New Era Of Opportunities For Private Investors

For a number of months I did not write on this blog. An important challenge for anything and particularly for blogs is to keep discussions relevant. During the past months I have looked and worked on projects that make for interesting experiences and new pots. Today, what I wrote in a blog a number of months ago is more relevant than ever, we are at a perfect time in real estate history and for private investors.

Only a few times in a person's life we are presented with the type and size of opportunities that we have today. The gold rush, the internet boom are some of these times. We are currently experiencing another one of these moments focused on real estate and finance. In 2009 a number of investors have started to take advantage of opportunities created by the perfect storm. As the storm continues, opportunities are being created for private investors to embrace. These opportunities all differ in terms of size, type, value etc… and are available to most investors.

The economic situation in which we are today came about for numerous reasons that are still debated today and was centered on two sectors of the economy the financial and real estate sectors. In 2006 the real estate sector represented approximately 25% of the US GDP while the financial sector represented over 8.5%. Combined these two sectors represented more than a third of the U.S. GDP, thus when they started to experience difficulties, all sectors of US the economy suffered. Because we are in an integrated world and because the US economy is the largest one in the world, the all world was impacted by the crisis that was started here.

To appreciate the size of the problem you can have a look at the Mortgage Lending Implode – O – meter or read the following article from the Wall Street Journal, February 11^th, 2010 edition "TARP Panel: Small Banks Are Facing Loan Woes". In this article the author outline some of the challenges of banks and points out that out of some 8,100 US banks, nearly 3,000 of them could be forced to limit or stop lending. This is addition of already 230 banks who failed in the past two years and of the approximately 250 will be failing in 2010. Banks are the conduit to providing liquidity to the economy, so from a certain perspective we are in a lot of trouble.

When systems go down they establish the foundation for rebuilding new ones, taking advantage of the rebuilding effort is creating numerous opportunities. Here since we are talking about two sectors that affect directly a third of the U.S. economy, the number and sizes of the opportunities are and are going to be quite substantial. Opportunities are and will exist in some of the following areas, any type of lending, financing, banking, real estate buying, real estate financing, buying of financial instruments secured by real estate, debt restructuring etc… As private investors focusing on real estate, today this will sound a little cliché, but the sky is the limit.