Tuesday, December 2, 2008

Creative Real Estate Investing: New Real Estate Cylce In Play!

Hello All:

I hope everyone had an enjoyable Thanksgiving holiday and didn’t eat too much turkey – I know I did…

Many of you have asked me to let you know when I see another real estate trend/cycle developing, so your wish is my command.

What I am seeing is just starting to develop, that is, another real estate tsunami in the making – Commercial Real Estate ! I was very reluctant to call this cycle until I could confirm this with solid data, and now I have! If you’re an investor stay clear of commercial properties unless you use 1 of the 3 strategies I lay out:

  1. Unless you have someone waiting in the wings to lease or buy said property- don’t touch it with a 10 foot pole!
  2. You can negotiate it 35%-40% under Fair Market Value
  3. You can use a Lease Option to secure the property; remember it’s the ultimate escape clause!

Now there is an exception to every rule, and commercial real estate is no exception. That being said, you will hear people and guru’s hyping up commercial real estate as the last frontier for investor’s to invest. But I believe that we will soon see massive empty commercial dwellings with tumble weeds blowing through them due to the following reasons:

  • Consumers are holding on to more of their income; people are becoming savers again.
  • Christmas sales will be much lower then forecasted causing retailers to close stores.
  • If big retailers who use leverage to buy are feeling the pinch what does that mean for “Mom & Pop” stores.
  • More people are turning to the internet, rather brick and mortar stores.
  • Businesses are filing for bankruptcy at an alarming rate, and start up businesses are at a 35 year low!

This is just a brief schedule of indicators supporting my call – there are at least 50 more…

I have been accused in the past of being the type of person that looks at a glass half empty Nothing could be further from the truth, actually, I look at it half full also! I want to be a balanced investor, looking at best case and worse case scenarios, thereby allowing me to make educated and balanced decisions on my investments. That is how I have been able to survive the last 21 plus years as an investor in changing trends and cycles; now I pass on my observations to you my fellow investors.

Until next time – may all your investments be profitable.

Be well,

James Gage


PS: Don’t forget my 50% Holiday Sale on all my leveraged Investing products – sale ends December 24, 2008