I have not posted in a while but I promise that I am back at the encouragement of friends around me to stick with my love for stocks. Tremendous upside is in the air with the new year dawning!
There is a great opportunity to create wealth for you and your family. I wish all a Merry Christmas and I pray that God will bless your family at this special time of the year.
With the housing market in a mess and those in foreclosure seeking other means of housing...a clearance rack of Real Estate Investment Trusts (REITS) have emerged.
These can be defined as:
A real estate investment trust or REIT (pronounced /ˈriːt/) is a tax designation for a corporate entity investing in real estate that reduces or eliminates corporate income taxes. In return, REITs are required to distribute 90% of their income, which may be taxable, into the hands of the investors. The REIT structure was designed to provide a similar structure for investment in real estate as mutual funds provide for investment in stocks.[citation needed]
Like other corporations, REITs can be publicly or privately held. Public REITs may be listed on public stock exchanges like shares of common stock in other firms.
The key statistics to look at in a REIT are its net asset value (NAV), adjusted funds from operations (AFFO) and cash available for distribution (CAD). REITs face challenges from both a slowing U.S. economy and the global financial crisis, depressing share values by 40 to 70 percent in some cases.
-WIKIPEDIA
This has happened to RAIT FINANCIAL TRUST (RAS). These types of companies are involved in apartment complexes and multi-use properties that mix residences and commericial together.
The economy has handed it to RAS two ways. First, every body being able to buy a house pretty easily before the crash killed the apartment business. Second, the economy slowing stopped the construction boom of multi-use and raised vacancy rates as businesses went out. RAS was a $30 dollar stock two years ago.
Now we are rising from the ashes and it looks great. The rate of foreclosure unfortunately is causing a construction boom again for apartment complexes. (There are several going up around where I live in Lexington, SC). The apartment vacancy rate is 30% nationally. There will continue to be demand for apartments. Others are moving to apartments to live on smaller budgets and to cut out the maintenance costs of upkeeping a home.
Commercial construction is up as well and multi use is a big industry now when cement is pouring. RAIT just posted their first profit in a while. This stock bottomed around $1.50 and is now around $1.80. REITS pay dividends as well when profitable.
RAIT suspended their dividend during their time of difficulty....but it will be back. Some analysts have done the math and state that this stock is severely undervalued. I believe this could be a $8-$10 stock sometime next year.
This is a great opportunity to pull this company off the clearance rack and tuck it away in your portfolio.
I dedicate this blog to a good brother and friend of mine who encouraged me to pursue this dream of trading stocks for a living. Thanks, Jimmy. I hope you enjoy.
