Tech Stock Investing verse CRE Investing

In the 1970's, I spent a few summers with my grandfather when he needed help working his cranberry bog on Cape Cod. One hot summer day, I noticed he kept looking at the homes being built on a side of Scargo Hill just above Scargo Lake. I wondered what he was looking at and asked.

He replied with a dissatisfied, "I Sold too soon."
Being 16 at the time, I did NOT understand.
He continued, saying, "I used to own that land.  But, I sold too soon.  I should have waited for the developers."

Then, in the 1980's, I moved to Los Angeles and worked in TV and Film production. I remember that the must have investment during this time were the upstart computer companies. They were all the rage. I watched as several of those companies did mange to survive and thrive and grow into the biggest companies in the world. But I also noticed that dozens -- maybe as many as hundreds of these start ups fell into bankruptcy, losing their investors millions of dollars.

During this time, I had bought several residential properties that I would "fix up" and then would in turn 'flip' the property at a profit making an okay amount of money. Then, I'd do it again.

Then, when I moved to Las Vegas in the 1990's, internet companies were all the rage. Again, I watched as several of those companies did manage to grow and become computer internet search industry leaders.  Then, again, there were dozens -- maybe as many as hundreds of these start ups that fell into bankruptcy losing their investors millions of dollars.

But, during the early 2000's, tech stocks still came and went with little fanfare. There was a war against terrorism and the housing market was growing rapidly. And, Las Vegas real estate caught on fire.

However, I stayed away from the Las Vegas real estate growing market because I felt that something was wrong.  Call it a gut feeling.  But, when several of my fellow RE Brokers were excited about the 100% financing on "stated income" loans that Wall Street couldn't get enough of as can't lose propositions, I felt I had made the wrong decision to stay out.

But soon the market changed.  Buyers were no longer qualified to acquire the over priced properties.  And, as time ticked into the future, these very same brokers that were buying real estate; trying to lease up, fix, and flip them at a higher than normal return were going broke.

You see, I felt that it was impossible for a normal 3% ROI in real estate -- that we had for 40 to 50 years -- to suddenly blossomed to 20% ROI in the course of a few years. Of course, some of these investors did make money. But most -- dozens that I can think of out of the maybe tens of thousands that tried to ride this false economic wave -- went flat broke in 2008 when the stock market collapsed. Some of these RE Brokers are no longer in the business.

The rest of us survivors, who were more cautious with our investing, are still here working diligently.

Sure, tech stocks can make you a lot of money.  But, as I learned from my grandfather, real estate is where the smart money is.  And, the real wealthy real estate investors are buying up net leased properties right here in Las Vegas because they know that investing in real estate has a certain element to it known as equity that will out last any stock -- especially since stocks are more vulnerable to losing your hard earned money.

IF a real estate property is acquired correctly, that property should make a lot of money over the years with the consistent rental income.

True, a market crash affects everything. But, even during a crash, the correctly bought rental property income still gets paid. And, you as the property owner, still has income being deposited into your bank account.  It is income that should stay steady even during trying times.

Unfortunately, Tech Stocks don't pay a regular monthly income. You buy it for the proposed dividends and promised stock value increase. AND, you ONLY get this IF the company becomes profitable and the stock increases in value. And, if the value of the company goes down, so does the stock value. And then, where is your dividend? It certainly is NOT paying you a regular monthly income. So, recouping your initial investment is like a tech stock, virtually gone.

And what would you rather have? A valueless busted stock? Or real estate that you "own" and control.  AND, it should over time accumulate equity -- in a normal fashion.

CRE is like a destiny. Its overall value might lower during bad economic times, but YOU STILL OWN IT. It will still be worth something as we move into the future.

And, just like my grandfather had surmised forty years ago, while you wait for the developers, you continue to earn equity.

For more Information about any Las Vegas Commercial Investment Real Estate Property, contact David Howes at: davidATdavidhowesDOTnet OR 702-501-9388!

Few Women Invest in Commercial Real Estate!

It makes me wonder why very few woman invest in Commercial Real Estate (CRE). Essentially, it is one of the easiest parts of Real Estate that you could get involved in. I will admit buying and owning a home is really easy. But, in investment real estate, one of the easiest to own and maintain is a Net Leased Investment. Or, as they are more commonly known as Passive Real Estate Investments.

And as I was investigating another topic, I ran across this article published by NuWire Investments in 2008.  Please spend a few minutes reading this. The column speaks volumes for those of you (women) who would like to do this but just need a place to start.

"Women Investing in Real Estate
Tips and strategies for women who are beginners in real estate investing

Published on: Tuesday, January 22, 2008
Written by: Trista Winnie

There are women all over the country who would like to become real estate investors but many don't know how to start. Some lack knowledge; some, aware that they lack the necessary knowledge, in turn lack confidence. Where should women who want to get started investing in real estate begin?
The internet is a good place for them to turn.
Women who want to begin investing in real estate can learn some of the basics of investing in real estate by reading educational materials online, and they can develop a familiarity with the topic by reading about current events and trends in the real estate market.
Lack of knowledge is not the only thing that keeps some women from becoming real estate investors; fear is also a contributing factor, Charita Cadenhead, founder of Bham WIire (Birmingham Women Investing in Real Estate), a group for women interested in real estate investing, said. "They're afraid of losing money, they're afraid of not making the right decisions...and credit issues are also involved." In addition, Cadenhead said, "they don't know how to get started."

Real estate investment clubs
Providing women with industry contacts and education, real estate investment clubs are a good place to start. Dawn Jordan-Wells, a broker/associate for Hodge Homes, said she recommended that women interested in investing in real estate do a simple internet search for "real estate investing" to find local investment groups to start attending.
"Finding other women to network with was beneficial," Jordan-Wells said.
Real estate investment clubs exist in many incarnations; some are larger and more formal than others. The National Real Estate Investment Association (NREIA) has about 40,000 members in its 230 Real Estate Investment Association (REIA) chapters nationwide, according to its website.

REIAs can expand an investor's knowledge and network
Women interested in investing in real estate, and those who are already doing so, "should get into a REIA so they can get a pulse on the market," Lisa Moren-Bromma, author of Wise Women Invest in Real Estate and Real Estate Investing for the Utterly Confused and president of The Entrust Group, said. Additional benefits of joining a REIA, according to Moren-Bromma, include access to educational offerings and details about legislation that could impact real estate investors. By joining a REIA, real estate investors "are going to have up-to-date information, not just on the markets, but also on the law."
Cadenhead said women interested in investing in real estate should "join those clubs [and] sit in on some of the meetings. They have great guest speakers."
Those new to real estate investing should exercise caution, however, and carefully evaluate what guest speakers say rather than simply taking their words at face value. In some cases, speakers at local REIAs try to sell something to the audience, Moren-Bromma said; new members should "just be aware. Be there to learn, and to network with other people who have been doing this a while," she said.
"I would urge women to be extremely careful in [whom] they elect to give their money to," she said.
In addition to REIA chapters, there are also smaller and less formal investment groups. Jordan-Wells said the website MeetUp.com has allowed her to meet and interact with other investors and those who are interested in investing. She posted an event on the website last August, and now attendance at her monthly meetings about investing has increased from an average of five people to an average of 15 people, she said.
"I'm hoping to grow that," she said. The attendees are mostly women, Jordan-Wells said, and "we just share information and we're more comfortable because, you know, we have that common bond."
Cadenhead also used MeetUp.com to reach out to women in the real estate investment world, and Bham WIire has grown from that, she said.
In addition to investment clubs specifically pertaining to real estate, "I would strongly recommend also looking for support from a general business perspective at NAWBO, the National Association of Women Business Owners," Moren-Bromma said. "They'll get a lot of support from a business owner's perspective and from women in their own area."

Networking
No matter what type of real estate or general investment clubs women seeking to become real estate investors choose to join, such groups can provide them with crucial opportunities for networking, education and support.
"The greatest key is knowledge," Cadenhead said, and women new to real estate investing can benefit from "being around other people who do invest to learn the process from those people."
Learning from and working with other women who are experienced real estate investors can also be a good way to gain confidence. Moren-Bromma said she recommended that beginning investors "work with somebody with some experience in real estate investing—get your feet wet a little bit before you go out on your own."

Learning from more experienced investors builds confidence for many women
At real estate investment clubs, "there are real estate agents and other investors there for them to network with, there are lenders, there are contractors," Cadenhead said.
"Everybody who's related to the real estate industry can be found right there...so they can form their own network there to get them ready for real estate investing," Moren-Bromma said. After joining a group, women should "put a business plan, or a marketing plan, or a road map together—their checklist of things that they need to do in order to become successful," she said.
Moren-Bromma also said she recommended that women put together a team of experts to work with when investing. "You have your financial team: your accountant, your attorney, a property manager if you're buying to hold property for the long term...people that can assist you and be part of your team so that when you go out to identify and find a deal, nothing is going to stand in the way if the deal makes sense. You've got your people, your money—all your ducks in a row."
"If a woman does that, she's going to be very successful in real estate."

Strategies for women
Considering the credit crunch underway across the country, combined with the potential recession, many women who are interested in becoming real estate investors hesitate because they are nervous about money. More precisely, they are worried about not having enough money to be able to invest in real estate.
"I think [women] think that they need to have a lot of capital up front," Jordan-Wells said. "Or their credit may be bad and they don't think they can get started because of that, either."
Cadenhead said that investors will need some money up front. "It's going to take a little money to get started," she said. "Six to eight months ago, an investor could buy a property with no money down and get it financed for 100 percent. With all the foreclosures going on across the country, that kind of put a thorn in that, and so now [real estate investors need] to come up with money," Cadenhead said. "Whether that's 10 percent or 20 percent, a lot of them just don't have it."
Fortunately, for women just starting out, "There's a lot of different creative strategies, like lease options, that they could do to get into a property," Moren-Bromma said.
Buying pre-foreclosures or foreclosures is another strategy that may suit women in particular well for a variety of reasons. While foreclosure properties tend to be more affordable, they typically must be purchased with cash up front. Pre-foreclosures would be a better option for people without a lot of cash on hand.
Another reason is that, because in many cases women are more nurturing than men, a woman "may be able to talk with homeowners who are in [pre-foreclosure] and get them to let [her] purchase a house below market [price] compared to a man approaching them to do that," Jordan-Wells said.
Cadenhead also said the foreclosure market is a place in which many women investing in real estate could find their niche. "I think women will play a major role in their commitment to revitalize areas hardest hit by foreclosures," she said. "Members of my group, Bham WIire, have made a commitment to buying and rehabbing houses in these areas and then sharing equity with properties that they sell. And by doing this, homes become more affordable....We take a little less profit for it, but something has got to stimulate home sales again, particularly in these areas."

Women can utilize their strengths in forming relationships in business
Such a strategy allows the investors to profit not just from the revitalization of a particular property, but from the revitalization of a particular area. Such dedication to a community can improve an area's economic outlook. Cadenhead said this type of investment is well suited to women because "a great advantage that women hold over men is compassion, and empathy."

Outlook
"[Women] are relationship people," Cadenhead said. "We're good at establishing a relationship, we're good at earning trust, and so people want to do business with us. It becomes a lot easier for us to develop a good reputation for delivering a quality product. This is a tremendous advantage [for] women, particularly when it comes to rehabbing property."
Jordan-Wells said she recommended that women who lack experience with do-it-yourself home projects attend classes, such as those offered by hardware and home improvement stores, to learn the basics. Then, if someday they are looking at investing in a property that may require some work, they can make the right decisions about the deal. Do-it-yourself skills could be particularly useful for women who want to rehab properties.
Negotiating can be another important skill for women to concentrate on learning. "[Women should] learn better negotiation skills," Cadenhead said. "Acquire that skill and take control."
Cadenhead said she doesn't think that women are at any inherent disadvantage when it comes to investing in real estate. "I think the major disadvantage is probably internal," she said. "Women only feel that they lack the power and authority. They feel like they can't do it because investing is a male-dominated field."
Moren-Bromma also said that women investing in real estate are not less likely to be successful solely because they are women. "It’s not that it's difficult, it's that women tend not to have the confidence," she said. "Somebody who's persistent and somebody who believes in themselves, whether male or female, will do just fine."

Interesting, isn't it?

For more Information about any Las Vegas Commercial Investment Real Estate Property, contact David Howes at: davidATdavidhowesDOTnet OR 702-501-9388!

Bank Lawyers Screwing Up an Easy CRE Transaction

First: I love Lawyers!  My Real Estate office is inside of a Las Vegas Law Firm.

Second: One of the partners of this firm referred one of her clients to me to help them locate a suitable "new" Office location that they could purchase rather than lease.

Now this!

I wrote a purchase agreement for an REO property in the NW of the Las Vegas Valley. Since the Buyer is the lawyer's client, I had her negotiate the Purchase Agreement. She did keep me in the loop and to my surprise, the purchase agreement negotiations took 70 days!

Now, in defense of the Buyer's Lawyer, this length of negotiation put us behind the timeline for the client's lease termination date.  From the beginning -- and the Buyer's Lawyer did a great job getting replies and responses back to the bank's lawyers -- the Bank's Lawyer's couldn't care less about the Buyer's need for speed.  So, the Bank Lawyers' took their sweet time and did NOT work fast at all.

That leads me to this part of the timeline where the Buyer has to decide IF they will continue on with the transaction; OR, cancel the current escrow so they do NOT lose the Earnest Money Deposit of $10,000.00.  And, that feasibility date is TODAY!

This AM, I get a call from the Buyer's Lawyer.  She just found out that the Parcel Map needs more time to move forward.  Apparently, the Title Commitment can NOT be issued without the Parcel Map, the SBA Loan can NOT be funded without the Parcel Map, and the Parcel Map can NOT be approved by the City of Las Vegas simply because the Ownership Entity on the Purchase Agreement is NOT correct! What?

That's right. When I first submitted our Purchase Agreement to the Seller, I put the ownership entity name that is recorded with Clark County.  When they countered and we began going back and forth, the Buyer's lawyer and I assumed the Seller knew the correct name that they hold title to for the land.

Well, since the ownership name recorded with Clark County is different than the name the Seller put on the Purchase Agreement, technically we do NOT have an executed agreement to buy this particular parcel of land.

Unbelievable!  The Seller Bank doesn't even know the ownership name of the only property they have here in Las Vegas, NV.

So, now, we have to spend the majority of today getting this figured out.  And when working with a large bank who's lawyers truly don't care, it is problematic.

I will follow up with an update as soon as I find out how this is resolved.

For more Information about any Las Vegas Commercial Investment Real Estate Property, contact David Howes at: david@davidhowes.net OR 702-501-9388!