall Street Journal latest quarterly survey of housing related data shows residential real estate is healing  The National Association of Realtors in June reported resale’s up sharply at an increase of 3.6%, the third consecutive month of increasing sales. Mortgage Programs have been modified to provide for incentives to first time buyers making them more consumer friendly  Dean Baker, Co-director of the Center for Economic and Policy Research, indicated the data suggests that “ the free fall in housing is clearly over”  The Federal Reserve’s Beige book reported many regions have begun to stabilize, bolstering hopes of a broader based recovery later this year igs Alternative Investment Solutions LLP 39 King Street, London WC2E 8JS United Kingdom Tel +44 (0)20 7395 6800 Fax +44 (0)20 7395 6801 info@igs-group.co.uk | www.igsgroup.co.uk |Partnership No. OC328876 IGS AIS LLP is a member of the IGS Group Ltd. Authorised and regulated by the Financial Services Authority VAT registered - 918509309
  • 2. We believe that CDLAF has a unique opportunity in the next 12 months to focus its acquisitions on the mostly completed foreclosed residential projects in both single and multifamily housing that have suffered because of the liquidity crisis, but can be repositioned to become successful projects without the need for price appreciation via an approach to bring value back into every aspect of investments in this fund. CDLAF plans to be the “99 cent” real estate fund in that we will focus all of our investments on affordable housing projects, affordable rental projects and inexpensive room rental rates for hotels. We believe the US consumer has been significantly affected by the meltdown in asset values and today has a modified outlook of requiring value in all aspects of their transactions. CDLAF shall determine which projects meet the following conditions:  Strong demographics with stable employment and good future prospects  Inventories falling to levels of normality with some barriers to entry  Clear exit strategy  Compelling affordability (ownership should be cheaper than rents)  Purchase price 50%-75% below peak values CDLAF will follow a very simple plan, by investing in mostly completed projects that can be brought to market and made functional in a timely fashion. We believe that right now is the time to invest - no bell is going to ring any louder than the list of economic and statistical signals we are now seeing. For further information please contact IGS Distribution: distribution@igsgroup.co.uk + 44 (0)207 395 6800 igs Alternative Investment Solutions LLP 39 King Street, London WC2E 8JS United Kingdom Tel +44 (0)20 7395 6800 Fax +44 (0)20 7395 6801 info@igs-group.co.uk | www.igsgroup.co.uk |Partnership No. OC328876 IGS AIS LLP is a member of the IGS Group Ltd. Authorised and regulated by the Financial Services Authority VAT registered - 918509309
  • 3. Disclaimer IGS Alternative Investment Solutions LLP is a member of the IGS Group Ltd and is authorised and regulated by the Financial Services Authority in the U.K. Igs alternative investment solutions LLP is compensated for finding investors for hedge funds. The foregoing material including any associated documents (“this document”) is provided for informational purposes only and as of this date may not be complete, may not contain certain material information about a Hedge Fund, including important disclosures and risk factors associated with an investment in such Hedge Fund, and is subject to change without notice. The information contained herein does not constitute an offer or invitation to buy or subscribe in any securities or funds in any jurisdiction in which such distribution is not authorised. This information is not intended to be, nor should it be construed or used as, financial, legal, tax or investment advice or an offer to sell, or solicitation of any offer to buy, an interest in any Hedge Fund. No offer or solicitation may be made prior to the delivery of appropriate Hedge Fund offering documents to qualified prospective investors. This information does not take into account the particular investment objectives or financial circumstances of any specific person who may receive it. More complete disclosures and the terms and conditions relating to an investment in a particular Hedge Fund is contained in such Fund’s offering documents. Before making any investment prospective investors should thoroughly and carefully review a Hedge Fund’s offering documents with their financial, legal and tax advisor to determine whether such an investment is suitable for them. An investment in any particular Hedge Fund is not suitable for all investors. Although Igs alternative investment solutions LLP may provide this summary information, Igs alternative investment solutions LLP does not provide “due diligence” on investors’ behalf and is not responsible for investor’ investment decisions. Performance results are generally shown net of applicable fees and reflect reinvestment of profits. No representation is made that any Hedge Fund will or is likely to achieve its objectives or that any investor will or is likely to achieve results comparable to those shown or will make any profit at all or will be able to avoid incurring substantial losses. Past performance is no guarantee of future results. The information contained herein, including investment returns, valuations, fund targets and strategies, has been supplied by third party sources, including the Hedge Funds and their managers or other representatives and, although believed to be reliable, has not been independently verified and cannot be guaranteed. Igs alternative investment solutions LLP makes no representations or warranties as to the accuracy, timeliness or completeness of such information. Financial indicators and benchmarks are unmanaged, do not reflect any management fees, assume reinvestment of income, are for illustration purposes only, and have limitations when used for such purposes because they may have volatility, credit, or other material characteristics that are different from a particular Hedge Fund. This material is confidential, is intended only for the person to whom it has been sent and under no circumstances may a copy be shown, copied, transmitted, or otherwise given to any person other than the authorised recipient. General Hedge Fund Risk Disclosure Hedge Funds are unregistered private investment partnerships, funds or pools that may invest and trade in many different markets, strategies and instruments (including securities, non-securities and derivatives) and are NOT subject to the same regulatory requirements as mutual funds, including mutual fund requirements to provide certain periodic and standardized pricing and valuation information to investors. There are substantial risks in investing in Hedge Funds. Persons interested in investing in Hedge Funds should carefully note the following: -Hedge Funds represent speculative investments and involve a high degree of risk. An investor could lose all or a substantial portion of his/her investment. Investors must have the financial ability, sophistication/experience and willingness to bear the risks of an investment in a Hedge Fund. -An investment in Hedge Fund should be discretionary capital set aside strictly for speculative purposes. igs Alternative Investment Solutions LLP 39 King Street, London WC2E 8JS United Kingdom Tel +44 (0)20 7395 6800 Fax +44 (0)20 7395 6801 info@igs-group.co.uk | www.igsgroup.co.uk |Partnership No. OC328876 IGS AIS LLP is a member of the IGS Group Ltd. Authorised and regulated by the Financial Services Authority VAT registered - 918509309
  • 4. -An investment in a Hedge Fund is not suitable or desirable for all investors. Only qualified investors may invest in Hedge Funds. -Hedge Fund offering documents are not reviewed or approved by federal or state regulators. -Hedge Funds may be leveraged (including highly leveraged) and a Hedge Fund’s performance may be volatile. -An investment in Hedge Funds may be illiquid and there may be significant restrictions on transferring interests in a Hedge Fund. There is no secondary market for an investor’s investment in a Hedge Fund and none is expected to develop. -A Hedge Fund may have little or no operating history or performance and may use hypothetical or pro forma performance which may not reflect actual trading done by the manager or advisor and should be reviewed carefully. Investors should not place undue reliance on hypothetical or pro forma performance. -A Hedge Fund may employ a single strategy, which could mean a lack of diversification and higher risk. -A Hedge Fund (for example, a fund-of-funds) and its managers or advisors may rely on the trading expertise and experience of third-party managers or advisors, the identity of which may not be disclosed to investors. -A Hedge Fund may involve a complex tax structure, which should be reviewed carefully. -A Hedge Fund may involve structures or strategies that may cause delays in important tax information being sent to investors. -A Hedge Fund may provide no transparency regarding its underlying investments to investors. -Hedge Funds and their managers/advisors may be subject to various conflicts of interest. The above summary is not a complete list of the risks and other important disclosures involved in investing in Hedge Funds and is subject to the more complete disclosures contained in a Hedge Fund’s offering documents, which must be reviewed carefully. igs Alternative Investment Solutions LLP 39 King Street, London WC2E 8JS United Kingdom Tel +44 (0)20 7395 6800 Fax +44 (0)20 7395 6801 info@igs-group.co.uk | www.igsgroup.co.uk |Partnership No. OC328876 IGS AIS LLP is a member of the IGS Group Ltd. Authorised and regulated by the Financial Services Authority VAT registered - 918509309