Minyan Mailbag - The Other Side of Real-Estate
Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.
I am on the verge of buying a condo in Miami. I need a place to live, not intending to flip it for gain, will doubtless pay for most of it in cash (better that than to go long this market) and I will pick a property with good location for jobs and infrastructure, not views and elegance.
I was a Californian from 1980 to last year, mostly in Los Angeles. I know the market of which Minyan Stephen speaks, and I feel it is driven by speculation and foreign investing. You know, I dabbled for a time in the acting thang out there, and while on a job with the LA Opera I met a lead carpenter guy that also worked as a "super" (a supernumerary, or extra in the theatre). He related to me how, back when the Japanese were buying everything in sight they would purposely build the sets huge, way more than necessary for filming, just to impress the new Asian studio owners. Perhaps the excess should really be focused in the high-end real estate market and its financing, in that many foreign buyers are plopping down huge sums on properties or leveraging their strong currencies into our markets...a very difficult argument to prove convincingly in either direction.
All I know is that real estate is a cyclical industry, that this time is NOT different, but having said that, the SE Florida market is a bit unique:
- Raw land is limited
- Geography and weather inductive to high rise dwelling construction (perfect for New Yorkers)
- International hub for travelers east (Europe) and south (Latin America)
- Florida homestead laws are generous and protective (why do you think OJ moved here?)
- No state income tax
- Striking distance to many, many offshore tax havens (perfect for the Tony Montanas of the world)
All in all, I HATE the thought of tying up capital in a dwelling, not to mention monthly maintenance fees and the like. When I left California I sold my ocean view home and vowed not to make the mistake of going into debt on a piece of dirt again. Perhaps there is a meeting of the two extremes that makes sense. One thought I have toyed with is the idea of moving to the Dominican Republic (an hour ahead of you boys in New York!) or Panama (EST there) and trading for a living from where I need to only make ONE FIFTH of what I need to make to stay afloat here.....I had the most excellent foresight to study Spanish in college, so nothing along these lines is too far fetched as far as I am concerned.
Minyan Will Vourlas
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