Monday, May 19, 2008

Large Florida Deal Indicative of Investment Opportunities Large And Small

Who says the market is down and no one wants commercial properties?

People who don't know what they're talking about, that's who!

In southwest Florida (a place I love), where homebuilders have pulled up stakes or are navigating some pretty rough financial seas, there is trouble. But one person's -- or business' -- misfortune is another organization's opportunity.

WCI Communities Inc., based in Bonita Springs, Fla., has agreed to sell its high-end, Italian-inspired Tuscany Reserve community in a multimillion-dollar deal. After several other deals fell through, says the Naples Daily News, WCI closed on a sale Thursday to a group of European and Middle Eastern investors.

The sale price was not disclosed. Observers pegged it at about $65 million.

The market will come back and the investor group will be poised to make a killing in a decade. So I'm sure you're saying, "oh right, we're talking a giant project, what does that have to do with me?" The reality is, if you have any kind of strength financially, NOW is the time to pounce and pick up property. And not just the first project you run into. Investors have a wide variety of choices. If one doesn't pan out, or the numbers don't work, move on to the next one. Something WILL work.

Unlike residential real estate, where people are emotionally attached to the home or structure they purchase, commercial/investment real estate is all about the numbers. The math either works, or it doesn't. There are residential opportunities for investors, as well. To hold, not to flip. I have already covered that issue far more than I should, so I'll stop there. But good homes can be purchased at good values (not just fair values, but with good deals). Hold them for investment, rent them out for income, take advantage of the many tax opportunities, and you have a winning combination.

So while the WCI transaction is larger than a lot of people could ever dream of dealing with, it is indicative that transactions are happening, and for investors -- large and small -- there is a ton of opportunity.

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