Saturday, May 28, 2016

History shows businessmen make bad U.S. Presidents

Every once in a while, some one, somewhere comes up with the idea that the President of the United States should be a businessman.  Well, it's not anything new.

There have been several Presidents that have been businessmen; and as this article outlines, they have turned out to be some of the worst Presidents in the history of the US.

Now, when a businessmen runs for President of the United States, they usually stand on the platform of their business accomplishments.  They pontificate how they -- as a successful businessman -- can get "things" done.

What they forget is that in order to get anything done in Washington, D.C. or even passed by Congress is: you need tact and tenacity.

However, most businessmen have tenacity.  It's essential to their job.  But, the lack of tact is what usually dooms them as President.

A lot of my fellow real estate broker colleagues criticize Obama.  They think he has been the worst president ever.

But what I see is a man who has a tremendous amount of tact and tenacity.  Even if you disagree with Obama's politics, Obama did get things done -- even though he was slowed by a do nothing Congress.

And, that in itself was a helpful element to Obama's success.  The reason is, when Congress does nothing, the business environment is supposed to improve.  Obama did take over the office at one of the worst possible times.

The World economy was in a deep recession -- maybe even a depression. (I will let the economic scholars decide.)

But, even while being criticized heavily from both sides of every issue, Obama maintained his tact and tenacity.  He was able to accomplish more than I thought he would.

While searching the internet for businessmen that were elected US President, I found this article.   Here a retired military officer/physician did some research and points out that every businessman who was elected US President, turned out to be a bad President.

So, to see what I am talking about, please read this article.

(You may have to copy and paste the links in your browser to review.)

Read and enjoy.

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88 AND Follow David on Twitter: @DavidAHowes

Wednesday, May 25, 2016

Chinese Investors Pour Money Into U.S. Property

This is nothing new.  For several years now, I have heard this tune and it doesn't seem to be letting up.

And with Chinese Companies like Anbang and FoSun acquiring US commercial -- and specifically Manhattan properties -- I don't think the trend is going to end.

The latest is: "China Life Insurance team with US developer to purchase Manhattan office tower that houses UBS."

Now, since commercial property sales have slowed in the U.S. so far this year, it appears that Chinese investors are able and brave enough to continue to plow money into this market.

So far in 2016, Chinese companies have purchased or will closed escrow on 47 U.S. properties worth $9.3 billion -- according to deal tracker Real Capital Analytics.

See the article linked here:

I just hope that these companies will turn their CRE acquisition attention to Las Vegas, NV as a place to invest.

With Las Vegas recovering from the 2008 economic collapse and affected property values dramatically lower, I believe the time is right for Las Vegas CRE to launch into another value increase.

Which means YOU should be taking advantage of these lower priced Las Vegas CRE properties.

So, IF you have any questions about investing in Las Vegas commercial real estate, contact me with your questions and I will reply as quickly as possible.

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88 AND Follow David on Twitter: @DavidAHowes

Monday, May 16, 2016

8% Cap Rates have returned to Las Vegas!

This is to alarm you!  I am trying to wake you up!  Las Vegas CRE property prices have gone down, enough, to start telling everyone that there are now 8% Cap Rates available!

Generally, in Las Vegas, NV, most properties that would be listed at or near an 8% Cap Rate are properties I would NOT recommend to you.  These properties will have lots of hair on them and trying to trim the excess follicles will be daunting.

And, most of the problems could be that the tenant leases have less than 3 years remaining -- with no more tenant options; or they are a weak non-denominational church (type) tenant; or they are basing the 8% on whether or not the new owner will be able to re-lease the remaining vacancy up in a short time period post escrow (Not Likely).

However, because of the state of the economy, I have complied a list of CRE proeprties that you could acquire at an 8% Cap Rate or Higher.

So, if you have been considering acquiring a Las Vegas CRE property, I am now telling you, you can acquire that property for an 8% Cap Rate right here in Las Vegas, NV!

Where not even a year ago, these very same properties might be offered at a 6.5% Cap Rate range, you are now seeing them at 8% or Higher.

Now is you chance to acquire a property with better tenants or longer leases in the existing property.

For a complete list, please email me and i will reply with the list. Prices run from $600,000 to $10 Million.

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88 AND Follow David on Twitter: @DavidAHowes

Saturday, May 14, 2016

Has the Fontainebleau Las Vegas become a Joke as well as an Eyesore?

Several years ago, I wrote an offer for this property.  The Japanese Buyer I represented said $450 Million was enough.  He believed -- as I do -- there was a lot more work to be done than met the eye.

When Carl bought this out of BK on 2009, that left a lot of unpaid sub-contractors who eventually had to close shops. True: That's not his fault.

(Full Disclosure: my wife's company worked on this and was owed hundreds of thousands of dollars, which was then in turn owed to other vendors for products they didn't get paid for.)

But, Carl paid $156 Million for this property and then did nothing.  Everybody knew Carl was just going to sit on this.  And the reason he sat is because: Carl is NOT a developer.  He built his reputation on being able to buy companies cheaply, then sell off parts for more money.  I say: Good for him!

But, I do believe that his acquisition of the Fontainebleau Las Vegas has become a mistake.

Yes, I wanted to list the property and was denied.  That's okay.  I can now sit and watch the unfolding of an over priced building slowly, slowly falling apart.

In the picture, I took while on the 'Strip' with out of town family just this past Friday night, the Fontainebleau Las Vegas does appear to be slowly rotting away.

The sunset gives the abandoned property a certain haze that does suggest that no one really cares about it anymore.

Anyway, I am more convinced that this property -- which I still believe is located on the wrong section of Las Vegas Blvd -- isn't worth the $500 Million Carl's CEO told me he thought it was worth three years ago.  (Then, again, Carl's CEO opinion isn't the important one.  Carl's opinion is the only one that matters.)

So, when it was surprisingly listed this past November for $650 Million, I was floored.  You got to be kidding was my response.  And, the fact that the listing broker said in a reply email to me that they weren't going to split any commission, I thought: How greedy?  (I have a copy of the email stating that they were not sharing.)

So, I am now working on other properties with other sellers/buyers and I am trying my best to convince them that the 50% completed Fontainebleau Las Vegas isn't worth pursuing.  I truly don't see the value given that Resort World and the Alon have stalled in their construction.

So sad.

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88 AND Follow David on Twitter: @DavidAHowes

Sunday, May 8, 2016

Has Resort World Hit a Glitch?

I do know that Boyd Gaming wishes they had never tore down their Cash Cow Stardust property.  It was old and out dated, yet it was paid for.

Resort World, came to town and quickly snapped up the mostly vacant lot for an exceptional price.  $350 Million for +/-88 acres OR just under $4 Million an acre.

But, now I think, Genting Gaming finally realizes they bought on the wrong end of Las Vegas Blvd.

"The Strip" as it is known worldwide, runs from +/-Russell Road at the "Welcome to Las Vegas Sign" up to and including the Venetian and Palazzo Resort.  Anything north of the Spring Mt and Las Vegas Blvd intersection is truly NOT on "The Strip."

Now, Steve Wynn will say he's on "The Strip."  Ok, I'll go along with that simply because he's right at the NEC of this very intersection (Spring Mt turns into Twain from Las Vegas Blvd east).  And the Fashion Mall is on the NWC, so I'll allow them to say they are on "The Strip" too.

But, since the north part of this intersection has never truly ever been financially successful, it truly isn't "The Strip."  You see, the Strip is the section of Las Vegas Blvd where there are +/-100,000 people walking to and fro from one casino to another.  It is essentially the Entertainment Corridor that made Las Vegas famous for being the fun, party city it is.

And, if you ask most people what Las Vegas Blvd intersection they know the best or think of when they think of Las Vegas, they will say Tropicana and Las Vegas Blvd.

Now, as for the North end of Las Vegas Blvd, the Fontainebleau at maybe 50% completed sits unfinished because it is way, way overpriced.  I wrote an offer for it a few years ago at $450 Million, yet that was turned down as being too little.

The Alon, which sits almost directly across the street from the Wynn, is (apparently) struggling to raise the additional $300 Million needed to begin construction.

And, Wynn is proposing to build a +/-40 acre lake that will draw hotel guest away from the casino and out into the bright hot sun.  A Retired Gaming executive once told me you don't want your guest just sitting around lounging by the pool.  You want them inside the casino -- gambling.

Anyway, I always felt that Steve Wynn knew what he was doing.

Anyway, here is an article from Motley Fool you should read.  I feel it explains a lot about the North end of Las Vegas Blvd and the lack of construction in this area.  And, since there is very little foot traffic in this area, it is NOT the section of "The Strip" or more accurately Las Vegas Blvd that will be successful.

(You may have to copy and paste into your browser.)

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88 AND Follow David on Twitter: @DavidAHowes

Sunday, May 1, 2016

Real Estate Expert Says Buy and Hold Strategy is the Best Way Investors Make Money!!

Surprised?  I'm not.  When I read this, I understood completely that the best way to create wealth for oneself is to acquire and hold (rent out) real estate.

Just in case this was NOT news for everyone in the good ole US of A!

Buying real estate and holding it long term (leasing it to tenants) has always been the best way to get the best return on your real estate investment.  Two-Thirds of all Billionaires have made their billions using this concept.

Now, this may NOT work as well for single family homes and condos.  BUT, in the CRE world, the best return has always been the one held over the long haul.  Buy now; and Sell years from now when the investment has run its course.

If 2/3's of the billionaires in the US attribute their wealth to real estate, it should NOT make anyone say: Golly, gee wiz!

Recently, there was a Blind Item about a Celebrity who made +/-$100 Million during a ten year period who is now (essentially) broke and living off his actress wife's savings.  Now, I could guess at who this might be; but I won't because I find this Blind very hard to believe that anyone smart enough to make $100 Million or $10 Million a year would actually be stupid enough to invest so recklessly.

But if it is true, the celebrity is a complete moron for NOT diversifying his investments and for falling victim to the (supposed) high yield return scheme.

What's the old saying: Don't put all of your eggs in one basket.

Now, if you start small and work your way up, such as buy one rental property at a time; or, one small commercial real estate (CRE) investment at a time, over time, the return on the real estate will eventually pay off. (Such as the recent posting about the 9% Cap Rate property located in Las Vegas, NV I blog about last month.)

And, for you who are new to my blog, buying Las Vegas real estate does have a long term value increase preset before the 2008 economic meltdown disaster.

Most people who had acquired their Las Vegas properties a long time ago, did NOT lose their property during the recession because they had so much invested in keeping the property up to date; and they did NOT over-encumbered it by a high LTV loan.  Never pay off credit card bills with your real estate equity.  That is just dumb!

So, smart real estate investors, you know the drill...

Contact David Howes either by email: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88 AND you can Follow David on Twitter: @DavidAHowes