There is a great story I love to tell about my cousin Zell Kravinsky. At a Passover gathering maybe fifteen years ago, our extended family was catching up on what's going on in our lives.

"So Zell, how's everything?" I asked. "Oh, I just brought a small apartment near the University of Pennsylvania. I'm going to fix it up and rent it,” he replied. "That's a good idea,” I said. 

We all had a lovely evening; and when it was over, we left knowing that we'd probably not get together as a group for another year. 

The next year rolls around. There's Zell. "So how's it going land baron?" I joked. "Oh, I have three hundred apartments", he responded. "Three hundred apartments!? How did you do that?"  Zell just matter-of-factly replied, "You know Mike, it's funny. If you can convince one bank to give you a million dollars, they all seem to want to give you a million dollars." 

Zell hit it just right. The property value of his rentals went up with the market of the mid 90's. But this was not a fluke or luck on his part. He studies this stuff. There are other times he has made money – like as a teen in the stock market (but only on paper).   He also turned a struggling fruit and vegetable distributor into something big. And now this. He just has that skill.   So I figured, why not get his thoughts on our current financial situation?

We talked for about forty-five minutes. Most of what he said went right over my head, but I was able to grasp a few choice thoughts and share them.

First - even with the stock market doing well in the last few days, cousin Zell believes that we have a long way to go before the economy rights itself.  He likens it to a large ship: "It's hard to turn it around; and when it turns, it will go in that direction for a long time. It's gonna take something tremendous, and right now I can't see what that economic factor would be."

Hey, this is a good story: back when we were thirteen or fourteen years old; Zell, my brother, and I were goofing around in Zell's bedroom. We decided to hyperventilate. Zell went last. When he did it; it was with such gusto, that he passed out, hit his head on the door and started to convulse. Zell's mom yelled from downstairs, "Is everything alright up there?" My brother and I opened the door and yelled back, "We're fine up here." The whole time, Zell was shaking all over the place. That was funny. Do you think that Zell became a brainiac after that episode? Maybe we should get a cut, just to be on the safe side. Anyway, I digress. 

Now - the stuff I'm going to share is for people who want to make a profit from their real estate investments, Zell's area of expertise, not for those that just want to buy and hold onto it for years.  

He explains, "A lot of people say the real estate market is gonna turn around in 2010... Where's it gonna come from?"  When it comes to real estate, Zell thinks people should wait it out. He reminded me about the market drop in 1987. The housing prices didn't come back until the mid 90's. 

Zell doesn't believe the average person should invest in real estate right now. "Even if tomorrow it became ‘happy days are here again’, prices are not going to go up ten percent ...in one day. So there's not much harm in waiting."

That being said, Zell noted, "Look, if you’re gonna be in the house ‘til the day you die or go to Florida, what's the difference?" (meaning if you’re in it for the long term, go ahead and purchase).  But he noted that even if you’re ready to buy, it's hard to get a loan. "I mean two years ago all you needed was a face or a name with a vowel in it," he said.

Right now Zell believes it's a good time to be a renter.  "If you want to do something really smart," he said, "go to an REO (real estate office) and cut a deal for a really nice home to rent at a reasonable cost from an investor that may be in trouble." 

Oh, I just remembered this: back in the 70's, Zell and I went up to Penn State, hung out with my cousin Hillary (his sister), and had a terrific weekend that included a fantastic concert by Taj Mahal. That was fun. 

Zell isn't too crazy about the White House's bailout. He believes Obama's plan for mortgage foreclosures is a bad one.  It rewards people who don't pay their mortgage and go into default. "Why am I paying my mortgage when the other guy gets a workout when he defaults?" he asked.

Now, to get on the Jon Stewart bandwagon, Zell believes CNBC has been the ruin of more Americans than any media outlet.   "They all make their living from the myth of money management - the notion that there are people who know what to do with your money.  They all didn't learn to be more circumspect about the other booms. They're not gonna tell you to put your money in cd's,"  Zell laughs. 

He notes that surveys have found that Jim Cramer underperforms. "He's worse than a drunk blindfolded monkey throwing darts at a board." Citing Barron’s article about Cramer, he said "[Cramer’s] a counter indicator. You'll make money if you do exactly the opposite of what he says. Truth is, he's a loser."

 Thanks for the advise Cuz.