Why You Must Buy for Cash Flow–It’s Today’s Solution to Tomorow’s Wealth
Money…It seems to be all anyone cares about these days. It’s all over the news and all we’re hearing about is the implosion and consolidation of the banking industry. The big news today was of Wells Fargo’s move to purchase Wachovia for $15B. Earlier this week we heard about Chase buying Washington Mutual. The list goes on. Here’s a big hint of what this means to you. Your financing options have moved from Wall Street to Main Street. Take your local banker out to lunch and nurture that relationship. You’re going to need it.
What else does big change this mean for you? Well, it’s pretty simple. The days of buying property and believing that an exit in 2-3 years with a big return from appreciation are all but over for the time being. It’s time to return to buying property based on core fundamentals built around cash flows, solid, real, positive cash flows. If you buy for cash flow and you focus on the fundamentals, the exit will take care of itself, your deal will be financible, and you’ll get your original investment back more quickly–something everyone’s concerned about these days.
A quick look at the math will demonstrate that purchasing for cash flow works. You get your money back faster and if the market’s soft when you go to sell, big deal. You’ve got other people paying down your mortgage and you’re on the track to financial independence, using other people’s money to pay your way in the world.
We’ve got a few deal like this on the market right now. One of them is a 100% leased office/retail property built in 2005 that throws of a 10% cash on cash return the day you close on it. Email me if you’re interested in more information. It’s getting a lot of action. Here’s my address: [email protected].
About the Author:Jeremy Cyrier, CCIM is a principal with MANSARD Commercial Properties and member of the CCIM Institute faculty. He offers advisory services and brokerage expertise to commercial real estate owners and tenants. You may reach Jeremy at [email protected].