1. Omaha is on the leading edge of the nation’s economic recovery, but
2. That does not guarantee your investment will be profitable, however
3. Careful consideration of a properties potential advantages and potential pitfalls will help you make the best decision, therefore
4. Do not be afraid to investigate opportunities, and
5. Make sure you and the investment are WELL capitalized

A few simple rules to follow making 2010 a safe and profitable year in Real Estate.

2010 will continue to see tough credit and cash requirements from commercial lenders. This does not mean financing is not available, only that the lending institutions are going to expect to be in a safer position with lower loan to value ratios and a more critical look at the borrower’s credit and the property’s value and income potential.

Kenneth O. Riggs Jr. CCIM, CRE, MAI wrote a great article in the January/February 2010 issue of Commercial Investment Real Estate Magazine. This article is an honest and critical analysis of the issues investors will face in 2010 and where opportunity might lie. The full text can be read at …. http://www.ciremagazine.com/article.php?article_id=1477

Mr. Riggs said “Commercial real estate continues to suffer on two fronts: space demand… and upside-down credit…” These issues plagued 2009 and will continue until consumer confidence returns and production demand results in American business growth.

He also said “…investors will hunker down; face gut-wrenching issues, and make difficult decisions. But 2010 also may be a good year for investors to purchase quality properties at reduced prices.”

Real Estate investing in 2010 will not be for the faint of heart, and cash will be king! This means however excellent opportunities may present themselves at any time and you need to be ready.

I have one client that through 2009 said “I’m keeping my powder dry” meaning conserving their cash so they would be in a good position to capitalize on these opportunities when the present themselves.

But consider this… a building that is a bad location  for a restaurant might be a great location for an office space.  Understanding your market area is essential.  Know where the traffic is and how the access to the property works. Understand zoning and planning. Understand the growth of your community and the demographics.

All these factors go into a good location decision.

Understanding the relationship between risk and return is also an important element.  

Planning you personal budget to make sure your living requirements are met and the amount of money you are setting aside for investing is not going to put your budget and credit at risk.

Then meet with an experienced Broker that understands short and long term investing and has the investors best interest as a primary focus.

Today I want to make three points.

1. In a economic downturn Real Estate prices will often go down as the demand for property slows.
2. The income generated in some properties are tied to a long term lease that may not be effected by the price decline.
3. If the tenant is financially stable and there is not a separate reason for the business to leave a property the lease term may out last the down turn

The result is a purchase that will result in a higher return without significantly higher risk.

Very specific rules need to be followed to qualify the transaction for the tax deferment and employing someone with experience in the investors specific property or investment is essential to make sure the transaction is completed properly.

Understanding the pitfalls and recognising the potential of an investment requires a discerning eye and an understanding of the market conditions that could affect the property. I will bring that expertise to the table for you.

If you are making your first investment or working on a larger portfolio, I can help.