Aaron Edelheit runs American Home Real Estate Co., which focuses on buying and renting homes in the southeastern U.S. Edelheit, a talented stock picker, is winding down his equity management firm to focus on U.S. housing. Edelheit Says:
- This is the best time ever to buy a home. We’ll never see this kind of environment ever again.
- With a house rental, you get to put 25% down. Someone else pays your mortgage, and you get extra cash flow. The returns are silly.
- His firm is picking up homes for $50,000-$60,000 and putting $11,000 into them. The mortgage comes to about $250 per month, and he rents them out for $1,000 per month. You do the math.
- The whole lower end of the market – I’m talking about middle class, not slumlord stuff – just got wiped out. They literally got blown out. And they won’t be buyers for a long time because their credit is destroyed.
- I see a two- to three-year window in terms of the pricing that exists now. We have probably three–five years before we get through all the issues of the bubble. I mean, our average acquisition cost is about $29 per square foot. Those are ridiculous numbers. I recognize that. That’s not going to last.
- The best part is the risk-reward. If you are buying into a growing city, it is really only a matter of time. The downside is de minimis. I’ve really tried to figure out how to kill this and can’t.
Put simply, U.S. housing is the best value play in America. If you own a house, look to buy and rent another, or invest in a partnership, such as Edelheit’s, that gets you exposure to this asset class.
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