Energy Finance

Craig Rozema, real estate investment specialist, leading portfolio manager and author of “The Next Hot Real Estate Market,” has some advice for those with cash to take advantage of real estate investment opportunities.

Invest, but don’t speculate, he says. Speculators buy property based on gut or rumors. Investors don’t care if their cousin’s brother says the property is a great deal in an up-and-coming neighborhood. Investors run comparables and put money on facts, figures and fundamentals. Investing is planning for the future; speculation is gambling with it.

He advises not to be restricted to a local area. Buying an investment property nearby may be helpful for the real estate newbie because he is familiar with his area, but to truly maximize return, an investor should look nationwide. There are local markets that haven’t experienced over-inflation, so they’re not likely to crash. Other areas have been growing at a consistent rate and likely will continue to do so.

“In stocks, you don’t want to invest in a company just because they are located in your hometown. You want to invest in the company that has the best chance to bring you financial success. The same is true for real estate.

“The truth is, the country is going through a change and change creates opportunity,” says Rozema.  “By doing your research and finding the right property, someone is going to get really, really rich off of this housing slump. It may as well be you.”

While Rozema paints a cheery picture, savvy investors will talk to their financial advisors and attorneys before committing to any transactions.

Also, in this editor’s opinion, buying distressed real estate properties to flip in better times may be a good investment, but should be second choice to investing in a strong, stable energy E&P or midstream company.

For those intrepid investors still interested, the Federal Reserve has an interactive map of where mortgages are strong or weak, at www.federalreserve.gov.

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