The document discusses the impact of the 2008-2009 financial crisis on the real estate market, highlighting the devaluation of the US dollar, rising gold prices, and a notable increase in foreclosures. It advocates for real estate investment as a strategic opportunity due to historically low interest rates and potential for appreciation despite projected declines in housing prices. The text also outlines investment strategies and emphasizes the advantages of leveraging equity in residential properties amid economic uncertainty.

1. Real Estate OpportunityDecember 2009

2. Current Situation Financial crisis of 2008 and 2009 has led to a recession, shaky financial market, and uncertainty in long-term investment options

3. Due to the collapse lending criteria has changed to prevent lower income individuals from getting a mortgage.

4. Global concerns have led to uncertainty in international markets, currency, and future financial stability.

5. Investors are looking to commodities and tangible assets with REAL value in this time economic uncertainty.Current SituationWhat has this global financial crisis caused??-Devaluation of the US dollar (Down significantly in the past 10 years)-Gold is increasing to record levels due to the uncertainty of the global economy. ($1100/ounce as of Dec 2009)-Oil currency changes (May no longer be traded in US dollars but a mix of global currencies – this means the potential of further devaluation of the currency)

6. Current SituationStock Market – Currently back to a stable level in December but much of the value is derived from 2009 earnings reports. These earnings have been created or maintained through cost cutting and record layoffs. (10.2% unemployment) Bond Market – The bond market is not offering significant returns unless you purchase long term bonds. In this uncertain environment there is not much potential for Treasury or corporate bonds to appreciate in value like stocks, commodities, or real estate.

7. Current SituationInterest Rates – Still holding at record lows but with an increased money supply there is no way these levels can stay long-term. Locking in low rates over the next few years offers a huge advantage before the obvious uptick in interest. Real Estate Bubble – Many properties have been purchased and overvalued through the bubble. Now many homeowners are upside-down in terms of asset/debt ratio.

8. Current Situation In inflationary times, investments in houses can protect from the tremendous loss in purchasing power.

9. Inflation will drive up prices of all commodities, including land and housing.

10. Inflation hurts the investor with cash or fixed-income investments.Cycles in the economy change and we are in a period of slow recovery and dramatic inflation. *Money in the bank or low-yield bonds will earn little under the current circumstances.

11. So what does the average investor’s portfolio look like?

12. Proposed Portfolio

13. Why Real Estate…Why Now? Historically low interest rates offer excellent financing at low fixed rates

14. Depressed housing market gives the ability to purchase homes at a market discount and from desperate sellers. 2010 will also bring the rise of increased commercial loan defaults and the devaluation of commercial properties.

15. Tighter lending requirements and rising interest rates in the coming years will lead to a larger rental clientele

16. Inflationary concerns for 2010 and beyond give you the opportunity to hold rental property; rent increases, property value increases, and loan payments remain fixed.Why Real Estate…Why Now? While home sales have improved, housing prices in many markets are projected to decline significantly through 2010. Overall, prices are projected to drop 5-10% nationwide and even more in select markets. (www.moodys.com)

17. Currently 2 million housing units in the US are in foreclosure or bank owned. In 2010 it is estimated that well over 2 million more homes will enter foreclosure. (www.realtytrac.com)

18. Government incentives like the first-time-homebuyer tax credit, subsidized mortgage adjustment, and the Fed’s purchase of mortgage-backed securities are set to expire in March 2010.

19. Inflated prices will been forced down throughout 2010 and in specific markets banks will aggressively promote short sales and the sale of foreclosure properties.Why Real Estate is Safe…Leverage - based on the asset itself and you can get a loan up to 90 percent, and sometimes even 95 to 100 percent, of the total asset value. No investment where the application of leverage is more powerful than in real estate.

20. Equity - this equity buildup is a significant income amount. Although you cannot spend it each month, when the time comes to sell your property, you owe less on the mortgage, so you will receive more money at closing. It’s like putting money in the bank each month.

21. Inflation - real estate ownership protects your investment through inflationary times with comparable appreciation. Significant inflationary concerns can be eliminated with real estate.