True or Fraud? I'll let you be the judge...read on please !

Hello my dear readers and I want to start this post by simply apologizing for misleading you on purpose- 

You might’ve typed any word searching for something in particular that you thought you were going to read here and instead I want you to read and find out about something that I think it is very important. You might already heard about it or about this man rather; the name is BURZYNSKI...... Dr. Stanislaw Burzynski !!

The Burzynski Clinic in Houston, TX

Last night I saw the documentary by the same name which tells the story about this Biochemist and Physician born in Poland who had this “crazy” idea of finding the cure for cancer which got him into a lot of trouble with the American Cancer Society and the FDA  ultimately risking  a prison sentence and a hefty fine. The amazing thing narrated in this documentary is that his clinical trials started back in 1976, and according to what is portrayed in the film, as soon as he started obtaining positive results such as actually CURING CANCER he got bombarded with questionings, congressional hearings, subpoena of all his records and files, all kinds of obstacles were posed for him not to continue his research and studies-

Anyways, I will not bore you with the details, I want to one more time apologize for having misled you to my blog page but I truly felt compelled to help spread the word about this documentary, wether you agree or not ..... you will be the judge! 

So.... You want to open a Restaurant....! (PART I)

Are you sure!!!? 

                                                                                       Photo Courtesy of Pari Dukovic

That is my first question to any prospective buyer that comes to me looking for restaurant space, followed immediately by my next one question without even letting them answer the first: Have you ever been in the Restaurant business? Do you know anything about it? Have you had restaurants in the past?  That’s rather 3 or 4 questions but they are all necessary; what happens is that I have encountered many people in the past that have come to me because of my experience and track record in both the real estate field and the restaurant business and I have found many times a common denominator, and that is lack of experience or lack of knowledge together with a strong desire for being in the spotlight; after all owning a restaurant looks very glamorous, elegant, gives you the illusion of belonging to the jet-set, of being part of a high class/VIP crowd, it’s a self esteem booster; all these ingredients together are a strong cocktail which will lead an investor to financial disaster- SO....!! Do you really want to open a Restaurant and do you really know what you’re doing? If so I will be happy to help you find the right spot or even build one from scratch...

                                                                               Apotheke in NYC - Photo Courtesy of Noah Kalina

...but if you have not been in the business, and regardless of all the warnings you are so hard headed that still want to venture in dangerous waters, then there are a few things you need to know which I will be discussing in the following PARTS of this short series. I am dividing it in “PARTS” because there are many topics that need to be discussed and if for you this is something new, and still want to do it, then it is better going slow so the digestion of information will be more effective. 

I will be discussing on PART II and PART III of this post things such as permitting, construction, design and concept, on PART IV we’ll be getting into leasing and landlord issues which are a key factor needed to be taken care of BEFORE getting into a commitment and on PART V we will be discussing what I have been seeing a lot lately and that is foreigners with experience in restaurants....in their country. 

Cheers!

Great Music Never Dies

In between posts I will be “posting” stuff to relax, to chill.... as I mentioned when I wrote my very first one, I will be writing about things that make ME feel good and I hope that they will make their way thru you somehow- Life is not only about money and work and business, although I pursue happiness in a lot of ways, and one of them is actually attempting to make an insane amount of MONEY, I truly believe that happiness is achieved by following and pursuing what makes you feel complete, what makes you realize that this journey is temporary and we better make the best out of it because we actually don’t know shit of what’s coming next in the so called “afterlife”.

This evening I had the luxury of watching and excellent documentary about the band U2 and the making of their album “The Joshua Tree”; released in 1987 and Grammy award winning work from the Irish band. 

The film goes about the members of the band speaking together with the manager (Paul McGuinness) and the producers of the album,  in the studio, with the original recording tracks of it and just going over the state of mind, the political environment at the time, the protest, the sorrow, the anguish, the laughs and cries of a time that didn’t know better..... 

Catch it if you have a chance, it is only shy of one hour long and it is all worth watching it. 

I’ve never been a big fan of U2, I have to admit it, I love their music but I come from a different school of Rock’n’Roll, nevertheless I have to say that they are certainly a pivotal band in Rock Music’s history; they explored sounds, they were innovative and way ahead of their time wether in writing or in the studio, sort of like one of my favorite bands of all times, which Bono actually quotes during a segment of the clip when he states that the thundering drum beat and the guitar of “Where the streets have no name” kinda resembled Bonham and Page.... 

Don’t miss it and since you’re there browsing, try to also find “It Might Get Loud”, if you like true Rock’n’Roll you will love both films !

Cheers !!!

In Times of Turmoil....(PART IV)

                                          AWESOME PHOTO COURTESY OF Timothy A. Clary/AFP/Getty Images

Welcome back to PART IV of this series of posts dedicated to investing during uncertain times, and as I promised on PART III, I will discuss a little bit about what I think is a safe investment in Real Estate, examining the positive and also the very few negative aspects of them. 

As I mentioned, nowadays I really like NNN investments such as Walgreens, CVS, Dollar General, any Telecom/Cell Phone company.... you get the idea, strong and stable tenants. What I like abut them first of all is that their NNN status allows a worry free ownership, the tenant is responsible for all the expenses such as property taxes, property hazard insurance, general maintenance of roof and structure and also cleaning , landscaping, exterior paint, parking lot.....EVERYTHING!! 

This is the perfect investment for those foreign national investors by the way,  those that simply cannot or do not want to deal with the property management aspect of the asset since they are not in the US. 
The CAP is generally lower in this type of investment and also is directly related to the area where the building is located, but the NET revenue is nevertheless good, not to mention safe, since it is considered a very conservative lower risk type of investment. 

Across the board nationwide, any of these chain drugstores generates a NOI of roughly 7.25%, (the lowest I have seen is right here in Miami-DADE County where it is very hard to get anything above 6%, but then again premium location comes with a premium price tag). 
Is location at all important for this type of investment?  Well, since the leases are corporate guaranteed, Yes and No, and let me elaborate a little on that; either company will usually sign a very long lease, I have seen 20 years initial term with 10 options of renewal for 5 years each; every lease is structured differently but more or less they have a similarity among them and that is their length, if the Tenant decides to close that location they will pay the rent for the reminder of the initial term or the term they are currently on, risky? Maybe, but if you consider the stability of these type of tenants the risk is very much mitigated. 
Aside from Real Estate I am a day trader and I have performed the due diligence of analyzing these companies from a trader stand point, and they look solid as a rock, plus remember that the Owner/Landlord is getting a check every month without any effort on his part, as I would call it “Non Energetic Income”, the other factor that may stop the average investor is the price tag on one of these which can easily run up the double digits territory (as in the $10million +range depending on the area where is located). 

Other good ones and solid as well are the AT&T’s and the Verizon Wireless’ which can bring an even higher CAP but with shorter term leases though, nevertheless the top Telecom companies are nowadays very solid.

Mobile phone traffic in the US is at an all time high and in crescendo. 
Dollar General stores are also in my list of “good” mainly because their CAP rate usually is above 8% and sometimes over 9% depending on the area. 

They are mainly located in lower income rural areas and prices generally are a little over $1million, very good for those investors with a decent amount of capital but not high enough to get into a chain drug store deal; of course the rule of thumb here is “the higher the CAP the higher the risk” like everything else in life, but once you have evaluated the status of that corporation which eventually would be your tenant, and once you have established that indeed is a corporate guaranteed lease the risk is greatly diminished and the investment therefore is a lot safer than buying a strip mall or apartment building. I will get into the GSA properties on my next final PART V of this series. For now....

Cheers!

In Times of Turmoil.... (PART III)

                                                                    Courtesy of  Mel Evans/AP

Welcome to PART III of this post in which I will cover a little about Real Estate Investments, which by the way is one of my areas of expertise and I make a steady and good living out of it. Let’s first separate an investor from a speculator by saying that our current financial crisis and real estate collapse was caused mainly by speculators with a big helping hand from our financial institutions that started offering quick and easy approvals for mortgages. We basically had for a while a rule that said “If you are able to breathe you’re approved for a mortgage”; I remember at one point in time seeing a product offered by a lender that was a 106% LTV (Loan to Value) NINA (No Income No Assets), which was totally ridiculous and suicidal...but let’s not get into it now and rather focus on what the core of this PART III is - Real Estate Investments- 

So, Speculators are those that are in for the quick buck versus Investors which are those who really analyze and study any particular opportunity, and by drawing numbers are able to make a sound decision on wether any particular investment will yield the return they are seeking or not, (perfect example of financial education versus lack of it)-

I cater mostly to investors that know what they’re doing, since I need to enjoy what I do for a living (otherwise I wouldn’t be doing it), it is crucial that they either know what they want with a solid argument about their needs and wants or that they let me guide them wisely towards what suits their needs and wants.

There is no such thing as good or bad when it comes to chose which type of real estate investment one person needs to buy, actually I think they are all good BUT, and there’s always a BUT, I have the opinion that it goes with the times. For instance, I strongly believe that at this time Shopping Centers and Strip Malls are not such a good investment because risk is too high, retailers are filing for bankruptcy left and right and the risk of having a 

50,000 Sq.Ft. plaza with no tenants is too greater of a risk; unemployment rate is still very high at 8.5%, even though it showed lower for the month of December of 2011 as shown on the January 2012 report, but remember that those numbers are affected by a lot of factors that I will not discuss in this post, nevertheless they are not accurate, bottom line is that unemployed folks do not have extra cash to buy an extra pair of sneakers therefore the footlocker store in that shopping plaza is at risk of filing for chapter 11 and eventually vacate that spot along with the ladies shoe store, the clothing and accessories boutique, the gym and the hair stylist, for now NO SHOPPING CENTERS- Another type of investment that I get asked a lot for is Multifamily apartment buildings 

Courtesy of Peter Conti & Jerry Norton

 I gotta tell you that I have mixed feelings about it, they do yield a 9% or 10% + which I like, but you have to deal with too many eggs in one single basket and any of those could brake at any given time therefore greatly diminishing that high CAP rate, so at this time I try not to sell any of those even though many people have done so which I think it obeys to the necessity of doing something quick with the cash at hand as we discussed in  PART I and II- (Poorly taken decisions obeying to a lack of financial education)- 

I can go on and on over all the types of investments out there but I am not going to do that, I rather tell you what at this point in time I really like as a safe investment and that is NNN single tenant buildings and GSA tenants-

The former are Walgreens, CVS, Fedex, AT&T , etc

and the latter are buildings where the tenant is the U.S. Government as in IRS, FBI, Social Security Administration, etc. 

On PART IV of this post I will be discussing more in depth these two and show you comparative examples to demonstrate why these are at this time the best way (aside from metal) of having your cash safely invested.

Cheers !

In Times of Turmoil.... (PART I)

                                            Picture Courtesy of: McClatchy Newspapers

In times of turmoil is when poor decisions are made, is exactly when out of desperation a person, without the right tools or knowledge ends up getting into all different kind of messy situations that are hard to get out of, and I’m talking about economic decisions, commercial moves that need to be taken and done with a cool head. That is what I’m seeing a lot in our current environment and I try to advise people about the risks involved by investing into something for them unknown or something that from my trader and commercial investment realtor point of view does not make sense; take “Stanford” for example, I have personal friends and customers that invested heavily with his firm just because they were offered a steady 15% return and we all know how it ended up. 

   Picture Courtesy of Scott Olson/Getty Images

Obviously the amount of capital and disposable cash that any given person might have available for any given investment is a determining factor directly related to the amount of courage he or she might display at the moment of making a financial decision, and I’m talking here about those people that even though they have a large amount of cash not necessarily means that they have financial education and if they get it right, out of pure sheer luck, they look good and get the admiration of others, they are then called all sort of names such as “ballsy”, “risk taker”, “financial wiz” and so on, and if they don’t get it right then they really don’t get affected much since most likely, that loss will be written off their taxes at the end of the year.

But for the majority of folks out there, that are the average “Joe” with limited supply of cash but enough to get themselves into a mess, there is not room for error, no mercy if they mess up, so getting financial education is crucial, and I am not suggesting that everyone should become a trader or read a ton of books about trading the markets, but do a little research about safe heaven investments where money can be “parked” for a while until we get to see clear skies one more time. Here in Miami, from where I am blogging and where I have lived for the past two decades, the economical climate is somehow different thanks to foreign investments pouring into our city, but the rest of the Nation is still suffering and seems that recovery is far from being achieved. I don’t want my blogs to be lengthy so I will divide this topic into several parts where I will share with you what I have learned by trading currencies, reading and studying the markets, getting coached by whom I consider the best in the business of trading commodities, my financial coach at AMR University, and of course real estate investments that I have analyzed and look safe. Hopefully many of you will benefit from my attempt and I really hope you’ll enjoy it.

Cheers!