We’ve read all the headlines and listened to the news about the malaise in the real estate market. Some might even believe we’ve heard it ad nauseum.

Does this market have more downside risk? Possibly. Could we be near or at a bottom? Maybe. But as every investor knows, picking a bottom in any asset is nearly impossible.

But what if a stock, beaten down from a high of $18.78 to a low of $1.50 is now showing upward movement? And what if this stock, trading these days at about $5.00, actually pays an enticing dividend of 20%?

Resource Capital Corporation (NYSE: RSO), a real estate finance company that invests in commercial real estate-related assets and, to a lesser extent, in commercial finance assets, is a real estate investment trust (cash dividend now stands at a quarterly payment $0.25 per share. To maintain its REIT status, a company must distribute 90% of its taxable income to shareholders — which is why many REITs pay big dividends.

While the company has experienced several tough quarters, results in the most recent three-month period ended Sept. 30 are promising. The company earned $0.47 per share, up from $0.00 in the same quarter of 2008. At this level, the company can afford its dividend payments. An analyst with FBR Capital Markets that covers Resource Capital expects the company to earn $0.28 in the 2009 fourth quarter, compared with a loss of $0.29 a year earlier. For the full 2010 year, expectations for the company are to earn $1.03 a share, compared with an estimated $0.31 for 2009.

Like all REITs, Resource Capital’s future results will depend on market conditions and financing availability, as well as defaults and bankruptcies by its borrowers and those of its underlying investments. And there’s good news on these fronts.

The economic woes that have plagued California, in which RCC has 38.7% of its collateral, have begun to subside. Exports from California ports are rising, and the median selling value for a home in October 2009 was 21% higher than the low point in February 2009. The commercial real estate market is expected to turn around by 2011, and the demand for office space, in particular, should rise as the labor markets recover.

On the financing front, in December the company had a public offering of 10 million shares priced at $4.50, with proceeds approximated at $42.5 million. Indeed, the offering went well. Some research analysts even upgraded the stock to “outperform,” and shares gained +15% in the following trading week.

Worth mentioning is that recent SEC filings have shown that insiders have been buying RSO. Earlier this month, 200,000 shares were purchased by CEO and President Jonathan Z. Cohen, while his father, Edward E. Cohen, chairman and director, also purchased 200,000 shares. Both SEC filings show the shares were purchased at $4.50 for the Arete Foundation, a charitable foundation for which father and son both serve as trustees.

This 20% yield is not for investors who are risk averse, as many questions regarding this company’s future still linger and hinge upon a recovery in other sectors of the economy. But for investors who can tolerate some risk, the 20% yield should be very enticing.

P.S. Just two years ago, StreetAuthority’s co-founder and Chief Investment Strategist Paul Tracy started an unusual investing program. It loads his portfolio with safe and powerful income creatures paying high, double-digit yields. What’s interesting is that this program is already paying him more than $2,700 a month. In fact, his monthly payments are growing and will soon top $100 per day or $3,000 per month. If you want to transform your own portfolio into a daily income machine, just like Paul has, here’s what to do…