Brian Linnekens - Timing is everything - Gi7 - .wmv

bjbjLULU (GI-7) Timing is Everything Hello, my name is Brian Linnekens and I am the president of Global Innovation Development. ve all heard the saying timing is everything well, this is particularly true in real estate. Just like most other capital intensive endeavors, real estate development projects are extremely sensitive to changes in interest rates. Income producing properties like apartments, retail shopping centers, industrial centers and offices provide insufficient cash flow to be financed when interest rates climb above certain levels. And for sale projects (like single family home divisions, condo projects, or incubator office buildings) are doubly impacted by high interest rates because of the high cost of construction financing, and also the reduction in buying demand for the product as buyers wait for interest rates to drop before entering the buying market. As such, selecting the right time to enter the market is crucial. Many new developers just charge ahead, regardless of the overall economic climate a decision which later can haughty them, and their entire career. On the other hand, waiting too long into a positive cycle to begin a development can also be very dangerous. Developments usually have substantial lead time, and towards the end of a positive cycle the project becomes subject to increased risks of competition for tenant and buyers. Also, towards the end of a positive cycle, construction costs are usually at their highest as demand for materials is high and contractors have many projects to chose from. So, the real trick is to launch your project right near the beginning of a positive cycle. But, this requires a developer to perceive new market opportunities before others do which is really where all the magic lies. So how does a successful developer do this? Well, there are a variety of indicators one can use to spot a positive economic trend. These can be things like unemployment rates, new housing starts, and business failure rates. Realistically though, local indicators are arguably even more important so a good developer will gather information from local brokers and bankers regarding what type of properties have a lack of current supply, and typically rent or sell quickly when available. Timing your developments to the cycles of the market is certainly not easy, but if you are careful in your information gathering and market analysis you can position your project for the highest chance of success. Good luck and have a great day. gdKr On+r Brian Linnekens Normal Brian Linnekens Microsoft Office Word Title Microsoft Office Word Document MSWordDoc Word.Document.8