Commercial Property Value - How to Determine What It's Worth

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Commercial Property Value - How to Determine What It's Worth

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In residential real estate, the listing price is determined by the seller. Comparables 'comps' are analyzed for a myriad of variables including price per square foot, bedroom count, bathroom count, number of garages features (pool, central vacuum, etc), location (cul-de-sac, corner, busy street), views & more.

Adjustments are then made to the subject property to render it equal with those comps. For instance if the subject property has one fewer bedrooms and 500 fewer square feet of living space, it's price will be reduced by the value of the extra bedroom and the reduced square footage.

In commercial real estate, pricing is determined by the income the property produces. Although physical features (pool, laundry facility, etc) and location (busy street, etc) are factors, they are considered only to the extent that they enable the property to command higher rent or decrease its operating expenses in order to increase the property's cash flows or Net Operating Income (NOI). Secondarily location is considered to the extent of the potential appreciation of the land. In commercial real estate, it is these cash flows and the amount an investor is willing to pay for these cash flows that will determine the price of the property.

Put simply, if the annual cash flows from a particular property are $100,000 and an investor is willing to pay $2,000,000 for those cash flows, then the property is worth $2,000,000 to that investor. If another investor is only willing to pay $1,000,000 for those cash flows, then the property is worth $1,000,000 to that investor.

Investors will consider numerous properties in a given area to determine the standard of how much is typically paid for particular cash flows in that area. The "going rate" in area can be considered its cap rate. An exact definition and explanation of cap rate will be detailed in a subsequent article. This article will address the concept of cap rate.

In this example, the first investor only required a 5% return on investment or yield and therefore could pay as much as $2,000,000 for $100,000 in annual cash flows to obtain his/her 5% desired return. The second investor required a 10% yield and was therefore only willing to pay $1,000,000 for the same $100,000 of cash flows. Different investors require different yields which affect the price ultimately paid for the property.

This one year yield could also be described as cap rate. In commercial lingo it would be said that the second investor requires a "10 cap" and that the first investor only required a "5 cap." This is an oversimplified explanation to demonstrate the concept. The "one year yield" distinction is made as cap rate only accounts for one year yield, usually the following year from when the investor purchases the property. To determine the combined yields of multiple year returns, different measures are used and will be detailed in a subsequent article.

Commercial investors will determine their risk adjusted requirements for their investments and will base those decisions on opportunity costs. Opportunity costs are the costs associated with not investing into something else. For instance, if an investor could alternatively invest in a stock, bond, T-bill CD, or other instrument and yield 15%, why would he/she buy a property which only yields 5%? In order to attract investors the property owner would have to lower the price (increase the cap rate) to give investors a higher yield.

Notice the inverse relationship here. As prices are lowered, the yield to the investor or cap rate to the investor goes up as related to the cash flows. Conversely, as property prices are increased, the yield to the investor or cap rate on those same cash flows goes down. Cap rate only takes into account the first year of cash flows and does not account for the second year, third year, etc.

Notice I have not even mentioned appreciation. The value of commercial real estate is primarily considered based on its cash flows while investing in residential real estate is for anticipated appreciation.

In residential, there is only one way to make money. The market must go up so the investor can sell for more than the original purchase price. In commercial real estate investors are purchasing cash flows. In our example, if the second investor paid all cash, at a 10,cap which values the property at $1,000,000, that investor would be paid back 100% of the initial investment after 10 years and as of the 11th year, the investor would have $100,000 of annual cash flow from that single property. Because there is no mortgage called debt service in commercial real estate, this would be the cash flow before tax to the investor. In other words, other than income tax, this is the spendable cash to the investor on an annual basis.

Hopefully the property will have appreciated as well and the market will be favorable. But in the very worst case if no appreciation occurred whatsoever, the investor would still enjoy the $100,000 of annual cash flows. The beauty of commercial real estate is in the ability to plan. If you buy a residential property, you must sit and wait for the market to appreciate. The problem is that you never know when this appreciation will occur or how much. You can't plan. And, you're at the mercy of the market. In commercial real estate, as long as rents don't decrease substantially and vacancies don't increase, you know ahead of time how much money you will make regardless of market appreciation.

Now consider this. Let's say that the second investor decided not to pay cash and instead leveraged the property with a 10% down payment or $100,000 to purchase the $1,000,000 property. Let's also consider that the remaining $900,000 was financed at 7% for 25 years which is the typical term length in commercial financing. With a fully amortizing loan the annual payments would be $63,000. In commercial real estate, paying debt owed to the lender is called debt service. In residential, it's called paying the mortgage. From the $100,000 cash flows (NOI) from the property the debt is paid leaving $37,000 of cash flows before tax. For simplicity sake, I will not account for tax effects on income or yields.

In this example, in Year 1, the investor has earned $37,000 for a $100,000 cash outlay or a 37% cash on cash return and will do so for 25 years until the debt is paid off assuming no changes to the income. Subsequently, the investor will enjoy the entire $100,000 of annual cash flows as there will be no debt service. To calculate the combined cash flows from multiple years the investor would look at a measurement called Internal Rate of Return (IRR). For the scope of this article I will not address IRR. But remember, Cap Rate is for a single year's return and cannot account for multiple years with different cash flows each year.

Notice again, I haven't even spoken about appreciation which may or may not occur. But even if no appreciation occurs to our example property, this is still an incredible investment! Now obviously during a 25 year period these cash flows will change as rents will likely be increased and capital improvements will likely be needed (new roof, etc). But again, I'm keeping it simple for example purposes.

To summarize: In residential real estate there is only one way to make money. The strategy is to carry the property and hope that the market goes up and that the property appreciates so that the investor can sell for a higher price than was paid. Positive cash flows are typically non-existent and if present, negligible relative to the anticipated appreciation the residential investment will bring.

In commercial real estate properties are purchased for their positive cash flows AND potential appreciation. It is because of these cash flows that commercial real estate is less risky.

It is for this reason that commercial real estate is more stable and can weather the market storms that residential investments cannot and it is for this reason that the super wealthy own residential to live or vacation but invest in commercial real estate to create their massive wealth.

Take a FREE Online Course! http://www.cieinst.com

Karen Hanover is well known as a Certified Commercial Real Estate Advisor, President of the National Apartment Investors Association, Chairman of the National Commercial Real Estate Advisory Board and Senior Instructor for both the Self Storage Education Institute and the Apartments Education Institute.

As a CCIM Candidate, a highly prestigious designation, often called the "Ph.D. of commercial real estate" Karen works as a busy commercial real estate agent with Marcus & Millichap one of the nation's largest and most highly regarded commercial brokerage firms.

Sought by industry insiders for their toughest deals, Karen has helped thousands to create wealth in commercial real estate with less risk even in today's uncertain economy.

Karen founded the Commercial Investment Education Institute which provides educational instruction for investors on multiple subjects including apartments, self storage, office buildings, retail centers, mobile home parks and more. Her courses are taught in a friendly and easy to understand manner.

Article Source: http://EzineArticles.com/?expert=Karen_Hanover

The Income Method Of Property Valuation

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Source: Content for Reprint

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There are many theories involved with the modern property valuation. One of the major forms of conducting a property valuation utilises a methodology named the 'income method'. Put simply this method estimates the worth of a property along the lines of revenue potential, ergo the income that can be generated either from rental income or re-sale value. The method, although rather complicated is used extensively by investors to place a value on any property investment and to assess whether it will be profitable in the long term.

The income method of valuation relies upon certain assumptions in order to be accurate. These are the re-sale value of a property in the future and the predicted income generated from renting. To make these assumptions, existing data of similar properties is used to gain an idea of the potential worth. For instance; a three bedroom house according to recent data will return a re-sale figure more than fifty percent of the original price over a decade. In this time it will be possible to make at least four thousand pounds per annum during that decade from renting.

In order to put this valuation into perspective the income generated must be set against the original capital to assess how profitable the property will prove to be. As well as estimating the profit from the property, it must also be compared to an investment of similar capital expenditure to assess whether the property warrants investment over similar profitable schemes. An example of this would be instead of buying a letting property, it would be an option to invest in bonds as the returns would arguably be greater with less risk.

The hard part of any property valuation and especially with the use of the income method is to estimate the risk. While historical data is useful, it is in no means a far reaching solution. Predicting the ebbing and flowing of the property market is a notoriously difficult task. This is especially true in the modern climate where prices are in decline, but predicting the speed and magnitude of this decline is next to impossible.

The income valuation method however attempts to ignore the current market situation, instead relying upon the value of the property in a decade or so. By taking this future value and comparing it to the price paid now. While this will not give the buyer the price in real terms; that is what it will sell for on the open market, but instead gives a valuation of what the property is worth as an investment.

As well as the eventual re-sale value, the income from renting must also be included in the equation. As putting a property up for rent will create a constant stream of income, the value of this income must be estimated and factored in. Once again however both the estimates of the eventual sale value and rental income depend upon predicting the market; previously stated to be a task that is extremely difficult.

While this method is predominantly used by serious investors rather than home buyers it has various advantages over the 'comparable sales method'. One of these advantages is that this valuation method focuses upon the individual directly, estimating the value of a property to them, and not the market. In addition, the income method is also extremely detailed giving exact figures on what an investor can expect in terms of financial returns unlike the more widely used comparable sales method. So if you are serious about property investment, the income method of valuation could lead you to the immense profits you so hotly desire.

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About the Author: "Real estate expert Thomas Pretty looks into different ways of conducting a property valuation."

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The Income Method Of Property Valuation | Content for Reprint

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Using Owner Financing to Buy Real Estate - No Mortgage Necessary

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Using Owner Financing to Buy Real Estate - No Mortgage Necessary

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Are you trying to sell your house without the desired results? Are you trying to buy a house but having difficulty with financing? If so this is probably the article for you. Why you might ask? Whether you are a buyer or a seller, owner financing could be the answer to your problem.

The increasingly-popular trend known as owner financing is when the owner, or seller, of the home finances all or part of the purchase of their house. Instead of paying a bank or mortgage, the buyer makes regular monthly payments to the seller. To some this process may sound a little weird when it's put in those terms. How about land contract or lease purchase agreements? Those are probably familiar to most people. Land contract and lease purchase agreements are more well-known types of owner financing.

What are the benefits to the buyer? Some, such as limited to non-existent qualification requirements are obvious. The approval decision is left to the seller and not to a bank or mortgage company with strict requirements. Others such as negotiable down payment and low closing costs are added benefits. Also, financing can be adjusted to the buyer's specific needs. Interest rates may also be lower or in some cases even non-existent. In the short and the long run owner financing can save the buyer hundreds of dollars and a lot of time and hassle.

What about the seller? Owner financing typically increases the number of interested buyers. The seller's monthly income is increased from the regularly scheduled payments. In addition to those benefits, the seller will probably pay fewer taxes for the additional monthly income than what would be required for a large sale.

So why not use owner financing? There are many benefits and no foreseeable problems. The buyer and the seller both benefit greatly from owner financing.

Many real estate investors know how to buy houses with Owner Financing. If you are interested in learning about buying, selling or renting properties using these creative strategies then check out these free resources for Real Estate Investing.

Article Source: http://EzineArticles.com/?expert=Wolfgang_O
http://EzineArticles.com/?Using-Owner-Financing-to-Buy-Real-Estate---No-Mortgage-Necessary&id=2322025

Borrowers struggle with 'jumbo' mortgage loan rates

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Kerry and Rebecca Scarlott, shown in their Hingham home with their daughter, Meghan, and dog, Dory, refinanced their jumbo loan with two smaller loans. (John Tlumacki/Globe STaff)

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Source: The Boston Globe

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While plunging mortgage rates have spawned a frenzy of refinancing, borrowers with larger, so-called jumbo loans are still seeing interest rates in the 7 percent range, prompting many to abandon refinancing plans altogether or resort to creative transactions.

The high rates are particularly an issue in Greater Boston, where expensive housing forces many people into jumbo-loan territory, which is currently $465,750 and above. In 2006, more than 10 percent of borrowers in Massachusetts took out jumbo mortgages.

Borrowers with conventional mortgages - those at or below $417,000 - are getting rates as low as 5 percent, while the national average for a jumbo loan hovers around 7 percent.

There is a new, third category of mortgages between jumbo and conventional loans, created last year by Congress, called conforming jumbos, which now average about 5.6 percent, according to a provider of industry data, HSH Associates.

"I think it is crazy you can't get as good a rate," said Julia Blake, 36, who with her husband is looking to refinance the Cape they bought in Wellesley for $695,000 in 2007. "To me, a jumbo loan should be a luxury house, and in Wellesley it is not. You can't get anything less than $600,000."

Another Wellesley resident, Paul Barnhill, wants to refinance his adjustable-rate jumbo loan into a fixed-rate loan, but not at current rates.

"I would refinance in a heartbeat if I could get 5 percent," said Barnhill, 44.

Jumbo mortgage rates are higher because lenders who initiate the loans are having trouble selling them on the secondary market, where the resale of mortgages provides funds for new loans. The banks and investment groups that buy mortgages are reeling from the credit crisis and the subprime mortgage debacle, and are steering clear of any loans that smack of higher risk. The major players on the secondary market, government-sponsored Fannie Mae and Freddie Mac, do not purchase jumbo loans.

Industry groups are calling on the federal government to intervene. For example, the Federal Reserve Bank is purchasing huge amounts of mortgages and related securities, which industry officials said would result in even lower rates for conventional loans. The National Association of Realtors wants the Fed to do the same with jumbo loans.

"It's unfortunate that the jumbo interest rates are very high and the government is not being responsive to that," said Lawrence Yun, the trade group's chief economist. "It is not only hurting the Main Street, but it's a fairness issue. Why are people who are slightly over the loan limit being punished?"

Last year, Congress raised jumbo limits when it allowed Fannie Mae and Freddie Mac to buy or guarantee higher-balance loans. In Massachusetts, the limit increased to $523,750, from $417,000, with jumbo loans being above the higher amount, and conforming jumbos between the two figures. Continued...


Borrowers struggle with 'jumbo' mortgage loan rates - The Boston Globe

Is it Hard to Qualify For a Home Loan These Days?

Image by Getty Images via Daylife

By Jesse Saenz

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The fact that the US has 3.9 million homes for sale and most of them coming from foreclosures means that newer, more efficient Home Loans must be offered. The truth is, getting a home loan is easier now than before the Real Estate boom, you just need to look in the right place. In the following article I will tell you where to look for the lowest interest rates, and well as what the banks will be looking for when qualifying you.

Specifically ask for Government Loans such as FHA or VA

In order to resolve some mysticism, and shed light on this shady subject I inform my clients that they should specifically ask for Government Loans such as FHA or VA (Federal Housing Administration, Veterans Administration.) I say this because the government has poured money into these departments and are eager to create revenue by lending it out in Home Loans.

For instance, FHA offers First Time Home Buyer Programs, Loans that allow 3 or more borrowers, Little or No Money Down Programs, and offer the lowest Interest Rates in the country backed by the Federal Government. FHA is a great place to look for Financing as they are rewriting the book on Stable and Sustainable financing of Homes now and for the future. You will stay ahead of the curve by empowering yourself with knowledge of specific programs, and the constant changes that are made on Government Loans. So now that you know where to look, what will determine whether you qualify or not?

The first place to start is getting with a quality professional Loan Officer, and or Realtor that specializes in Government Loans. What they will tell you is that the banks are looking for Credit, Capacity to pay back, and Collateral such 401k, or cash on hand. I suggest using a local Loan Officer to help you establish your credit scores, procure paperwork, and calculate payments. Since most Loan officers work on commission only, they are free of charge to start, and are usually very savvy and eager professionals. (For a list of Loan Officers I work with and recommend, please contact me) These 3 C's of Financing are the most widely and acceptable terms to Finance Professionals and speaking the same language of professionals is the best way to make sure you gather all the proper facts.

So now that you know where, and what to look for, get out there and see what is for sale. I bet you will be amazed by the price, and it may even be cheaper than the rent you currently paying. Make sure you consult a professional, speak the same language, and ask for Government backed Loans.

* If you have been a victim of Loan Fraud and or Foreclosure please contact me, as I am able to modify your loan, or register you to fix your credit in a credit rehab program. In most cases you only have to wait 1 year after a Bankrupt or Foreclosure to purchase.

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For more information about Jesse Saenz and Connect Realty email jesse.saenz@comcast.net or
http://www.connectrealty.com/jessesaenz

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Article Source: http://EzineArticles.com/?expert=Jesse_Saenz
http://EzineArticles.com/?Is-it-Hard-to-Qualify-For-a-Home-Loan-These-Days?&id=2091195

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Deciding if a property is a good investment

Real Estate Investment Analysis

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Deciding if a property is a good investment

Real Estate Investment Analysis allows you to quickly avaluate and compare several potential investment properties and decide which one is for you. It will help you decide if a particular property is the right investment for you.

Using figures you can easily find you can quickly determine the financial plusses and minuses related to a partilcular piece of property.

The first step to effective Real Estate Investment Analysis is to understand the income and expenditure related to particular investment property.

INCOME: Rental income is generally the first and only income stream most investors consider for an investment property. However in addition to the rental income you gain from an investment property your situation may warrant considering the capital gains as income.

I believe it's better not to sell...

Hint: When you want cash, consider refinancing your real estate investments - see RETIRING USING YOUR GROWING PROPERTY INVESTMENT EQUITY BASE if you keep your real estate investment properties you are not selling your retirement plans. You will need to consult an accountant to find the details of how you can declare capital gains as income but the general principles are out lined in this article: MAKE THE MOVE FROM HOBBY TO PROFESSIONAL INVESTOR

EXPENSES: There are two general types of costs (EXPENSES) associated with owning an investment property: interest costs and holding costs.

Income - Rental Return

The first thing you need to understand about rental return on an investment property is that verbal estimates by real estate sales people can be very misleading. That being said the way to determine a better idea of the real potential rentl return that a property might bring is to find out what similar prperties are renting for in the same area.

How to Calculate Rate of Rental Return

Rental return is calculated as a ratio against buying price. A rule of thumb calculation for rental return that many real estate imvestors use as a quick comparison is as follows:

Gross Annual Rent / Total Purchase Price Expressed as a Percentage

For more detail on calculating rental return, see How to Calculate Rental Return On a Real Estate Investment For example if you purchased a rental property for $300,000 and were renting it out for $300 per week then your rental return would be calculated as follows:

(300 * 52) = $15,600 / $300,000 (times 100 to express as a percentage) = 5.2%

I have found that if the resulting figure is in the vicinity of 6% or over you are in good shape. In the example above the rental return is a little on the low side but not by very much, so if other factors are positive there is a good chance that you will soon be getting above 6% just because of the normal increases in the rent you can acheive for this property.

For example just say that the next year the rent goes up by 15% then you are receiving $345 per week. In which case your return would be 6%. From that point on you are in a very healthy financial position with this property.

(345 * 52) = $17,940 / $300,000 (times 100 to express as a percentage) = 6%

Expenses

In terms of analysing a real estate investment a percentage of purchase or advertised price as a factor to get a ball park figure for how much it will cost to own and run that property. The first thing to do is determine the interest cost per year by multiplying the advertised price by the interest rate you would be paying.

Then find the estimated running costs by multiplying the annual rent received by an expense factor, (you may need to ask your agent or another knowledgeable investor for what applies in your local area.

An example will make this much clearer:

Go from this page Real Estate Investment Analysis To The Parent Real Estate Investment Methods Page Or Return To Freedom Steps With Property Investing

Understanding Your Costs To Help You Calculate Profits Flipping Real Estate.

Calculate Profits Flipping Real Estate

By Heather Seitz

If you've been in the real estate investing business, or more specifically been flipping real estate, for more than a few days, you've inevitably gotten an email that reads something like this:

"Investor's Dream. This property will go QUICK." Property Address: 1234 Main Street Asking Price: $100,000 (Add or subtract zeros!) Value After Repair: $150,000 Less cost of Repairs: $15,000 Profit: $35,000 Details: Needs paint, carpet, tile, new kitchen, update bathroom, some roof damage. Tenant occupied. Need to evict!" STOP! Before you read on... Take a guess at what you think the "real" profit's going to be on this real estate investment...

If you haven't ever gotten an email or fax broadcast like this, then rest assured, you will! I'm about to probably tick off all of the late night infomercials and pitchmen out there!

Sure, I understand that when you've got 30 minutes (or 90 minutes, for that matter), that you've got to sell what's sexy... not what's real!

Now it's my turn to expose the real deal on real estate investing!

This goes for flipping real estate itself (i.e. properties) or simply flipping the contract (also known as assigning the contract).

When you're flipping real estate, you need to be able to calculate the real bottom line and if you're assigning the contract, you need to know your numbers so you don't get blacklisted from investors!

This one piece of information will keep you from getting into trouble because of any "real estate bubble"!

Purchase Costs

Here goes... Have you EVER purchased and sold a piece of real estate for FREE?

If you're not sure what the answer is... It's an emphatic NO...

You are going to have costs to buy, costs to hold and costs to sell. This holds true even if you are buying a property for all cash. (Think title fees, attorney's fees, recording fees, etc.)

If you're not getting a mortgage, your purchase costs are obviously much lower, but nonetheless, there are costs associated with any real estate transaction. Plus, more than likely, if you're relatively new, you're probably not paying all cash for property anyways. You're probably going to be using a hard money investor for your initial real estate investing financing!

For a quick calculation, you can estimate anywhere between 3% - 5% for closing costs to just acquire the property. That's 3%-5% of the purchase price.

Holding Costs

How much is it going to cost you each and every day to own this piece of real estate?

See, if you're making money in real estate, you'd better believe that there are a lot of other people that are going to expect to get paid and they get paid in the form of mortgage interest, property taxes, utilities, property insurance, etc. Each of these is an expense each and every day that you own the property.

Here's an example...A hard money loan on a bread and butter type piece of real estate might run you 15%.

Let's say you got the property for $100,000.

Every month, you are paying $1250 in interest alone.

Let's say that taxes and insurance are another $200/month and then utilities at $100.

Right there, the property is costing you $1550/month - or roughly $50/day.

See, why it's important to know your not only your holding costs on a real estate investment, but also how long it's going to be on the market before you can flip the property.

Selling Costs

Here's the third part of the real estate investing puzzle.

When you want to turn around and sell this piece of real estate, it's going to cost you yet again!

Are you going to use a real estate agent and pay a commission or 3-4-5% or even more? On $150,000, that's anywhere from $4500 to $7500 chopped of the top. Then, you can figure 1-2% in closing fees.

If you can remember this... and apply what you've just learned to each and every real estate deal that you do, you'll be safe flipping real estate in any market.

You see, if it's a hot market, you can calculate less time for holding cost. But, in a slower market, make your offer based on 6 months or 9 months of holding costs. It's really simple math! And real estate really is a numbers game...

Recommended Resources:

Finding Deals: www.motivatedsellermarketing.com Estimating Repairs: www.fixingandflipping.com Finding Contractors: www.servicemagic.com

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About the author:Heather Seitz

Heather is the co-creator of Fixing and Flipping software. It takes the guesswork out of estimating repairs.

Learn how to estimate repairs and calculate profits in seconds. Click below for your free video and mini-course: www.fixingandflipping.com

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Return From Calculate Profits Flipping To Flipping Real Estate  Or go to Freedom Steps With Property Investing

Related Pages

Freedom Steps With Property Investing Flipping Real Estate | Make Money Flipping Property | Flipping the Contract | 7 Tips for Flipping Real Estate | Calculating Costs & Profits when Flipping Real Estate | The Risks Involved in Flipping Real Estate | The Aftermath Of The Real Estate Bubble | Wholesale Real Estate Investing | The End Of The Real Estate Bubble - Is It As Bad As They Say?

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Real Estate Investing, Is it the ultimate way to invest for long term wealth

For better or for worse, I have based my long term retirement strategy on real estate. More specifically, investing in real estate. I have been doing this for about 9 or 10 years now.

You might say "Well that's OK for you, you got in when property prices were low."

My answer would be that prices always seem low when you look back and there is never a time when the prices seem cheap relative to the income and property availability at that time.

With that being said I will say that in the beginning I had to change my attitudes quite a lot in order to best take advantage of opportunities at that time. In other words I had to do a lot of stretching. For example, I live in Sydney, Australia. Back in the year 2000 when I bought my first investment property it was in Brisbane.

Now it would have been much more comfortable to wait until I could afford to pay the $300,000 price difference for roughly the same property in Sydney. But I chose to get started immediately with what I was able to do and defer purchases of investment property in Sydney until the equity I had in my portfolio supported Sydney's more expensive prices.

The point I am trying to make here is that by starting straight away and investing in a well located property in Brisbane, I was able to take advantage of the capital growth of my first property to buy a second and third in Brisbane before I would have been able to purchase my first in Sydney.

Real Estate Values Double Every 7 to 10 Years

You may have heard this before and thought "That might be right, but I'll just wait until prices go down."

The big news is that the best time to buy investment real estate is right now!

Even with the "economic crisis" that we have been thrust into, what is happening? The real estate prices are falling somewhat here in Australia, this is producing great buying opportunities.

My outlook is that in another 2 to 3 years this crisis will be behind us and then 7 to 10 years after that property will have doubled again.

The question is what is your mindset? Do you feel like all your plans for the future have been suddenly made redundant because of outside factors? You can seize the initiative back by setting in place some plans for your future now. Sit down, take a calm look at your current situation and assess where you are and where you would like to be in 5 to 10 years time.

Nine years ago when we bought our very first property after thinking about it for over a year, I never would have believed that today I would be holding a property portfolio worth several million dollars.

In a future post I'll go further into the strategies and philosophical shift that allowed me to do this. It's exciting to sieze the initiative back from thise who will take it away if you let them. The journey has been an exciting one for me and my wife.