The most profound reason to invest is to have your money and/or talents work as hard or harder for you than you did to acquire it. One of the many Ben Franklin quotes is, “The most powerful financial tool in the universe is compound interest”. In other words the money your money earns is also earning for you. A pile of cash is just a pile of cash that will be added to or reduced by your fiscal behavior. When your money is earning more – that is cash flow.
Over the past 3 plus decades Ken Otterman has utilized real estate partnerships in many fashions for many projects. The, “Why use partnerships” question sometimes seems to be a “why” that comes up in conversation. The simple answer is that in any business to be successful you need to maintain three attributes; you must perceive opportunity (find the good ones), manage the investment (plan your work and work your plan) and overcome liquidity (avoid being underfunded). Perceiving opportunity helps us set the stage for a profit and not buy what we cannot sell. Managing the investment requires us to have a workable plan and a direction toward a profit. No one wants to be the guy with the best mousetrap in the world and not understand marketing. Overcoming liquidity is always a challenge for business in many ways. Even the company with a huge reserve can have that reserve reduced significantly by purchasing another business. The growth and function of stock markets is assisting companies overcome liquidity.
Why Real Estate?
Real estate has been chosen because it is universally understood. To understand the influences of value on publically traded businesses involves specific knowledge and timing. Real estate investing is generally more forgiving. When investors begin they are typically looking to the most forgiving profitable medium and real estate generally fulfills this desire.
Why a Partnership?
Partnerships are a method of overcoming liquidity mentioned above. Many people have investment capital and no time or capacity to purchase a quality property alone. When the investor has a desire to team up and leverage their money and talents there can be a synergy created that neither of them could have produced on their own. Partnerships are simply a way for like-minded people to enhance their capacities.
Why now?
The market will always drive price, supply and demand create the boundaries. Property values have remained in check for many years. We cannot predict when and if changes will occur but we do know that a strong client base is necessary in our industry. The customer base at this property is diverse and the demand in the area has created positive cash flow for more than 20 years. The interest rate is very favorable and the debt to value ratio will be a conservative 70%. Looking to the present and future the cash flow, debt and reserves are conservative. And to quote Warren Buffet, “Never invest in a business you cannot understand.”
We have searched for properties for years because of their simplicity and this proves to be one of the strongest returns we have offered.
Why us?
There are vast reasons for choosing to align with us. Many wish to join forces with people with a proven track record for ability and commitment to getting the job done. Our leaders have knowledge and passion and commitment to the projects they develop. The Leadership of the Team that we have assembled combines the talents of successful business owners, real estate professionals, cash flow managers, and Investors.