The Rogue Investor Report: Take Control of your Financial Future!

September 6, 2007

5 Real Estate Mega Trends

Rogue Investors,

You are in for a treat!

In the next two newsletters I am going to reveal the 5 Real Estate Mega Trends that could make you a lot of money over the next decade.

Mega Trend 1 - International Ocean Property

The first trend, International Ocean Property, is something I have been talking about for several years and I hope you have followed my advice.

This is because if you have been paying attention, the headlines should read, “While the U.S. is imploding, International Real Estate is exploding.”

In our favorite ocean property market, the North Coast of the Dominican Republic, prices are rock solid and I predict real estate values will rise 20% to 30% per year for the next 5 to 10 years, and even that could prove to be conservative. This market is highly undervalued and just starting to be discovered. Over 150 million “baby boomers” in the U.S., Canada and Europe want a second home in a warm climate, but only 5% have purchased one already. With stunning ocean views, warm climate and a high affordability factor, this market is becoming a magnet for baby boomers.

Mega Trend 2 - Real Estate Co-Ownerhip

Few investment strategies can deliver the magic combination of low cost, low risk and high return that all investors want, but I believe Real Estate Co-Ownership can come close.

What is Real Estate Co-Ownership?

Real Estate Co-Ownership is when a group of investors pool together their money to purchase a real estate asset they could not afford alone. The asset could be land purchased in bulk, an apartment/condominium where many investors own a percentage of the investment, or a commercial building that a group of doctors purchase for their practice. Although it is not well advertised, in the private markets Real Estate Co-Ownership is done every day. What I am confident will happen over the next decade is that co-ownership will go mainstream and become a strong investing trend that will open up a whole new market for real estate investors.

Don’t confuse Real Estate Co-Ownership with Time Shares. Time shares are not an investment. In most cases, time share owners own time and do not hold title to any specific asset. In the event the asset is sold, the time share owners receive nothing. There also is no limit on the number of time shares that can be issued, so over time, time shares usually decline in value rather than appreciate like true real estate investments. Finally, most time shares are limited in duration to one or two weeks, not enough time to create an investment with consistent cash flow.

In contrast, Real Estate Co-Owners are recorded on the deed/title or they own a percentage of the business that owns the real property. Thus Real Estate Co-Owners enjoy the same benefits that any other real estate investor receives from a real estate investment, often with less risk. This is because provided the investment is sound, the co-owners will have an investment that will grow in value and generate cash flow with a minimum cost of investment.

A great example of Real Estate Co-Ownership is the Banuyls investment in Southwestern France that we completed eight months ago. In this offering, 12 investors purchased five existing Mediterranean Sea-view apartments in Banuyls, France. Already, the apartments have appreciated about 30% in value; and in addition to being a good investment, each investor can stay in the apartments for one week per year.

What are the benefits of Co-Ownership?

Low Risk and Investment Cost
High Appreciation and Cash Flow Potential
No Management Hassles
Enjoyment.

Let me explain each one of these areas separately.

Low Risk and Investment Cost

One of the biggest risks in real estate investing is that your money is often concentrated in just a few, high dollar investments. After all, unless you are running a rental empire (p.s., my partner and I already did that, and while we made money it came with some pain), few people can afford and/or manage owning more than a few properties.

Real estate investment trusts (REITs) address this to a degree, but REITs often own so many properties that your investment dollars are over diversified. This limits your potential returns to a respectable, but not great, 10% to 15% on average. In addition, unless you are an insider, you have no control over what the REIT is doing, the same problem we all face when investing in public companies.

In contrast, Real Estate Co-Ownership allows you to invest small amounts of money in multiple properties and the investment costs are shared among all owners, factors that reduce your investing risk. In contrast to REITs, you are an investor at the ground floor with the same privileges that an insider enjoys in larger investments.

High Appreciation and Cash Flow Potential

While co-ownership reduces your investing risk, it does not reduce the appreciation or cash flow potential of the investment. Co-ownership also allows you to review and invest in projects with the highest potential for appreciation at the ground floor, something that is usually reserved for individuals with substantial capital.

No Management Hassles

With co-ownership, the manager is responsible for the investment. You make money without managing it.

Enjoyment

There seems to be some unwritten rule in our society that most investments, especially those earmarked for retirement, should not be enjoyed until some future date when your nest egg has hatched. I think this is ridiculous.

When possible, I set up my investments so they grow in value while offering current enjoyment. Real Estate Co-Ownership makes it possible for anyone with limited investment capital to own something special that appreciates in value that they can live in/enjoy occasionally while still making money for the future.

Finally, I think for many investors with limited investment capital who want to invest in the top opportunities in foreign real estate, co-ownership is the way to go.

And make no mistake about it. The U.S. real estate market will take many years to get back to anything resembling a boom. Prices rose substantially, especially on the coasts, for over 10 years and it will take at least five years to get back to normal.

In contrast, many foreign markets, especially those with a warm climate, undervalued real estate and favorable tax rates, will have an incredible run over the next decade. All you have to do is look at a market like the Bahamas, where you could buy $50,000 to $70,000 ocean lots just five years ago, and you realize what will happen. Those same lots now cost $150,000 to $350,000 and condos/homes on these islands have doubled or tripled in value over the same time period.

A market like the North Coast of Dominican Republic, undiscovered five years ago, is now starting to be noticed. Over the last two years, tourism to the Dominican Republic doubled and is expected to grow 30% per year for the foreseeable future. The key to making money is to invest in markets that are undervalued but starting a long period of growth. Co-ownership gives everyone a way to participate in the best real estate investments around the world with limited risk.

In my next newsletter, I will profile two more Real Estate Mega Trends that are going to take place over the next decade.

Happy investing,

Bryan Rundell

P.S. You are welcome to join us at three of our real estate investing events:

Slice of Europe Tour
Sept. 21-24, 2007

Play to Win in Real Estate - Montreal
Sept. 22, 2007

Tax Sale Seminar in Austin, TX
3 day of training (includes live auction).
Sept. 30 - Oct. 2, 2007

Slice of Europe

Another investing trip to France is scheduled!

Only 1 spot left!

Join Michael Williams and Rogue investor and "Own Your Own Slice of Europe." We, along with our Rogue Investor customers are taking a tour of The Beautiful South of France.

Learn how you can invest in a Slice of Europe and how to buy properties in undervalued areas of the Mediterranean.

Enjoy the history, culture, art and a fantastic view of the Mediterranean Sea while networking with other investors to create joint ventures.

To schedule your "Slice of Europe" tour, please visit European Real Estate or call Rogue Investor today @ 913-381-4520.

Next "Slice of Europe" tour: September 21-24, 2007.

Choosing the Best Deal from the Batch!

Determine what properties on a tax sale list are worth researching.

So you figured out where and how to obtain a tax sale list from the county.
What now?

Short answer -
Narrow down the list and choose potential properties. Once you narrow
down your list, research the remaining properties and find the
best deal from the batch. Easier said than done? You might be asking:

"Okay, narrow down the list. But how?"

Many Rogue Investor members, after reading the
Rogue Real Estate Investor Collection, which is full of detailed information
that walks you through the tax sale investing process, have requested a "checklist" to help them remember all the steps for weeding out bad deals from the list and lead them to the gems at a tax sale. Well here it is... a checklist.

Locate the property
Obtain a plat map or developer's drawing
Consider the shape of the property. Is it square or odd shaped?
View other maps: topographical and areal
Check for environmental risks
Visit the property
Assess the value of the property. Is it higher than the starting bid?
Check if there are other liens on the property.
Check if a bankruptcy has been filed.

These are important steps to take, but don't hesitate to add steps to this list if you find additional helpful research techniques for your due diligence.

So, are you ready to attend your first auction?

What if you could have someone, with several years of experience investing in liens and deeds, guide you through the entire process starting from where to go to obtain a tax list up to the bidding at an auction?

Ready to bid or not, join us at our next tax sale seminar and start learning all the tools you need to become a successful tax lien and tax deed investor!