Commercial Real Estate
Commercial Real Estate Investing is not the path to easy riches, but it does provide a path to wealth creation that is surprisingly available to middle and upper income Americans. This path is both available and largely unused. Successful Commercial Real Estate Investing is hard work, but it rewards those who are willing to do the work.
Many elderly have had a comfortable retirement because of successful real estate investments, many students have gone to college funded by successful Commercial Real Estate Investments, and many boats and vacation homes have been financed by Commercial Real Estate Investments. Such accomplishments cannot be taken for granted.
Successful Commercial Real Estate Investors must have the skill, knowledge, and energy to find appropriate properties, evaluate them as investments, arrange for financing, and either manage these properties, evaluate them as investments, arrange for financing, and either manage these properties or find a buyer for them.
An investor with a more long term view can analyze the primary trends and identify the supports (lowest prices) and ceilings (highest prices) historically recorded and plan the investments accordingly. An investor needs to be patient and needs to be able to afford a lock down period while using these trends to plan the investment strategy.
One can also follow the secondary trends, but it is required that the investor is more in touch with the market happenings. The secondary are not as long-lived as the primary trends. So good returns can be obtained in a fairly short period of time, provided the investor's entry and exit timings are right. The tertiary or minor trends require highest level of involvement and a very "hands on" approach.
They are difficult to predict and should be followed only by trained and experienced investors who can catch the pulse of the market. The basic problem with technical analysis is that the investors can see the trend only after the event has occurred in the past and is an established fact. Recognizing trends as they emerge can be a bit difficult.
It is very important to study the macroeconomic and industry analysis with respect to these companies to see how external factors have affected them. If the investor is risk-averse then companies are being fairly less impacted by the policy changes.
If the investor plans to be more involved in following the market trends and be proactive in investments then he should go for companies with high intraday trading patterns and high volatility. This will enable him to make quick profits. Companies with dubious records and imperfect information should be avoided at any costs though.
Moving to the next analysis to select the companies to invest in, the investor can benefit greatly from undertaking a "Fundamental Analysis" of the companies. An investor having a long term view of his investments should go for companies that are undervalued on the stock exchanges.
The purpose of the Fundamental Analysis is to identify companies and stocks that are wrongly priced relative to their 'true value'. The true value of the stocks can be easily obtained from published and available financial data of the companies. The financial data of all public companies which are listed in the U.S. can be easily found online.
There are various valuation techniques that can be used like the Dividend Discount Models, Price Earnings Ratio Technique and the likes to find out the true value. The detailed techniques are beyond the scope of this article and can be found on tutorials online. A little study will help you know the best ways to invest money.
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