Traditional financing should apply to commercial real estate

Q: I would like to invest in land. While residential land is more affordable, I would rather invest in buildable mixed-use land in commercial or industrial zones. How is this type of investing generally financed?
L.Y., Wenatchee, Wash.

A: Although real estate represents a major investment asset for most Americans, John Erb, a certified financial planner in Alexandria, Va., says that typically it is their personal residence that's the cornerstone of any such wealth.

Land investments are usually thought of as speculative and are not suitable for small-pocketed investors, says Mr. Erb.

Nevertheless, to answer your question directly, land speculators or real estate developers usually take out huge loans from banks to finance the purchase of land tracts for commercial and industrial purposes. So you'll need to talk to your financial institution to get the ball rolling.

Q: Do the traditional Series EE Savings Bonds return more than the inflation-protected Series I Savings Bonds? Is it true that the EE bonds only double in value if held a full 20 years?
J.H., via e-mail

A: While the past is not always prologue to the future, savings bond expert Tom Adams says that if you had bought both a Series EE and a Series I bond every month since I bonds were introduced in September 1998, in every case the I bond would be worth more at this moment.

Mr. Adams, author of "Savings Bond Alert," says that a $100 investment in Series I in September 1998 is currently worth $155.48, whereas a $100 Series EE investment bought then is now worth $135.60. Likewise, he says that similar investments in May 2004, when the I bond fixed base-rate reached a low of 1 percent, are now worth $107.21 for Series I, and $105.52 for Series EE.

There is no guarantee this will continue to be the case. But Savings Bond buyers are a wishful lot and since 2001 have put more money into Series I bonds than into Series EE bonds.

Series EE bonds issued in June 2003 and later are guaranteed to double in value in 20 years. Before that, the guarantee was less than 20 years.

EE bonds issued before May 2005 have interest rates that adjust to market conditions every six months. These EE bonds could double in value in less than 20 years if rates go up. But in May 2005 the Treasury changed EE bonds from adjustable, market-based rates to fixed rates. The fixed-rate EE bonds issued from May 2005 to April 2006 will require 20 years to double in value.

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