Commercial Real Estate, What Would Warren Buffett Do? As a professional you should be asking yourself this question because in two years you'll wish you had.
There is a reason why Warren Buffett is so successful. He buys when others are running scared. He sells when greed takes reason for a joy ride. And so today I ask, , while others are fearfully running from reason and the commercial real estate market should you be greedy?
Is this the time to buy a commercial building for your business? There can be just one answer to this question, an unconditional yes.
When everyone was buying in 2005 to 2007 I said, this doesn't make ANY sense to me. Today those running from buying commercial real estate, again, make no sense to me. Here is why and for your retirement plans the logic should be clear.
- Lowest interest rates in our lifetime. You can't borrow money any cheaper.
- Lowest property prices in 20+ years.
- Inflation around the corner.
- Interest rates will have to increase and when they do rental rates will increase accordingly.
- Someone, anyone with a business needing 5,000 or more square feet is the right person to buy their own office building.
Do you understand why this is the right time for a professional to buy into this depressed market? Younger professionals and business owners who intend to be in business for ten or more years are missing the greatest opportunity of their lifetime. I doubt an opportunity of this magnitude will come along again in the next twenty-five years.
Here is what is happening and why this opportunity should have your attention today. As money is injected into the economy inflation is the intended result. The government is trying to stimulate inflation to counteract or to avoid deflation. Inflation will ultimately increase the rent you pay for commercial space. But, if you own your own building then you control your rent. And while rents will increase for the other tenants in your building those rising rents will add to your bottom line, rather then reduce it. In other words, inflation works to your benefit, not against you. This is true of all businesses including medical, law, accounting, employment or any of the thousands of businesses and professions in the American economy.
So why don’t businessmen and businesswomen get this point? I have no idea except fear is clouding their thinking.
To take advantage of this opportunity, just read the five bullet points above and you should see why and what to do. If you don’t, you will never understand why Warren Buffett is so successful. And if you need my help call me because as a commercial real estate broker and lawyer I can help you to understand and to execute on this opportunity. It's not any different than what I encourage my personal injury clients to do - invest in yourself and in America.