Greenspan and the "R" Word

Remember this spring when the stock market tanked. In just 24 hours...

The "R" word - "Recession" came out of Alan Greenspan's mouth

* Asian markets held an overnight meltdown

* Dow Jones lost 416 points as if falling right off a cliff

* AND every other stock index worldwide tripped and fell just as hard

In the US alone over $583 Billion went POOF because one ex-government employee's single remark.

The same pundits who wring their hands at such market swings tell their investors that direct Commercial Real Estate Investing is "High Risk". That's another "R" word getting plenty of play lately - Risk. Tell that to people who rode Enron and so many other stocks down to zero.

It is a great reminder of why you have to invest a portion of your portfolio in Real Estate and NOT stocks. Let's count the ways.

*You Can Calculate Profits Before You Buy*

You can use Excel to create a proforma that will tell you almost exactly what profit to expect ... before you even buy the property.

You can research property values, expected rents and all the other variables involved and get a very good idea of the price you can sell at given the increase in cash flow you can force.

*Predictable Cash Flow Lets You Rest Easy*

Your cash flow doesn't depend in the least on what anyone says about "Recession" or "Deflation" or "Inflation" or anything else that ANYONE might say about the markets in general.

You can wrap your brain around and control all the factors that bring you that monthly check. Raise the rents and lower the expenses to force appreciation in the property in addition to the steady income stream.

*Leverage Baby Leverage*

You can buy $100 in property for $20 down and it doesn't even have to be your money.

Just imagine going in to Merrill Lynch with $2000 from one of your investor friends and ask to buy $10,000 of stock. They flat out would not know how to respond.

Yet with $200K of your investor's money, you can buy a $1M apartment complex in any State in the Country - any day of the year.

*Tax Bennies*

There is no other investment where you can get a deduction on your taxes - for year upon year - while your property continues to go up in value. Depreciation is the Real Estate Investor's secret weapon.

The mutual fund world is so perverse you can owe taxes even though the fund lost money that year. Yeah, there's a safe investment for ya.

So just remember all the benefits of Commercial Real Estate Investing as you take on the tasks of looking for the right property for your portfolio. Your patient due diligence will be well worth it.

Ignore what the Stock Market Talking Heads are Saying

Remember you depreciation, your leverage and your cash flow and put on a grin like the Cheshire Cat.

And when the stock market is going through its wild gyrations you can sleep easy and be glad you invested in real estate.