Business cycles, we read about them all the time and many times we never slow down to think about how the national economic cycle affects our own local small business. That is until we are knee deep in debt and wondering how we’ll dig our way out.
As real estate investors we have a unique opportunity if we can recognize the cycles and use them to our advantage. For instance, when credit became fast and loose and anyone that could fog a mirror could get a loan, savvy investors recognized early on that using a flip strategy for residential real estate was a great business.
However, now that the cycle has changed and credit is tight, using a flip strategy is not such a good idea. So the question is how does one create a cash flow monster so that they don’t have to go back to the 9 to 5 grind?
The answer is simple. Recognize the cycle we are in and adjust accordingly. Because of the nature of commercial real estate and the way loans are made on commercial property, the small commercial real estate market has made real gains in the past year.
While residential business has been squeezed by a lack of available credit the small commercial market has plodded along. That’s because each small commercial property is looked at as its own business entity. It has to make a profit or lenders will not loan money against it.
As an investor with equity in properties or with stocks and mutual funds, you can create situations where you leverage your wealth to get into the high cash flow properties that can give you a paycheck and keep you from having to schlep back to a J-O-B!
If you don’t think you have the money to get into commercial real estate you may be wrong. By leveraging loans against existing equity in property or by securing loans with stocks, bonds and/or mutual funds, you may be able to obtain all the money you need without having sell your assets.
With 100% CLTV programs and partnering strategies, you may be closer to colossal cash flows than you think!
Michael Gross is the President of Dividend America Mortgage and has been in real estate for over 20 years. He has been a builder, a Realtor, an appraiser, and currently he is a lender and an active real estate investor. He uses all of his experience and knowledge to show individuals how to properly use a mortgage as a tool to help create greater wealth through real estate investing. For more information on residential and small commercial loans please contact Mr. Gross on his direct line at 770-350-7373 or via email at
mgross@dividendamerica.com
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