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So Much for Facebook…

Mark Zuckerberg

Sad Mark Zuckerberg...

For those looking for an investing shot in the arm, the Facebook IPO wasn’t quite the financial rocketship it was billed to be. Many people lost money within minutes of the opening bell. In fact, it’s already considered one of the biggest duds in the history of the stock market. Not quite the press it wanted – sorry, Mark Zuckerberg!

That being said, what’s an honest investor to do when the market itself has become no better than a weekend trip to Las Vegas and betting it all on 28 black? Well, I’m no fan of the stock market for many reasons (no equity, no collateral, no insurance, to name a few). It should be no surprise, that real estate offers many investment opportunities that the market simply can’t compete with, but there’s one in particular that I feel needs specific mentioning: the ability to say YES or NO at a ‘unit level’.

What do I mean ‘unit level’? I mean being able to say YES or NO as to whether to invest in or buy a particular house, i.e the ‘unit’ is a house (or townhouse, condo, etc.). With the market, you’re buying shares of stocks or mutual funds but are you actually directing the board of a company to make certain decision? Of course, not. You’re investing in a ticker symbol that represents a company (or mix of companies) that has its board of people you’ll likely never meet that make critical decisions every single day — without any input from you. How dare they! But it’s the truth.

However, in real estate, unless you’re investing in a hui or REIT, then you are the ‘board’ of your own personal investing firm and YOU’re the one calling the shots. Not everyone’s comfortable in that scenario, but I LOVE IT.

Now we’re in June, here in Hawaii. Summer is traditionally a good time for real estate — the grass is greener, kids are out of school, love is in the air, yada yada. And while no Hawaiian city made a recent Top Ten list by my friends at FortuneBuilders, there are bound to be some fantastic deals around the corner.

Why? Well, the banks are primed to start releasing more distressed properties, of which there are plenty in Hawaii. Some might say it’s actually started. That means if you have cash to invest or are pre-approved for a mortgage and can thrown down a sizable down payment, then start looking NOW for properties where you can get yourself 15% or more upfront equity. Maybe you can rent it out to cover the mortgage while you watch it appreciate over the next decade (btw, never buy a house at retail — just don’t do it). This goes for here in Hawaii as well as on the mainland. My colleague Scot Stafford of Landmark Properties is finding amazing real estate deals in NW Washington!

Combined with the upcoming glut of more distressed mortgages on the market is the expiry of the non-judicial foreclosure moratorium, which I’ve mentioned many times before and won’t go into again here. In summary, get prepared for more DEALS here in the Hawaii market. If you’re aggressive or get on an investor’s buyers list, you should be able to get a nice deal that suits your criteria and budget.

Bottom Line: The Facebooks of the world can promise the moon and have all the razzle dazzle, but in the end even the biggest firework can be a dud. Real estate, if done properly, can offer all kinds of rewards that a ticker symbol can never compete with.

Originally from Philly, Mike came to Hawaii via Washington DC and is the founder of HawaiiHousingNews.com and its sponsor, Big Rock Investments, a Hawaii real estate investment company based in Honolulu. Mike buys houses directly from sellers ‘as is’ for cash and helps stop foreclosure by leveraging capital from private lending investors seeking a safe, high return on their capital with the security of discounted real estate. Learn more at http://bigrockinvestments.com.

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