Montreal, Canada

Some big names in the hedge fund business are currently long and strong the home-builders. Master trader, John Paulson, whose hedge funds circumvented betting against mortgage-backed securities with Goldman Sachs four years ago, is now long the home-building stocks. The man who helped bring down housing now likes the sector. Can you believe this guy?

I’ve got some respect for Paulson because he’s a gold bull. Yeah, he’s got a few more bucks than I do, but in all fairness, I was bullish on gold long before he was. The same goes for Soros.

In all honesty, I have little respect for these hedge fund types because they’re fickle characters; one day in and the next out, regardless of fundamentals. Not my style.

If you’re worried about financial markets like I am and don’t believe we’ve seen the ultimate bottom in stock prices, then consider real estate. I’m talking about distressed residential properties in the sunbelt either for a personal dwelling or rental.

I just made my first offer on a condominium in Montreal. Rates are super low and high-end Montreal residential real estate is still attractive compared to cities like Toronto and Vancouver. I just paid $366 per square foot for one of the best buildings in Montreal. That’s not expensive.

I’m also interested in properties in the ravaged sunbelt. To get an idea about how bad things still are in Florida check out Zillow.com ( http://www.zillow.com/local-info/FL-home-value/r_14/ )

I’ve been harping on this for more than a year. Though the real estate market might not have bottomed yet in the United States, now is the time to start hunting for bargains.

Some real estate bears I know – and they might be right – believe the market hasn’t hit a floor yet as the economy waffles again. But the numbers say otherwise.

As a Canadian or a foreigner, U.S. real estate is cheap. Financing is now at a 40-year low. And the Canadian dollar, at about 1.05 USD, is still a great trade at this price for the Yankee buck.

If you’re planning on living somewhere in the sun, then now is the time to start looking for bargains.

Who really cares if prices decline another 10%? Isn’t that just being greedy? Prices have already crashed up to 50% in some markets.

If you plan on living in your new home or condo in Miami, Orlando or Las Vegas, or perhaps considering renting that property out for income, does it really matter what the market does over the next few years?

I don’t think it matters, unless you’re objective is to flip that property.

I’d be a buyer in places like Florida, California, Nevada and Arizona. Value investors buy when there’s Blood in the Streets. I’m not sure if waiting for a Massacre on Elm Street is going to happen. Prices are already way down and it’s a big buyer’s market. United States sunbelt property is the bargain of the century.

Tomorrow is Rosh Hashanah so there will be no blog. I will post again on Friday.