The Right Situation
Some folks are still waiting for the bottom of the commercial real estate market. Nobody rings a bell at the top or the bottom! The right situation is what you are looking for. Right now you can buy industrial real estate with AAA tenants & 20 year leases for a 9% cap. Do you care if prices fall further? Of course not. You have locked in an income stream at a great rate. Some day, maybe 5 years from now you can sell that income stream at a 7% cap & you made 20% per year in a very low risk venture. Determining the tenants credit is the key. Don't speculate, audited financials are required. Don't over leverage, 50% LTV gives you a nice cash flow while you wait for sanity to return to the market.
I don't need any sexy black glass towers with tenants going broke. Give me down & dirty industrial every time....
Lee Topham
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Comments (1)
I don't know much .... specially about commercial....but somehow I understood what you meant..,,lol! ..It sparked my interest anyway! Now i can look into further, who knows what I may learn!. :) Happy investing!
Socorro Garcia, almost 15 years ago