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Bailout Survival Strategies and Commercial Real Estate

Invest in or keep your commercial real estate, but adjust your lease rates to keep your tenants intact.  I’ve written a past article on how even in a declining value market, income-producing real estate protects your capital better than most other investment vehicles. 

I have a couple of videos to share with you in this post that should get you thinking about your near-term future.  First though, I want to you get a “visual” of what $1 Trillion Dollars looks like.  For those of you who are numerically inclined that number is $1,000,000,000,000.00.  Here’s the link to give you a look at how that number literally stacks up in $100 Dollar Bills:  http://www.pagetutor.com/trillion/index.html.

Now to put that into perspective with regard to our economy, take a look at this video clip of a recent Glen Beck show where he graphs the amount of U. S. Deb over the past 80 years: 

Finally, let’s get a look at Jim Cramer as he comments on recent proposals to “fix” our economy from Washington:  http://gatewaypundit.blogspot.com/2009/03/cnbcs-cramer-on-obama-its-amateur-hour.html.

To summarize all of this for the time challenged:  The US has piled on an unprecedented amount of debt in the form of paper money with NO visible stimulus effect on the economy, as measured by both Wall Street and Main Street activity.  The likely result of this in the near term future is the devaluation of the U.S. Dollar relative to other currencies and run-away hyper-inflation.  And let’s not forget the proposed irresponsible massive increases in taxes that will further reduce output.

So what can you do about it?  Here is my “short list” of thoughts that I personally will be taking some action on in the coming months:

  • Invest in or keep your commercial real estate, but adjust your lease rates to keep your tenants intact.  I’ve written a past article on how even in a declining value market, income-producing real estate protects your capital better than most other investment vehicles.  You have a real asset, income, and tax benefits all rolled into one package.
  • Buy some gold, preferably coins.  I know it sounds “doomsday,” but I’m being realistic here.  When the paper money becomes worth less, “real” money protects your value.  Don’t go cash in your life’s savings, but have a few thousand dollars worth sitting in a safe deposit box somewhere.
  • Stock up on some essential items.  Again, don’t think I’m getting “doomsday” on you.  The reality is that many goods are sitting in ports rather than being transported because banks will not issue letters of credit.  Soon local stockpiles will be exhausted and there will be some common items missing from stores.  What, I don’t know.  But if you love your Pop Tarts in the morning, you might want to get a few extra boxes … just in case.  And if I’m wrong, well heck … eat ‘em up!
  • Save.  Yes, I know that Washington has done a 180 and is telling you to spend right when the U.S. consumer FINALLY decided to save some money.  Yes, I know it will be worth less (unless you adopt #2, above), but at least you will have something.  Don’t believe that Big Brother Government will be able to sustain the bailouts.  Like the Dot Com Bust, the numbers do NOT add up.

 I’ll have more to say on these topics in the coming weeksScience Articles, so stay tuned.  We live in “interesting” times and need to be ready to grasp any opportunity that comes our way!

Source: Free Articles from ArticlesFactory.com

ABOUT THE AUTHOR


Craig S. Higdon, a veteran commercial mortgage banker. He publishes the e-zine and blog, www.InvestmentPropertyInsider.com, for commercial real estate investors, developers, and industry professionals. Visit the blog and get this free report: “The 7 Biggest Loan Mistakes Real Estate Investors Make And How To Avoid Them.



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