Historically, real estate was considered a long-term investment that provided investors with cash flow, tax benefits and significant appreciation. However, in recent years, investors have abandoned many of the fundamental valuation and analytical tools that were traditionally associated with real estate investment and have been content to just “own the bricks”, in the hope that prices will continue to increase. In our view, when the fundamentals of real estate investing are compromised, what was a sensible investment opportunity becomes a risky gamble.

The current state of our financial institutions has had a negative effect on the real estate industry. Simply put, banks are not lending, and if they are, the terms available have adversely changed, affecting both the economics, as well as the risk reward ratios of the investment. Foreclosures are rampart with values of property across the country plummeting. Furthermore, even though economic indicators have shown a general decline in interest rates, interest rates on mortgages for investment property have increased. Higher interest rates together with higher cash down payments required by financial institutions should soon result in even lower prices for property. Cap rates for properties have increased considerably over the past 12 months and we believe this trend is going to continue into the near future.

The effect of these factors can be summed up in one word…Opportunity!!!

Contact Info

Rolling Cash Equity Group
1430 Broadway - 14th floor
New York, N.Y. 10018
Tel: 646-519-8490
Fax: 646-519-8494