Last minute deal or unique opportunities are the root of modern private investor’s failures, in a time of too much information many will fail into the trap of supposed knowledge. Most of us think by informing ourselves first we can make decision on what to buy, sell or trade, in some case it will work for a short time but let’s be serious : many informative article are disguised advertising. The true of the matter is, unless you spend a lot of time and take some serious training (not weekend investor classes), you will not be really informed on the market and ready to make the best decision related to your need and fund. Real Estate has been and still is a very safe place to park money for short to long-term return. What I mean by short is either a quick flip of a distress property or a holding period of less than 3 years. Taking in consideration that cash buyers are in prime position for those investments, you will need to have your agent explain to you the capital gain /closing /repairs and closing cost to make sure that it will really work and be worth the risk. Data are your best friend and asking for them is wise as it is more difficult to make rational decision when numbers given to you by a professional actually back up what he or she said about this “great deal “. Long term investments are easier and less risky (5 years and longer holding period), as long as you do not sale you will not lose any money so even if the market crashes this will only be a problem if you need to cash out on your investment. Return should be calculated by looking at what the cash return yearly is and also on what is the plus value of your related investment, accountant are your best friend and they can work miracle in redistributing losses and gain to balance a profitable portfolio. Many will accept a sorry 0.8% return on their saving at the bank but expect a 7 to 10% on real Estate, greed is not a good advisor so be careful of claimed high return, most of the time this will mean either high risk or false information. The market is showing a lot of hesitation now and more than ever opportunities are right for the picking but the risk is getting higher in some area such as Miami downtown and Brickell. Larger rental complexes seem to be perfect and the demand stay constant, at the opposite retail spaces and warehouses show sign of slowing down, owning lands are still a good move but only for an investor looking to make return at their development or sales.
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