San Diego property management is a good business and the rewards of equity growth from direct investment in San Diego rental property are well known. However, quickly achieving positive monthly cash flow can require a lot of equity. It made me wonder if there are some promising supplementary real estate investment avenues that .
I haven’t been able to find the link, but I recall seeing an interview of Warren Buffett on Youtube. My best recollection is that Mr. Buffett said that he didn’t see the point of investing in real estate through the stock market because it entails the expense of administrative middle men – making the stock market avenue inferior to direct investment.
However, I also recall him acknowledging that if one lacks sufficient capital (I believe he mentioned a figure between half a million and two million dollars), the stock market approach may have merit. Some time ago, I chose to try stock in a particular real estate investment trust with results that satisfy me so far.
The stock I chose is New York Mortgage Trust (NYMT) “New York Mortgage Trust, Inc., a real estate investment trust (REIT), is engaged in acquiring, investing in, financing, and managing mortgage-related and financial assets in the United States. It primarily invests in residential mortgage-backed securities comprising adjustable-rate, hybrid adjustable-rate, fixed-rate, interest only and inverse interest only, and principal only mortgage-backed securities; multi-family commercial mortgage-backed securities; and residential mortgage loans, including loans sourced from distressed markets. The company qualifies as a REIT for federal income tax purposes. It generally would not be subject to federal income tax on that portion of its income if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 1989 and is headquartered in New York, New York.”.
Don’t get me wrong. All REITs are speculative. One day I may look back on this investment as a big mistake. I’m not recommending the stock to anyone.
However, NYMT was conducting business and making a profit before the Federal Reserve’s Quantitive Easing Program (QE). The company is coming off a strong quarter and at this point I’m personally betting the management is taking the proper steps to thrive in the soon to come post QE era.
If only out of curiosity, you may want to take a look at it. The following link is a place to start: http://seekingalpha.com/article/2488295-this-is-what-best-in-breed-looks-like
Mark Di Tommaso
8 West Property Management
