Ignoramus8246 wrote:
On 2010-03-29, Ignoramus8246
wrote:
On 2010-03-29, John R. Carroll wrote:
Ignoramus8246 wrote:
I keep hearing that commercial real estate is in bad shape. At the
same time, valuations of stocks are up 70%
...
I would like to try to buy a small warehouse and just rent it out
forever. This would not be a purchase for a quick flip.

Like any other business, this one requires training and experience.
Spend a year talking to people Ig.

Good idea. I do not expect to find a super great deal, given my level
of expertise, just something where I would not be screwed and where I
do not overpay too much.

I'm also a little surprised, given the following:

With the Fed Funds rate at zero bonds have only one future and it
ain't pretty.

With the tremendous distress and ongoing deleveraging in the bond
market it still isn't certain what any financial services business
ir really worth these days.

With the upcoming need to refinance a HUGE notional value in
corporate high yield bonds begining in 2011, there might just be a
shortage ( and therefore interest rate run up ) of funding for debt.

That you are thinking about an investment that isn't remotely
liquid.

Um, I do not see the contradiction. I did not post a message here
saying "I would like to invest in a 30 year bond". I want to buy a
warehouse, not a long bond. I was planning to put up 50-60% in cash
and if I can find a loan at affordable fixed rates (I never take out
other kinds of loans), finance 40-50% of the purchase. If I cannot
find such a loan, I wuold just buy something smaller.

This is all assuming that normalized rents would give sufficient
return on caiptal to make this worthwhile.

If, say, I buy a warehouse, and rates go up, that may indirectly help
me in the longer run, as higher rates would force higher returns on
assets and thus higher rental rates. (though I would also anticipate
a minor reduction of economic activity).

The best time to invest, generally, has been when fear was the mani
public emotion. Investing when everyone feels optimistic and giddy,
as we know by now, does not lead to great results. I had close to
100% of my money in stocks by March of 90 for that same reason. I
was a little

I mean March 09

I didn't think you were investing in American equities from Moscov G

--
John R. Carroll