How Commercial Real Estate Investing Limits Your Risks

How Commercial Real Estate Investing Limits Your Risks

How Alan Greenspan can jack up your Investing Risks

A couple of months ago the Stock Market did a major overnight Swoon….

Alan Greenspan said the R Word …. Recession

The Chinese stock market tanked while we were sleeping

Dow Jones lost 416 points as if falling right off a cliff

AND every other index around the world followed over the edge like so many lemmings

In the US alone over $583 Billion went POOF because one ex-government employee’s single remark.

The same pundits who wring their hands at such market swings tell their investors that direct Commercial Real Estate Investing is High Risk. That’s another R word getting plenty of play lately – Risk. Tell that to people who rode Enron and so many other stocks down to zero.

It is a great reminder of why you have to invest a portion of your portfolio in Real Estate and NOT stocks. Let’s count the ways.

You Can Calculate Profits Before You Buy

When you buy at the right price and execute on your business plan, you know what profit you will make when you buy.

You can research property values, expected rents and all the other variables involved and get a very good idea of the price you can sell at given the increase in cash flow you can force.

Monthly Cash Flow helps You Sleep Like a Baby

When you hold cash flowing commercial real estate you can sleep like a baby – no matter what anyone (including Mr. Greenspan) says.

That flow of cash comes from processes you can understand and predict. Rent minus expenses. AND you can raise the rents and lower the expenses to force appreciation of your property – that’s on top of the income… cool.

Leverage Like No Other Investment

You can buy $100 in property for $20 down and it doesn’t even have to be your money.

Just imagine going in to Merrill Lynch with $2000 from one of your investor friends and ask to buy $10,000 of stock. They flat out would not know how to respond.

Yet you can bring $200K of your investor’s cash to a deal and buy a $1M piece of investment property any day of the week.

Save On Your Taxes

Name me any other investment that can get you a tax write off year after year – for decades mind you – while it goes UP in value. You have to love Depreciation.

Compare that with Mutual Funds where you might even owe taxes in years where the fund lost money. That’s a real safe investment all right.

So when you are doing your due diligence and making the contacts that will bring a good piece of property into your portfolio, remember the unique benefits of Commercial Real Estate Investing and know you are eliminating some major risks to your wealth.

Forget the former Head of the FED and the market’s drop.

Take your leverage, your cash flow, your depreciation and the fact you can reach out and touch your asset …. all the way to the bank.

And at night, when you are ready for bed, you can forget about the market’s ups and downs and sleep well knowing your assets are in real estate.

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