The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: David Jones who wrote (21860)	7/1/2004 9:35:41 AM
From: X Y Zebra	Read Replies (2) of 306849

Sure love to but I'd have to 1031 into more high priced property. I do not know the details of your particular asset and personal situation, (including net equity, risk tolerance, etc.) However... If you are interested in protecting your equity now that the market has given it to you... You could exchange into a more stable "type" of real Estate. True, if you stay on the residential single family residence type your risk exposure changes little. On the other hand you could consider something more in line of "commercial real estate" At 800K value I imagine there must be some interesting equity level to work with. This equity could be put to work in a commercial or industrial building, perhaps even a different geographical location (somewhere you would not mind travelling to and possibly of lesser general values). The main element would be to switch to the above referenced "commercial" type real estate. Industrial buildings are far more stable in their valuations and they are far more reliable and capable of ditributing risk amongst more tenants. (example a 3 or 4 unit building). In general, these buildings are valued based on capitalization rates used based on NET income (after expenses) and in most cases the income is based on triple net (nnn) leases. (meaning, the lessee pays all your operational expenses in the building on a pro-rata basis). Yes, you need more knowledge in commercial real estate than your regular second home investment. I have no idea of your knowledge or interest in learning (or lack thereof) of commercial real estate. The point here is that now that the market created some equity for you, there are ways to diversify and protect such equity rather than just leave it exposed to the gyrations of the residential market. [and waiting, in wailing & complaining mode for the "next" market crash] Much depends on your desire to participate more actively in the business of commercial real estate where you have a little more control over the destiny of your equity, rather than being another dinghy boat at the mercy of the waves of the sometimes wild (and highly emotional) residential market... if interested... you could learn more here.... ccim.com ccim.com ccim.com

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