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Investing in areas hit hard by the global financial crisis.

Discussion in 'BlackHat Lounge' started by Roparadise, May 1, 2012.

  1. Roparadise

    Roparadise BANNED BANNED

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    This weekend I was in a town hit hard by the global crisis, nearly all the buildings in the town's main street were either for lease or for sale. One building for lease/rent/buy/trade had a 3 bedroom apartment up top and I think about 1200 square foot store in the bottom. The guy wanted $5,000 down and $550 per month for the lease. I forget what he had listed for the sale price.

    There is a small college of about 1,100 students nearby which offers about 30 majors including
    I was thinking that it would be a good investment to lease it,and use it to have a office for a company in an industry that can get international customers,and hire students from the university as interns so you can get them at a cheap rate. And use the apartment section to either live in or stay when you are in the town instead of going to a hotel.

    I haven't done enough research on internet prices and electricity prices,but i did find the closest International Airport is 104 miles away.

    Do you guys think this is a good investment strategy for areas that have been hit hard by the global financial crisis?
     
    Last edited: May 1, 2012
  2. creep

    creep Registered Member

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    My opinion is that you are thinking out of the box and that is good.

    But I personally see the following issues:

    -Since the town has been hit hard by the crisis then why do you expect an investor there? If there was support from local autorities, infrastucture and the workforce would have all the abilities needed then the town should have been booming by now.
    - How are you going to sustain the rent until you get some investor interested?
    - What is the yield of the investment? What is the anticipated break even date?
    - Why is he asking for $5000 upfront? Does he know something? Did he had a bad experience with previous investors, leaving after 1 month and he wants to get a big check upfront?
    - What was the trend of the students movement? Do they want to remain in town after they graduate or do they want to move to a bigger town that offers more posibilities. If so then the blood of your business is going to drain out..

    I have other points to consider but first think about the above..
     
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  3. Roparadise

    Roparadise BANNED BANNED

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    There's alot of research before I would invest in such an area, I also would need to know the state and local tax rates as well as local laws etc.