We've all heard the real estate axiom: location, location, location. In the real estate investing biz it's really situation, situation, situation. Situation is the combination of:- the right timing
- the right location
- the right capabilities
There's an example in every town: a decent commercial building on a busy street corner with easy access and good parking. It's a decent building but it's usually vacant. If a new business moves in, it's gone within a year. Down the street from my last house was a property that held several businesses, including a specialty bakery. The bakery didn't last because it wasn't an upscale location. Next, a neighborhood diner moved in. It's doing great business because the owner had the resources to rehab the building and run a restaurant - and he chose an appropriate location. That's the right situation.
In multifamily investing, situation is the combination of: the right location: Are you investing in
the path of progress
or
declining neighborhoods?the right timing: Are you investing in markets in:
recovery & expansion
or
contraction & recessionthe right capabilities: Do you have:
strong skills & knowledge; a professional team; financial reserves
or
insufficient skills & experience; a go-it-alone plan; no financial reserves |
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