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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