Top 5 keys to our strategy in Commercial Real Estate Investi

[monkeyboy]

Our strategy is buying undervalued or underperforming properties at discounted price, turning around the operations and building wealth through cash flow from operations and capital appreciation. It is a balanced approach, we don’t buy properties for speculations, but we also don’t buy properties at market price to aim for an ordinary return on investment. Instead we look for certain properties that sell at discount and provide both cash flow and capital appreciation opportunities.

So what are the keys to our property acquisition and what characters are we looking for in the properties we want to buy?

First Location, Location, Location – We are looking for properties located at B+ to C+ areas, we may expand our portfolio to include A- areas in the future. Why not A/A+ areas? Traditionally the properties in these areas provide 5-6% return on investment, there is no doubt there are trophy assets in these areas, but market seldom provides discount to these properties, instead it usually demands a premium. Does it never provide discount? Well, it rarely does. After September 11, 2001, New York uptown office space provided an excellent investment opportunity, it was a “fire sale”, these opportunities are once in our life time and we cannot wait for years just for these opportunities, we have to expand our investment horizon. As for C/C- areas it simply does not worth the risk.

Second Market, Market, Market – We are looking for properties in markets that experience economic growth, population inflow, steady income growth and pro-business. We avoid the areas that are saturated due to population outflow, permanent economic downturn and bad public administration and management.

Third Undervalue, Undervalue, Undervalue – We are looking for properties that are under value or underperforming so that they are selling at discounted price. There are reasons for being undervalue, our preferred reasons are (1) the property is over leveraged; net income from operations can hardly pay for the debt service (2) bad property management. We avoid (1) the area is saturating due to permanent demographic changes (2) the property and area are infested by illegal drugs.

Forth Operations, Operations, Operations – Acquiring undervalue or underperforming properties is very first step in successful wealth building. Without superb execution ability from management to turn around and bring underperforming properties to market performance, the money spent to acquire the properties will be wasted. There can never be over emphasis on management and operations.

Fifth Price, Price, Price – No one can save us if we over pay for an investment property. It is especially dangerous if we over pay with leverage. If we do that, we are inviting a catastrophic failure.

We follow value-investing strategy and aim to achieve superior, long-term, risk-adjusted returns.

[jy101]

DDDD!!!!!

[jeepster]

[njrookie]

OK. Got it. In summary our strategy is to exploit JY to the bone ...

[monkeyboy]

JY for sure, Huahua is on the same boat.

Eventually we will acquire properties in Texas. Yiqun and I will share JY's pain.

We are looking for other qualified "victims" too.

[小心翼翼的小地主]

这里说的commercial properties 包括apartment complex吧？

[jeepster]

[千里66]

顶顶顶！！！