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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: dave rose who wrote (6003)	10/11/2002 9:03:15 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

I got a good laugh out of your response. There are times in every property owner's life when you wish you owned paper instead of real property. BTW I know nothing about this REIT you asked for comments on, but I can tell you that while it takes all year to make that 17% return, 17% of principle value can be lost on a gap down if there's even a whiff of a hint of a rumor that they will cut their dividend. Long time ago when I was just a dumb bunny investor I bought a high yielding REIT only to have it become an even higher yielding REIT almost immediately....then came the announcement that the dividend was to be cut in half. They also held a lot of paper instead of property.....something called CMOs, collaterized mortgage obligations. Well at any rate the hedge they had on these things didn't work out well. The end result was it took nearly 8 years of the reduced dividend for the people who invested at my level to break even on that particular REIT. The secret to successful yield chasing is leave the party early, while everyone is still happy, before everyone figures out that there's no logical way that they could be paying that dividend without putting your principle at risk.