"A Decade of Hurt" is how one Commercial Lender described the current economic forecast. Most other prognosticators see continued double-digit unemployment for the forseeable future and beyond as the economic fundamentals still seem to be lacking despite the run up in the stock market. That saiod, it goes without saying that any investment or business going forward has to run "lean and mean". Cost containment is an absolute must as there is little margin for error and aggressive management of assets is also a necessity.
Like any investment, you still need to do a 3-year/5-year or 10-year exit strategy analysis using practical and probably conservative guestimates in order to establish a buying criteria. Since there are so few sale comprables, it is imperative to define what an acceptable rate of return on an investment should be and then underwrite opportunities with a conservative slant on income and allow some flexibility in expenses. Don't be surprised if this formula doesn't produce a lot of results as the core gap between Buyer expectations and Seller valuations continues to widen.
Apr 19, 2010