I recently wrote about how after 14 year…

I recently wrote about how after 14 year…

I recently wrote about how after 14 years of renting, saving and waiting for a real  estate market collapse that I finally stepped in and bought some land in  my hometown in the beautiful mountains of southeastern New Mexico.   Long story short, using a local real estate agent upon my return home  from NYC, I found some beautiful acreage at 70% off its list price from  2007 and 30% off where they had it listed before I bid.

Sunset from the new Silver Fox Ranch

Long-time readers also know that I’ve sometimes talked about the hate-o-meter I pull out to measure just how anger readers are expressing and just how passionate people are about why I’m stupid for whatever investment I’ve written about. I’ve used the hate-o-meter as a barometer for more than a decade and after having written more than two million words in thousands of posts about the markets and investments during that time, I’ve learned that when the hatred from readers really spew that I’ve probably made a great trade. I suppose it’s sort of a real-time indicator of the old concept of buying when they’re fearful and selling when they’re greedy.

Take a look at some of the feedback I got from readers and tell me if  people are fearful or greedy at this stage when it comes to real  estate:

EslashM wrote:

You would have to be CRAZY to invest in U.S. real estate right now. Buy food instead.

oa wrote:

Where do you buy land in NM??  Aren’t they all desert there??

Bob Torrance wrote:

If sand-blasted sun-bleached cow and horse head skulls are your thing.

Unless you are retired or rich, New Mexico isn’t probably the place for you.

I own two companies, one builds very high-end homes in the Western   U.S., and the second helps corporations look for new facilities.

Every time we look at New Mexico we keep looking.  Here’s why:

1) Not enough high technical workers with advanced engineering degrees

2) Poor financial / investment banking climate

3) Corruption.  Our clients have found that government development   liaison either out-and-out ask for a bribe or they say something like;   “Can you hire me as your community relations advisor?”

4) Our clients don’t like the elementary and high-school education system for the children of their employees.

5) But, the biggest problem is WATER.  Manufacturing and production   take lots of water, semi-conductor, solar panel, automotive   manufacturing, energy, etc., all take a lot of water.  New Mexico is   great for a wind farm or solar farm, but is not the place to build the   components.  Each of our clients have looked at the future of water   going forward, 10, 20, 30-years down the road, and decided that New   Mexico is NOT the place for any new large scale M&P facilities.      Even new agriculture shy’s away.  Some counties in New Mexico can only   sustain 1 cow per 100-acres.  So, big ag looks elsewhere.  The lack of   water even keeps oil and natural gas exploration in New Mexico at bay,   they are very careful about the amount of wells they will drill there in   a year.

Unless you can sit in the sun and paint, are a Hollywooder looking   for a ranchette, Ted Turner, John Malone, or Don Quixote, or are a   tumbleweed collector, New Mexico might not be right for you.

FilthyBeast wrote:

Bipolar is nothing to fool with. Get help.

Paul wrote:

New  Mexico? What a god-awful place. Endless boring  desert scrub in the  south, freezing cold in the north. Garbage  everywhere. The reddest state  in the inter-mountain West. A good place  to get robbed or stabbed on  the weekend. in the towns.

Other than that, I agree that RE is decent value. But my attitude is   take advantage of the cheap dollar by buying where foreigners want to   buy, and that ain’t New Mexico. California, New York area, Florida,   Colorado.

Craig wrote:

Until fannie and freddie are gone u r getting hosed on any and all real estate transactions

Tom wrote:

Not  knowing the first thing about the property that you  are purchasing,  I  can’t comment on whether your price is a good value  or not, however the  logic you present for your purchase falls guilty of  the same logic that  you mocked in the rest your comments.

If you were claiming late 2007 that “there had never been a better   time to sell real estate than right now”  inferring that you are   necessarily getting a steep discount because you’re paying less than 1/3   of the irrational price doesn’t make any sense if that land was  selling  for 3 times what it was worth then (and if housing prices were  twice  what they were then, developable land probably was 3 or more  times as  the value of land reflects the premium of homes would sell for  over  construction cost times the number of homes that could be  developed on  the given parcel).

I am meeting the water well driller, a kid I graduated high school  with who’s a third generation driller running the family’s company now,  on Wednesday to find a spot to put it, and I can’t remember the last  time I was this excited about something I bought.  If ever.  And more to  the point, I don’t think I can find a safer investment with better  upside potential  than this real estate deal I just closed on.   And now  with that said, I will note that I’m planning to  build a home or two  on there and leave this particular piece for my  kids, if I ever have  any.

Lobo at the Silver Fox Ranch gate

In the face of all this bashing of my real estate investment  decision, I am even more emboldened about the risk/reward potential.    But I do have one serious question here — what’s up with all this  disparaging New Mexico?  Bashing me and my investment decision is one  thing…but don’t mess with my once and new home, New Mexico, baby!