Archive for March, 2011

CRE Private Lending – A Performance Based Industry

March 31, 2011 Leave a comment

People from New Jersey sometimes have a unique way of getting their point across. In the commercial real estate and finance business, individuals are gruff and take crap from no one.

I grew up in Woodbridge, NJ, which is about 30 minutes by train to NYC. When my Mom was walking out the door, if we asked where she was going, her response was typically something like, “Up the pig’s ass for a ham sandwich. You wanna come?” I miss my Mom, she had a great way of getting her point across.

Negotiating is an Art

I recently had a conversation with Mike Paff, a real estate broker in the Northern NJ and New York City Metro area. Mike is has a wealth of experience and an excellent grasp of his market. We discussed the lending business and how all the players take a position and are not willing to budge. Buyer’s brokers end up contacting everyone they know to get the same answers. Some lenders will scrutinize a $10 million loan more than a $100 million loan with lower ROI. It is difficult to understand their position because they don’t publish their criteria. It’s all about negotiating and not losing your position because you overlooked some important information. According to Mike, “in the process of negotiating commercial real estate, everybody must be willing to lose the same number of fingers.”

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Investing in Multifamily Real Estate – Where’s The Beef?

March 24, 2011 Leave a comment

Investing Multifamily Real Estate

Where’s The Beef?

I recently went to a networking meeting where a young real estate investor spent about thirty minutes talking about how investing in multifamily real estate is making him wealthier than he ever imagined. He claimed to get into the business with no cash using other people’s money (OPM). So why was he in a networking meeting trying to make connections? There’s a special place for people like that.

Is there money to be made in this area of real estate? Absolutely! To succeed you need what I like to call the 3 C’s and some B’s. Capital, Credibility, and Crystal Ball(s).

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Commercial Real Estate – Best Hedge against Inflation

March 15, 2011 1 comment

Commercial Real Estate – Best Hedge against Inflation

According to the National Real Estate Investor website, the outlook for real estate investments in 2011 is optimistic. “An improving economy combined with a thaw in the capital markets and limited new supply led to a big spike in investor confidence in the fourth quarter” .

Commercial Real estate investment, like investments in commodities such as gold, oil and wheat, has traditionally offered and been regarded as one of the best hedges against inflation. Which is why real estate has traditionally been included in institutional portfolios. When you combine the hedge against inflation, with a favorable risk and return profile, real estate remains an excellent investment.

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