I believe in real estate.
The current marketplace has made assets available at below-market values for a variety of factors, such as tenant vacancies, owner distress, a financial imbalance in the the property’s value, an unfavorable loan structure, a lack of owner capital reserves, credit restrictions, and a variety of other factors.
Notwithstanding the availability of distressed real estate, it is difficult as an individual, or a small investor to acquire investments on a scale that would allow one to execute, on favorable terms, an investment strategy that will maximize the return on these investments.
Therefore, I am currently advising clients operating in hotbed segments of the commercial and residential real estate markets to complete a private offering that pools investor funds together in an investment entity dedicated to purchase, manage and then sell undervalued or distressed assets when the asset values improve, or to rehabilitate and re-position such assets for year-on-year cash flow. When structured effectively, and managed competently this can be a very lucrative investment strategy.
The pooling of interests is effective because the purchase of distressed assets is time consuming, very risky and capital intensive, and requires industry knowledge to identify, evaluate, secure, close-on, rehabilitate, and then manage, operate, and market these properties. A pooling of interests, whether it be industry expertise and/or financial resources to create the structure, identify, acquire and then manage the assets will be necessary to secure the equity needed to obtain financing on adequate terms. This strategy also creates a well conceptualized business plan, and it shares the risks.