As I See It . . . Spring 2001
By Mike Glasser, President, Rogers Park Builders Group
Spring is here and if you are like me, you are counting the days until you can turn off your building’s furnace. With prices triple norm, this year’s gas bills severely impacted cash flow. For many of us it was an unexpected hit – we are recalculating our building’s operations, figuring out how and if we will cash flow this year.
Our experience this past winter reminds us that real estate investment is not for the faint or light-hearted. It was a nasty business reminder that real estate is not an armchair investment. Rather,owning real estate is a business – and one needs to be a seasoned business person in order to succeed in it.
What words of advice do Builders Group members offer real estate investors?
First, owning real estate is capital intensive. Be sure that you have the capital resources to handle rough spells – because you will have them. Owning investment real estate is tantamount to riding a roller coaster; often it requires an unexpected infusion of cash to ease the downward ride. The adage is true: it takes money to make money. Don’t over leverage – perhaps purchase that smaller property and leave some cash in the till for that unexpected hot water tank that will go down on Christmas Eve. If you have the resources to weather the storm, prepare to enjoy the exciting and potentially lucrative ride back up.
Second, stay abreast of market conditions. Even if you are not actively involved in the day-to-day operation of your property,understand the market. That is why investors greatly value membership in organizations like the Rogers Park Builders Group. At monthly meetings, our members learn what’s happening in the community, hear speakers address timely development and management issues, and benefit enormously from networking opportunities. Ask our members: Is there a better way to understand the Rogers Park real estate market than being involved in our organization? Plus, the food is pretty good.
Third, to succeed in real estate, you have to enjoy it. Often real estate investors feel isolated. We encounter problems (should we call them challenges?) and devise solutions almost single-handedly. It can be a lonely process. Going to monthly meetings is almost therapeutic. Suddenly, you realize that you are not alone in dealing with the challenges that you experience with fellow members, which opens many doors and adds immeasurably to the quality of our professional lives. If you are not enjoying your investment (i.e., you are losing money and/or community residents are besieging you with complaints), someone you know through the organization might buy your property from you, or alternatively, you might meet a qualified broker who can help you meet your goals.