Investment Playground.NET

More and more foreign investors are lining up to make investments in Indian real estate. They are believed to have raised $3.5 billion and above $2.5 billion have already been invested by overseas real estate funds in India till date. The list includes the names such as Blackstone Group ($1 billion), Goldman Sachs ($1 billion), Citigroup Property Investors ($ 125 million), Morgan Stanley ($70 million) and GE Commercial Finance Real Estate ($63 million).

However, this is not an end to the list. It further goes listing JP Morgan, Lehman Brothers, Warren Buffett’s Berkshire Hathaway, Colony Capital, Merril Lynch, and Starwood Capital.

The change in policy of February 2005 has paved ways for foreign investments in construction projects with fast approvals. The major attraction is returns of 25% offered by realty projects in India that certainly appears hard to come by the US and Western Europe.

Of all, Goldman Sachs seems to be the most determined player and has been combing through Indian property market for more than a year now. The company, indeed, encouraged several other investors to look forward to real estate trends in the country.

India’s urban office space market is what attracts investors. It is 60 million sq ft as compared to New York City’s 400 million sq ft or New Jersey 175 million sq ft. Tishman Spyer was the first US developer to invest in India. ln 2006, the New York City based firm entered into a joint venture with ICICI Venture Funds of Mumbai that will have a war chest of $2.5 billion.

Speyer- ICICI Venture has signed memorandum of understanding for two construction projects in India. One is a $200 million project for residential and commercial development on 42 acres in Bangalore’s prime Whitefield suburb. Another project is in Karnataka’s Devanahalli, where Tishman Speyer and ICICI Venture Funds are purchasing a 25 acre plot whose final use has not yet been decided.

http://rantaboutit.blogspot.com/search/label/Blackstone

The terms investment banking and private equity cause a lot of confusion to the general public. The general public know two things - 1- 120 hours a week and 2- filthy rich. Well they’re right about those two - but what exactly is private equity?

Private equity firms buy companies or take controlling stakes, cut costs, restructure the businesses and sell them later for a profit. They usually borrow two-thirds of the money needed to finance their purchases, making for a high-risk, high-return investment strategy. A record $911 billion was invested globally in private equity deals last year, up from $471 billion the prior year. Blackstone group is the second-largest U.S. private equity firm.

The market has seen huge upswings lately. 25 of the last 30 trading sessions have ended in positive territory. Daily we are at new all-time highs. First quarter earnings beat out all types of forecasts, corporate deals and mergers, and stock buybacks are all resulting in day after day after day of market increases. The underlying economic factors, however, do not support this type of movement.Investors in the equities market need to learn how to define “the top”. This means knowing when you’re comfortable with your returns and now want to protect yourself from any drawbacks. You think about how much you’ve gone - never think about how much farther you want to go. This is what is called euphoria. Companies, just like everything else in life, go through cycles. Do what you can to purchase with certainty on a low and sell with certainty on a high. Selling at the top is a misnomer that is dangerous and could cost trillions of dollars, as it has during other down cycles. The smart investors get out at a high, the gambling investors hold on for those last few dollars. Some succeed, many fail.

Great - we’re at all time highs. This is why the party is ending…

• The S&P is currently at 1505, flirting with its notable high of 1527 set on March 24 of 2000. After hitting that level back in 2000, the market saw a three-year decline as the dot-com bubble burst. Have we learned from history? Granted - we are not in the overextended position we were back then - but protecting yourself is fundamentally important at this stage, especially given the macroeconomic circumstances we’re in. There’s an old saying on Wall Street: “Every new high in the market is bullish, except the last one.”
• Widening trade deficit - $63.9 billion in March from $57.9 billion in February.
• Two unsuccessful wars launched by an unsuccessful administration that serves as a sieve for our country’s tax dollars.
• Import and export prices higher.
• Oil and gas prices much higher than they should be ahead of summer driving season.
• Sour housing market. Don’t fall into euphoria mode here - the housing market on a broad-based standpoint is bad. This affects personal income of individuals, living styles and habits, and inevitably real estate prices and the general stock market. The subprime market originated $35 billion in loans in 1994. In 2005, $665 billion in subprime loans hit the street. We will see foreclosures start to creep up very soon. “At Risk” mortgage loans are about 17% of the total mortgage market. That is a huge number. Statistics show that 20 months of seasoning after a subprime loan is originated is when things get hairy. If these pan out, the second half of the third quarted and all of the fourth quarter will wreak havoc with our economy.

Protect your assets.

A buddy of mine called me up recently. He said he has an associate (coincidentally his realtor) who is facing foreclosure in under a month. And this person is desperate to avoid foreclosure at all costs. A true investor seeking streaming income will see this as a potential to help someone (which has its own value in itself) in addition to acquiring an undervalued property with ease.

We are in the time of foreclosures. All it takes is looking around. If you spend any time at all outside of the house, it’s virtually guaranteed that you know someone who knows someone else facing foreclosure and desperately looking for a buyer. Talk to people you know. Call up a few realtors. Pay a small fee for one of these online services. I’ve never personally done that one - but I’ve never necessarily heard of them being awful either. Check out blog listings (one great blog I found was http://countrywide-foreclosures.blogspot.com/. There’s about one and a half billion dollars worth of foreclosures for you to pick from). So what do you do then? Do your homework, run your comps, find out if this is really profitable, and get on the phone and make an offer. Don’t be shy or timid. You’re facing a great deal and a chance to help somebody. Properties may go for 10, 20, even 30% below market value.

Great. You’ve acquired a dirt cheap property. What next? Because you’ve already studied your market and comparables before you purchased the investment, you know what this property should be selling at. Now all that’s left over is to do the necessary work to actually bring up to market value. Sometimes, pre-foreclosure properties may need a lot of rehab work. You may have to get your hands dirty a little bit, but at the end you’re looking at turning around and selling this property for a huge profit.

The best part is this - when you’re facing such a generous profit margin - you can always undercut the price ensuring a quick sale. Sure you may get a small portion less, but let’s not be greedy. If your goal is short-term profit (thereby enabling the ability for long-term cash flow), you want to get in and get out as fast as possible.

This article below via UBS tells you one thing - invest into India. How? ADRs, real estate, private funds, public funds, etc. The growth story out there is incredible and if you don’t know what you’re doing you will still make millions just by riding the momentum (however we here at StreamingIncome prefer you educate yourself before investing).
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India’s economy may well have settled comfortably into a high-growth zone where, going forward, 9%-a-year growth rates could be the norm. In fact, it is beginning to look a lot like a force that is well and truly arrived, much like China. That is the estimation of UBS chief Asia economist Jonathan Anderson, one of the foremost economic authorities in the region. “The Indian economy doesn’t just have the potential to eventually turn into a ‘China story’ under the right conditions: it looks an awful lot like China already,” said Anderson. “If we just focus on macro fundamentals, there’s no reason why India shouldn’t be growing at 8% to 9% today, regardless of the state of the bureaucracy and the infrastructure.” Anderson said that for the past eight quarters, the Indian economy had been growing in real terms at a steady 9% year-on-year- or 11% year-on-year if non-farm GDP is considered. And this has come about without “any obvious sign of massive stress in the system”. There hasn’t been any “collapse in profits” as happened in China in the 1990s or any untenable increases in inventories. Even the current account deficit is basically unchanged from a year ago. “Sure, asset markets are hot, but they are arguably far from an outright bubble.”