enoch01

Myth and Santayana, Good points, both of you. I'm an ignorant outsider of the industry, just observing that in certain places, prices seem to be getting...interesting.

How are you calculating that 12-14% yield? It sounds like you may be assuming $0 for vacancy loss, management expenses, and maintenance costs. After 15 years in the rental business I can tell you that 1 bad tenant can wreck your numbers in a hurry! I'm sure you are correct! I was excluding everything except taxes, insurance, and homeowner's association fees (which can include quite a bit of outside maintenance in many Florida communities). Vacancy loss and management expenses are excluded. So I'm curious, as a 15 year veteran: where's your business (just general geography), and what do you think of the market in your area at the moment?

Perhaps not as much as you think, though I'm no expert. It depends on how much extra supply was built during the boom, which is not necessarily correlated with the prices that homes were selling at during the boom. I don't know of a great way of figuring out the magnitude of this dislocation. A few years ago people were willing to receive too small a yield based on irrational exuberance, now they are passing up much higher yields based on, maybe, irrational fear. Throughout the boom and bust there was some rental rate that landlords could demand, but these same landlords (or hypothetical landlords who simply purchased and lived in it themselves) changed their attitudes about what kind of yield they wanted. Price action of the asset simply took over. Construction certainly trended in the same direction as prices, but they didn't move in lockstep, and certainly not in all markets.

I've got to agree here, too. Knowing that you can delete a thread rewards bad behaviour. It's a free option on opinions. You can say any insane thing and then if it doesn't work out or you look like a fool, just remove the thread and voila your record is just as good as it was. Plus, as S2S points out, there's a handy dose of survivorship bias here. Agreed! Parsad, Would you consider a policy change here? I was getting a helpful education on the MTR Gaming thread, and am sorry to see it has all disappeared. Thanks to Harry and given2invest for that exchange, by the way.

Is there a difference in markets within Florida? Say Miami-Dade vs something like Naples area? Are there areas with more potential than the others? I'm not sure, to be honest. I'm in the Tampa area, and I am seeing those after-fee, after-tax, after-insurance, 12%-14% yield deals around me. I think the sweet spots are areas that were not relying so heavily on construction to fuel the local economy. Such areas could still support higher rents relative to housing price since the job market wouldn't have cratered as hard as the housing market. Anecdotally, I understand the Naples area had a higher concentration of its economy involved in the construction market than other areas of Florida, so I would be hesitant there. Miami, Orlando - I couldn't offer much of an opinion. That being said, I'm sure shrewd (and maybe not-so-shrewd!) investors could find deals all over this state.

That's true. But I have enough leverage with my own mortgage - not very interested in taking on more, especially for something that's out of my circle. Hiring somebody else adds another layer, reduces returns, and adds uncertainty. Although, admittedly, I haven't looked very hard to see what those costs are. That's my observation as well (I'm in Florida). It seems like a good opportunity to me. If any board members are interested, I'd be happy to occasionally check in on their place from time to time as long as it's a short drive! ;D

My relatives just bought a place at one-third the price of what it last sold for in 2006. In certain places in Florida an all-cash buyer can earn around 12-14% annual yields right now. That is after taxes, insurance, and association fees. Completely free option on future appreciation. If only I knew how to be a landlord, and had the time - oh, and the cash!

Thanks for that update. I finally had to capitulate and buy earlier this week. 30% profit margins, growing revenues, selling at 9X trailing - incredible. Never thought we'd be saying that about Microsoft. Honestly I thought I'd never own this company...

I think this is a widely held belief, and it is growing in breadth and depth. Consequently, cash has been building in my port for the past couple of months. It seems very few people want cash right now.

Correct. Fantastic point Ben.

I know I shouldn't be amazed, but I am.

Great board Sanjeev, thank you for your efforts! Thank you also to the other posters for their contributions. Here's to many more years...

So is anybody interested at this price? I haven't looked at it, don't have an idea of the value, but there's potential catalysts here.

This is hilarious. I wonder how he came up with 1:15.

Nice thought exercise to burn the holiday calories... Theoretically, "money" is an agreed-upon medium of exchange. As such, I would say there is an amount equal to all current plus expected output of human endeavors. If we talk about the specific bits of media (paper, gold, silver, rice, goats, etc), then I haven't the foggiest idea :)

Thanks nwoodman!

Anybody know what the latest is in the spat with Fortescue? http://biz.yahoo.com/e/100901/luk8-k.html Yes, it's great that they have some cash from the Americredit buyout, but that could be blunted by a reduced NAV of their Fortescue investment. I note that Mr Market hardly blinked when the above news came out, so maybe he's not taking it seriously. But, should we? I don't know what to make of it.

Just following up on this one. Peerless has decided to offer $3.25 for anyone who'd like to tender their shares. http://finance.yahoo.com/news/Peerless-Systems-Corporation-prnews-1871047385.html?x=0&.v=1

Sorry about the job loss. I live in the Tampa area - originally from the US Northeast. Winters and beaches here are wonderful, summers not so much. OK housing and job market.

What are the main things you like about Red Robin? Check out the investor presentation on their website from June. In there they break down CapEx for the current year.

Good interview - thanks!

Looking for another net-net? How about Peerless Systems (PRLS)? It's a former printing technology company that is phasing out of that and looking to deploy capital in more favorable environments. They had bought a decent-sized stake in Highbury Financial, and recently helped force a sale of Highbury to Affiliated Managers Group. As a result of all that, PRLS is now trading at less than cash value. The management doesn't seem intent on burning cash like we tend to see with other technology companies that happen to trade so cheaply - they are walking away from their printing technology operations. Granted, it's not trading way below cash value, but still...

This reminds me of the scene from The Raiders of the Lost Ark where Indiana Jones is trying to outrun the 300 lb boulder. Can the banks make enough with today's interest rates before they get run over by their charge-offs? Run, Indy, run!

wabuffo, Do you use any particular methods to find liquidations? Do you just check the SEC for form 25 registrations and go from there, or something else? Thanks, E

I live in the Tampa, FL area. FWIW, within the past couple of months I have seen one or two unoccupied commercial buildings (stand-alone restaurant size) with signs announcing a new tenant with a huge banner saying "We Buy Gold!". A while ago I started a thread about the best option for purchasing gold. I haven't taken a position, but reading the anecdotal evidence I'm wondering if now is the time to sell instead.