Real Estate Investment
By Behrouz Bozorgnia
At Mobbil, We have a range of clients from doctors and attorneys to manufacturing firms and business owners, all with a common concern: the concern of spending cash immediately and not knowing the future outcome. Not knowing the exact time of receiving the rewards, nor the exact amount of return, if any.
Why should you invest in real state?
Most importantly real estate is simple to understand and can enhance the risk and return profile of an investor's portfolio. Real estate offers competitive risk-adjusted returns, with less conflict and attractive income streams. It can also enhance a portfolio, by lowering volatility through diversification. Real estate investors purchase rights to a stream of future cash flows that are expected to be generated by the real estate. The cash flows in real estate come from the following: 1-Rental income. 2-Using the property as a loan collateral. 3-Tax deductible losses from the real property interest. 4-The net profit upon the resale of the property interest. However the price that an experienced investor is willing to pay depends on the amount and timing of these anticipated cash flows. How much will be received and when?
What are our Investors most common mistakes?
Most investors, specially the newer ones make mistakes at the buying phase of the investment. Here are four most common mistakes: 1-Investors are presented with a real estate “opportunity” and think that they need to jump on it right away in order to get in on the action, without setting a particular style, location or type of investment in mind. Good investments in real estate are the ones that have been selected with a unique taste and vision, where someone who uses that space can also benefit from your vision. 2-Most investors don’t outline their expectations from the beginning, they don’t do ground level or pre-development planning before making the investment, and due to this fact they end up wasting time and money. 3-People listen to wrong people for advice, there are so many people out there who think they “know” a great deal about real estate, about development projects or dealing with permitting and agencies. These people are always some of the most willing individuals when it comes to giving advice, and they normally set wrong expectations in the investors mind. 4-Investors overpay for some items at the beginning of their investment and get anxious when they realize how much more there is to pay to finish the project. Every investor should take the time to research pricing from inception to the completion of their project and have the control over their budget before starting the investment.
Who is an active investor, and why are they our best clients?
Active investors normally make strong decisions and have faith in their vision. They are direct owners or developers and know exactly what they want and communicate their goals. They select an experienced crew, and review contracts in detail. They have two set of schedules and keep all parties liable to their timelines: 1-Pre-development (planing) schedule, and 2-Development (Construction) Schedule. They respect all parties involved and do the negotiations themselves. They prepare a budget analysis and maintain a risk log at the begging of their investment with a contingency budget set aside incase of change orders and project overruns. These investors are the best clients because they are responsive, and communicative, which allows us to succeed with supporting their programs. At Mobbil we provide construction support services for residential, commercial, and industrial projects, with the goal of bringing efficiency, time and cost savings for our projects and investors.