My predictions seem to be coming true, commercial real estate is taking a BIG beating right now. People always need a place to live but don’t really need a place to work. With so many mortgage companies & real estate office out of business, law offices downsizing and small business owners electing to set up home offices, the commercial real estate sector is seeing little life. In addition if you add the liquidity issues of the market it’s difficult to get anything done in this arena right now. Take GE for example they bought in 2007 when the market was already showing signs of major slowdown yet GE bought 9 properties from Blackstone Group who had bought the properties from Chicago Billionaire Sam Zell. The bottom line is that all of those properties are not looking good now. One of their prized properties in Oakbrook, Illinois had 16% vacancy when they bought it and now they are at 33% vacancy and climbing. My question is why is GE in the business of buying properties when there are the leaders in the world in so many other industries but know nothing about real estate.
But here is the TURKEY QUOTE OF THE YEAR by GE Ceo Jeffrey Immelt “Today I wish we had less exposure to commercial real estate”. Duhhhhhh Really!
So I am not against commercial real estate if anything 2 years from now it is going to be the way to make huge profits and where I am going to be steering my business to. The only commercial I would do right are master lease options and start get educated so when it turns you are riding the wave all the way to the bank. So here are couple of Real Estate tips;
Foxxonomics Rule # 1: If it’s a hot investment right now don’t buy
Foxxonomics Rule # 2: Never buy properties on appreciation buy below market value
Foxxonomics Rule # 3: Go with the market gives you, don’t go against the current in the market like this, but create your own path instead
Foxxonomics Rule # 4: In this market you have to be very picky and only do the homerun deals.
Foxxonomics Rule # 5: In this market do not buy properties above 65% of market value. So if the property is worth $100,000 you would buy for at least $65,000 or less