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Investing in Commercial Real Estate – Back in the Game
Posted by: | CommentsGreetings from Cedar Crest, NM….
I am still trying to get back on top of things. This summer has been extremely busy….but great too!
I have received a number of emails regarding my blog. Honestly….I was surprised. Thank you! I need encouragement all the time and your emails and your request for me to write more has given me the inspiration to start again….so….here we go.
A jump start in the real estate market? Well….yes and no.
I do most of my investing in the Southwest. El Paso, TX is going nuts. Did you know El Paso is experiencing a housing shortage? A huge deal indeed. Last year my partners and I purchased a down-and-out apartment complex and today it is running 100% occupancy…..that is after rent increases. Yes….more rent increases on the way. This apartment complex blew our conservative analysis out of the water. Now….investors are heading to El Paso, TX from all over the country. 2500 units online to be built in 2011. Experts are saying that is 5000 units short of what is needed. Unreal!
Well…what about Albuquerque? As an associate broker with Grubb & Ellis | New Mexico, I am seeing a hint of recovery. We are seeing an increase demand for retail space and a little more activity in other real estate sectors. Although we are no where close to what the demand was two years ago. Albuquerque commercial real estate is doing much better than 2009.
Overall, I strongly feel this is a great time to invest especially in markets that have hit bottom and are now starting to see a hint of recovery. In the Southwest, El Paso, TX is well on its way. Albuquerque, NM is starting to crawl out. Keep an eye on Arizona and Nevada….I am predicting that it will take a little longer for them to hit bottom. Hard to believe it could get worse for those states huh? Maybe I am wrong. Either way….the time to buy is here.
Until next time……rob
Savvy Commercial Real Estate Investors are Sitting on Their Cash for Now
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Greetings from Albuquerque, New Mexico
‘A whole lot and a whole not’ sums up the last few weeks here on the blog.
How long has it been? Well, it has been one heck of a ride for the last few months. I have been attending a few luncheons, a couple seminars, and a handful of meetings and they are all saying the same thing:
‘Cash-rich investors are sitting on their money waiting for commercial real estate to hit bottom.’
Once it does, the assumption is the investors will jump in with both feet. This is what is called vulture investing. You can read more about it HERE.
The belief is that there will be a dramatic tipping point sometime late this year or early next. The assumption is that this ‘tipping point’ will start with the banks doing a mass liquidation of assets that are on their books. This huge sell off will be a mountain of discounted assets in order to move the assets quickly. This will led a domino effect that will dramatically pull values down even more. I guess the real question for me is what is taking so long? We are seeing a little bit of liquidation here and there but not what everyone was expecting.
Although there is some positive press that things are turning around. Most experts don’t buy it. What do you think?
When a question like this comes up, I start following the money. The problem is the money is not going anywhere….hence…there is my answer.
Until next time…..rob
The Best Investment Advice …. “know What the #$%@ You are Doing….”
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There are so many opinions on what the best investment vehicle is….there are so many cliches on how to invest …..there are so many books on investing strategies ……and on and on. Why? Well….because almost everyone is asking the same question and everyone has a different opinion. The real dilemma is that there is not one answer….although any guru will want you to believe that there is…. and they do their best to convince you they have the answer. Seen any ads on gold lately?
Sitting in the audience not too long ago, I heard a speaker/guru that I respected very much say the stupidest thing. I heard him say “….investing in the stock market is a dumb thing to do because there is so much risk.” Granted he was selling his “silver bullet” program but….what a dumb thing to say. I know so many people that have done so well in the stock market in good times and in bad that I know the stock market is a great place to invest…..I say what with caution…keep reading.
I have also heard people say that real estate is a bad investment. When we all know people that have done well in real estate as well…whether the market is good or bad….again…I say that with caution….keep reading.
Of course there are horror stories for any investment vehicle…whether real etate, stocks, businesses, etc. BUT….there is one very clear statement that makes all the sense in the world in whatever investment vehicle you are investing in:
“Know what the hell you are doing…understand what it is that you investing in.” – me
In other words, have a good understanding of how your investment vehicle works. If you don’t understand it, don’t do it unless you are willing to lose. Then…if you lose….don’t #$%@!$ about it.
What I am saying is a knowledgeable investor will understand the risk, do what he or she can to mitigate it and roll with the punches of the investment. A savvy investor will do all this while taking advantage of the cycles that ALL INVESTMENTS go through.
Savvy investors know that losing money is the cost of doing business….but the key is making more than you lose. The way great investors do this is by spending the time educating themselves, seeking advice from successful investors and professionals, and mitigating risk.
Investing with little or no knowledge of what you are doing is what I call “Vegas Style Investing.”
So…then next time someone on stage or TV tells you their opinion on investing….take it with a grain of salt. Remember there are success stories with almost every type of investment vehicle as well as horror stories. The key is to understand the investment and know what the heck you are doing.
Until next time…..rob