Is that a good time to invest in the U.S. in Commercial Real Estate ?
001 : 10Y Interest rates have declined in the past 2 years.002 : US Real estate, in my opinion, cannot decline further more because the Price for used houses are now 20% under the Price of construction (USD 350/SF w/o land). Real Estate do not include any speculation margin.
003 : Price of houses has declined but Rental Prices remained flat : so the Return on Investment grew automatically.004 : Buying a commercial business of 2.000 SF for USD 600.000 with 5 offices and 5 lease contract with cool US entrepreneurs. Each Office is paying USD 10.000/Year. A normal price for rentals in the Miami targeted market (USD 2/SF/ Month) As a consequence : You have a 50.000/600.000 = 8.33% EBITDA 8.33% is not enough, but the idea there.
005 Problem : Many Constructions in the US are light constructions unlike in Europe (old big walls houses). Cotages and Brown-stone building are rare.006 Problem : A non-republican president in the US might have a negative tax-effect, and a negative growth rate-effect on the US economy.
007 Problem : Finding the Building with EBITDA 10 to 12%.Many thanks for your reply from your knowledge and experience in R.E.
cougloff misc.invest.financial-plan
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