the best time to invest and the worst time to procrastinate (2)

igs Alternative Investment Solutions LLP 39 King Street, London WC2E 8JS United Kingdom Tel +44 (0)20 7395 6800 Fax +44 (0)20 7395 6801

[email protected] | www.igsgroup.co.uk |Partnership No. OC328876 IGS AIS LLP is a member of the IGS Group Ltd. Authorised and regulated by the Financial Services Authority

VAT registered - 918509309

The best time to invest and the worst time to procrastinate We are faced today in most major residential markets of the US the question of whether falling prices have reached the point where one could feel it is time to invest, given the conflicting signals in the economy. One could focus on the unemployment figures or the amount of US debt, and the inability for consumers to take on more debt or the increasing amount of foreclosures. All of these might allow you to procrastinate and ponder. There is no ‘signal’ to let you know it’s now time to invest in US Real Estate. David Michelson, as advisor to the US entity for CDLAF, has since 2006 been telling groups of institutional investors that the real estate market was significantly over valued and a significant correction would drive down prices back to per 2002 values. This has been well documented and can be seen by reviewing past articles via Google searches or by asking IGS Group to forward previous communiqués on the outlook for the real estate cycle sent out since 2007. In the advisors opinion the current market has finally reached the point where we are now seeing the cost of ownership is less than the cost of rents, which is a change as of 60 days ago. During each of the past three recessions this was the point where the market found stability and then took several years for the inventories to be absorbed prior to any meaningful price appreciation. One can always question the wisdom of buying, and be cautious to the point that you miss what will prove to be the best opportunity since the 1990’s meltdown. During the last 30 days the articles and statistics have been rather one sided: The S&P /Case-Shiller Index is up slightly for the first time in three years New homes sales increased more than forecast by 11% in June over the previous month On its July cover Newsweek Magazine states the Recession is over The Wall Street Journal latest quarterly survey of housing related data shows residential

real estate is healing The National Association of Realtors in June reported resale’s up sharply at an increase of

3.6%, the third consecutive month of increasing sales. Mortgage Programs have been modified to provide for incentives to first time buyers making them more consumer friendly

Dean Baker, Co-director of the Center for Economic and Policy Research, indicated the data suggests that “ the free fall in housing is clearly over”

The Federal Reserve’s Beige book reported many regions have begun to stabilize, bolstering hopes of a broader based recovery later this year




We believe that CDLAF has a unique opportunity in the next 12 months to focus its acquisitions on the mostly completed foreclosed residential projects in both single and multifamily housing that have suffered because of the liquidity crisis, but can be repositioned to become successful projects without the need for price appreciation via an approach to bring value back into every aspect of investments in this fund. CDLAF plans to be the “99 cent” real estate fund in that we will focus all of our investments on affordable housing projects, affordable rental projects and inexpensive room rental rates for hotels. We believe the US consumer has been significantly affected by the meltdown in asset values and today has a modified outlook of requiring value in all aspects of their transactions. CDLAF shall determine which projects meet the following conditions:

Strong demographics with stable employment and good future prospects

Inventories falling to levels of normality with some barriers to entry

Clear exit strategy

Compelling affordability (ownership should be cheaper than rents)

Purchase price 50%-75% below peak values CDLAF will follow a very simple plan, by investing in mostly completed projects that can be brought to market and made functional in a timely fashion. We believe that right now is the time to invest -no bell is going to ring any louder than the list of economic and statistical signals we are now seeing. For further information please contact IGS Distribution:

[email protected] + 44 (0)207 395 6800

mailto:[email protected]




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the best time to invest and the worst time to procrastinate (2)

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