1. Stock Market Analysis and Personal Finance Mr. Bernstein Real Estate Investment, pp 352-360 November 2015

2. Stock Market Analysis & Personal Finance Mr. Bernstein Direct Real Estate Investments Purchase of legal title to property Is your home an investment? Can a vacation home be an investment? Rental units – duplexes, storefronts, apartments, etc. The US Government offers tax incentives to purchase many types of real estate 2

3. Stock Market Analysis & Personal Finance Mr. Bernstein Indirect Real Estate Investments Limited Partnership (no longer carries former tax advantages) REITs Profits from Real Estate operations flow through to holders pre-tax Often pools of investors and diversified portfolio of assets Often trade on an exchange like a stock or ETF 3

4. Stock Market Analysis & Personal Finance Mr. Bernstein Advantages and Disadvantages of Real Estate (+) In theory, will rise with inflation (+) You may have personal information about properties that most potential investors do not (+) Indirect investments provide diversification and limited liability (+) Lenders allow considerable leverage – 50-75% not uncommon (+) May reduce risk of overall portfolio (-) Direct investments are illiquid 4

5. Stock Market Analysis & Personal Finance Mr. Bernstein Home Prices versus Inflation 5

6. Stock Market Analysis & Personal Finance Mr. Bernstein Home Prices down because Ownership is down 6

7. Stock Market Analysis & Personal Finance Mr. Bernstein Ownership is down because Income is down 7

8. Stock Market Analysis & Personal Finance Mr. Bernstein Ownership is down because Income is down 8

9. Stock Market Analysis & Personal Finance Mr. Bernstein Bad news is: Ownership down, so rents are up 9

10. Stock Market Analysis & Personal Finance Mr. Bernstein And its worst in the Northest region… 10