Wealth Opportunities in Commercial Real Estate: Management, Financing, and Marketing of Investment Properties

Concerns about the Solution

Keep in mind that no solution is a panacea. If you find yourself at a cocktail party and hear someone saying, “Buy real estate, you can't lose!” know that they are not telling the whole story, or that they have had one too many martinis. Caveat emptor. Care must be taken when purchasing real property. Buying real estate does not guarantee a profit. You can also lose money! If you purchase properties that have problems or that develop issues, your result may be a negative cash flow. Real property value is based upon rents derived from the project. If major tenants do not renew their leases or if they breach their leases and vacate the property, the resulting cash-flow disruption usually translates into problems. You can end up feeding the property instead of reaping a positive cash flow. What is more, purchasing marginal properties with marginal returns does not result in wealth creation. It results in marginal returns or even in losses if something goes wrong, which it often does. In part, proper due diligence procedures and follow-up on your part will avoid these results, but ultimately it is your execution of a viable game plan and your vision and foresight that will make the difference between winning or losing.

There is also the question of how to get started. When discussing The Solution with individuals seeking to escape the earn-pay tax-spend cycle, the first and foremost comment I often hear is: “I can't achieve this. I can't afford the down ...