January 2012

There are 3 blog entries for January 2012.

Putting Your Focus on the Cap Rate is Not the Answer

Thursday, January 26th, 2012 at 5:54pm. 452 Views, 1 Comments.

Cap rate, cap rate, cap rate. There is so much focus on cap rates that investors are missing solid opportunities for no other reason than that they aren't familiar with Austin. Let's just put it in plain and simple language. If you are looking for a high cap rate, you are NOT going to be satisfied with the location of the property or the tenant base. Write that down on a sticky note and put it somewhere so that you have to keep reading it.

A mediocre market is a stagnant market with low appreciation. Demand drives appreciation. Stagnant markets have no demand. There is no real reason for the rents to increase except to meet the cost of operation or to adjust…

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Minimizing Investment Risks when Evaluating a Potential Property

Thursday, January 19th, 2012 at 4:07pm. 388 Views, 2 Comments.

Last week we discussed handling your own apprehensions in risk management by seeking the help of a knowledgeable real estate investment professional, and essentially serving an apprenticeship. It's an invaluable model to both learn a new "trade," and to have a wise counselor at the same time. No investment pro worth his salt will tell you he can make risk go away, but he will show you viable techniques to minimize risk.

I like to tell new investors that all investment is a process. If you work the process, you're immediately hedging your risks. This starts with doing your own math. Check out the numbers you're being given. When people start claiming really high rates of return, which…

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Risk Management Step One: Control the Fear

Thursday, January 5th, 2012 at 9:53am. 549 Views, 0 Comments.

"Real estate investing is risky." Don't you love it when someone says something that obvious? Of course, what is considerably less obvious is how you manage that, both in terms of the practical business and financial considerations, and your own psychological tolerance for the process. Truthfully? The best way to get "used" to the risk is with help.

Apprenticeship used to be a standard model for learning a new trade. You want to learn to be a silversmith? You go find a silversmith. You want to learn how to invest in real estate and not get eaten alive on your first deal? You go find yourself a seasoned realtor who specializes in investment properties. Not all agents are the same, and…

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