It is so difficult to sort through the mixed news that we have about the industry. First, there are reports that sales have increased, and the rate of foreclosures are decreasing. However, we have reports that now we are facing a new crisis that could be affecting commercial real estate.
Now, the government has extended the tax credit, and the Fed is keeping the prime rate low, which should be good for buyers. With all these mixed signal, you have to be a fortune teller to make sense of all these signs.
In my humble opinion, there will be opportunities; but they will have to sifted through. The easy deals of the past are not easy to find. To me the great investors are the ones that have easy access to capital, but even more important then the capital will be their access to the teams to help them capitalize on these “diamond” in the rough properties.
Many of these properties will be turnaround situations, which will require competent management teams, realtors, contractors, handy men,etc. to truly make those situations profitable. There is a reason that a property is selling for below market prices, and sometimes investors over look this fact. People need to quit believing that money is risk free easy money.
Obviously, there are good deals with the number of deals in the market. The key to a deal is execution once the property has been targeted. This requires good people to get a property ready to either sell or lease, as well as the right teams to help you market your properties once they are ready.
Many investors often underestimate or downgrade on the importance of these professionals who provide these services, but the fact is that without those quality individuals helping that a property investor will fail miserably to execute their flip or lease strategies.
Another key issue is not determining quality just on the basis of price. As the axiom goes, “you get what you pay for”. Vendors or professionals who do not base service on price alone should be discounted. The value cannot be only measured by the short term outlay, but it should be evaluated in the context of the bigger picture.
Next year will be a great year, but only for those people ready to build teams to take advantage of these conditions. It is very difficult for owner’s to understand that you should not always be a jack of all trades, but a master of none.
We should just be prepared by all these signs we see. So we better get up and make actions for future unexpected problems.
Does seem to me a lot of information out there pointing in all sorts of directions. I try not to even notice it. Real Estate is good for me. Don’t pay attention to the Hype.