Three Indicators That Signal When to Invest in Commercial Real Estate

There are over $800 million in commercial loan renewals in the US coming due in the next three years. In Northern California, arguably one of the most desirable and inelastic markets in the United States, the value of commercial real estate has dropped between 25-50%. Many investors are sitting on the sidelines waiting to invest their money; they just don’t know when the right time is. Understandably investors want to buy properties at the bottom of the market. During downward cycles, one like we are currently in, investors are waiting until they believe the prices of real estate won’t go lower. Obviously, the problem is no one knows.

There are three indicators that potential investors should be aware of that signal when to invest in real estate. The first is interest rates start to increase. The US Fed has eliminated the cost of funds for banks to borrow from the Fed; this in turn is supposed to positively encourage lending while keeping interest rates for the average borrower to a minimum. This is working, but once the economy is stimulated enough the Fed will increase interest rates to prevent inflation and then interest rates will rise. Rising interest rates indicates the economy is finally on track.

A second indicator to use to determine if the market is better to buy commercial real estate is if the foreclosure market dries up. Foreclosures and distressed assets are some of the only commercial properties in contract in today’s market. Nationally, the foreclosure market is at its highest rate since the S&L crisis in the 1980′s. Distressed assets need to be absorbed before the rest of the commercial market can thrive.

A third indicator is that properties are sold for below replacement cost. If it costs $500/SF to build building including land and you can buy an asset down the street for $200/SF, you’re buying substantially below replacement cost. This is a key indicator the market is bottoming out and is a good time to buy

Why Hiring and Managing Employees Are the Real Obstacles in Starting a Small Business

When starting a traditional or online business, you have many things to take into consideration e.g. advertising, location, finances, software, accounting, maintenance, utilities, and et cetera. One of the biggest considerations when beginning a new business is the staffing of your business with people who are reliable, honest, competent, and valuable. Unfortunately, you cannot determine who the right employee is until they are past the honeymoon phase and feel secure that they have had enough invested in them that the company will be reluctant to letting them go.

How do I choose the right employee?

First, do not be desperate. This is hard not to do when you have shifts to cover, orders to fill, et cetera, but you must be prepared to do a careful search. Count on spending at least four hours per serious candidate, reviewing applications and resumes, conducting interviews, giving aptitude and psychological testing, checking personal and business references, and, if necessary for the position, conducting background checks. Try to find at least five qualified candidates for each position to be filled. If they are qualified enough to make your cut, then they will be valuable, so you need to be prepared to negotiate salary, hours, and benefits. You also need to be prepared for the fact that often your top choices for a position have been interviewing with other companies for other positions, so there will be competition for top employees.

What is the likelihood of their staying with you?

Another thing you must be prepared for is the eventuality that many employees quit during or shortly after the training phase. There is a significant cost of training new recruits for a new position. This must be incorporated into your budget. The best way to keep an employee is by paying them enough money, giving them enough benefits, and creating a pleasant work environment for them. It hardly seems fair that it is your business, your dream, your blood, sweat, and tears, but you are the one that has to cater to the staff. You also have to realize that the employees get paid first, whether the company is turning a profit or not. Most companies take years before they become profitable enough to adequately compensate the owners. Considering most new business start ups last less than two years, this is sobering news.

The ugly truth about hiring women.

I am a woman with children, so please do not think I intend to discriminate against women. But as a business owner of an industry that is dominated by women, I have to admit that there are issues.

When interviewing a woman, ask her out of the blue, no matter what size she is, “Are you pregnant?” Be sure to be looking in her eyes when you ask this, so you can gage her reaction. Many women will get jobs when they are pregnant, swearing to stay for the long haul and quit the minute she returns after her maternity leave. Even if she doesn’t leave, the physical state of pregnancy means restricted activity, limited standing, limited sitting, a need to be gone for appointments, et cetera.

Another question to ask a woman is, “How old are your children?” Assume that she has them. She will tell you if she does not. But based on her answer, you will know if they are the age where school closing days will be an issue or if a runny nose or a slight fever will have the day care center insisting on an immediate pick up. You also will know that that woman will probably need to be available to pick her kids up every day at 5:30 or 6:00 to pick up her kids regardless of a workload that might require overtime.

Another thing you have to deal with when hiring women is something you cannot determine until you are already committed to hiring them: the ability to create drama out of anything. Women are territorial people who were designed to be nurturers of their environment. You can’t get away from that. Because that need is not easily met in the work place, women often cause dissension among the staff. Again, remember that I am a woman writing this.

Is it really worth it?

Before starting your business, think hard and ask other business owners about the hassles of hiring, training, and firing employees. Evaluate your goals in starting a business, and then decide whether you should move forward. You might find that it would be more practical to meet financial goals through non-traditional businesses and meet personal goals with the wealth that venture could generate.

Start Building Your Own Solar Panel System Today For a Minimal Investment – Don’t Delay Anymore!

Beyond the shadow of doubt, solar energy has a lot of benefits. For instance, today many companies and big industries that depend on oil are getting worried because oil wells are drying up. In a few years, there will be no oil in the wells. As for solar energy, you will never have to worry of it being depleted. It will always be there, as sunlight is a very consistent source of energy. Pickup a “building a solar panel today” guide and get on track to stop paying your electricity bill every month!

Fossil fuels emit harmful chemicals, which are referred to as green house gases into the atmosphere. These gases have led to global warming which is a crisis if not dealt with immediately can be disastrous. As for solar energy, no emissions are released into the environment. Therefore solar energy is environmental friendly. It helps in protecting the environment making the air we breathe fresh. In the long run, solar energy is cheaper than buying it from power companies. The start up fee can be a bit expensive, but building a solar panel is like a long term investment. You will reap the fruits of the investment for a very long time. If you are building a solar panel that is big enough, you can sell the excess electricity to power companies. It’s like you are now in a business of selling excess power to the electricity company, which could not be the case if you had not get involved in building a solar panel in the first place.

Most governments will give tax credits or some incentive for people purchasing solar systems or considering the idea of building a solar panel. This is meant to encourage people to adopt environment friendly source of energy and help reduce green house emissions.

Solar energy is not affected by forces of demand and supply as it is the case with fossil fuels. Actually, no matter how large the demand is, the supply will be more than enough– enough for the richest man, and enough for the poorest man.

Another benefit of solar energy is that it reduces our dependence on oil producing countries. For instance many investors from the west depend on the oil in Middle East. A country like China, which is an upcoming world superpower, has a lot of industries and as a result they can’t do without oil which produces the energy required to run the industries. It over relies on oil for its industries. Of all energy sources, solar energy and wind energy are ranked the best because they are renewable, consistent and environmental friendly.