Melts in Your Wallet, Not in Your Hand

[Boss Lady]

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." Thomas Jefferson, Letter 1802 to Secretary of the Treasury, Albert Gallatin

You can waste time trying to figure out what is going on Wall Street or you can refer to the above quote, which foretold the outcome for our country. The outcome is inevitable.

The Republic was lost a long time ago. We have been living in the "Matrix" for so long the American people cannot see the truth when it is right in front of them.

Now is the time for all good men to come to the aid of their country.

Got bullets????

[Walter P]

Now is a great time to get into commercial income producing real estate and/or expand if you're already there.

A property worth $5 mil today that you take a $4 mil mortgage with a cap rate of 10% ($500 K) annually leased triple net, gives you a 50% rate of return before expenses, which since the leases are NNN your expenses should be your mortgate pmt and perhaps some addl improvements.

Assuming 6.25% int rate x 25 yr amort. = about $320,000 yr. That leaves you with 180 K yr. That comes out to 18% cash on cash.... Not bad, but it gets better. Inflation should raise the value (granted it's in funny money), You can also take a depreciation allowance on your tax, but check with your accountant first because it may come back and bite you when you sell. Depreciation is recaptured as income and is taxed at ordinary income rates. Appreciation is taxed as capital gains.

The above is obviously a simplification of an ideal deal, but they are out there is you look hard enough. Matter of fact if you have connections with banks/mortgage companies you may be able to buy some foreclosed commercial property for a substantially lowered price. Remember, lenders are not stupid, so if you think you will steal a property, be prepared to be disappointed. That being said, there are still some real deals out there.

The advantage of commercial investment property is that your mortgage stays the same even though inflation goes through the roof. The trick is to buy something with a lot of cushion so you can meet the vig without digging into your own pocket.

On the other hand, if Obama and company somehow gets in, take your nest egg and enjoy (buy a bigger boat?), use up all your money and let the government bail you out. Fat chance.

As stated this example can work but you need to do your homework and get help if necessary. It does work however, I have been doing it for over 40 years.

Walt

[Brian Degulis]

There you go buy a boat!!! That takes all the guess work out of it. Then you know you'll lose money. LOL

Brian

[madhatteras]

Fine point Chris. Indeed the federal reserve has done well for themselves since taking over the issuance of money (debt) for our country. Anyone recall what happened just after "greenbacks"? Or after JFK issued "kennedy dollars"? Anyone recall Kennedy's replacement's first official action as president?

Greg

[krush]

Now is a great time to get into commercial income producing real estate and/or expand if you're already there.

A property worth $5 mil today that you take a $4 mil mortgage with a cap rate of 10% ($500 K) annually leased triple net, gives you a 50% rate of return before expenses, which since the leases are NNN your expenses should be your mortgate pmt and perhaps some addl improvements.

Good luck getting somebody to lease commercial property right now. There is such a huge glut.........

[Brian Degulis]

I have some warehouses that I lease out I've owned them for 10 years or so. I had a tenant move out. I've been advertising for 5 months and have not yet had anyone look at the building. I've never waited more than a month for a new tenant. I could sell it easily enough but trying to find someone to lease it seems almost impossible right now.

Brian

[Walter P]

Of course you may have some vacant space from time to time, now happens to be a tough time, but I did say to allow some cushion. Not all areas of the country or for that matter even in some markets where there may be lots of empty warehouse space, some catagories still make out well.

I'm in the process of developing a 7 acre parcel with some office warehouse space and a self storage facility. We are in an area that has quite a bit of available retail space, but there seems to be a lack of small shop space for the less than fortune 500 crowd. Do your homework and good luck.

Walt