what are the top 4 reasons you'd buy a zero-cash flow investment?

In General Area - Asked by Rami B. - Feb 14, 2011
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Answer(s)

Reginald E.
Broker/Agent
Upland, CA

Number one: If the property was under valued
Number two: If the land was worth more than the improvement
Number three: If I had a buyer willing to pay 50% more that what its worth(FLIP)
Number four: If eminent domain was eminent

Feb 15, 2011
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David D.
Broker/Agent
West Trenton, NJ

To protect other investments in your portfolio.
To expand adjacent area for great development potential.
To extinguish potential “Not in my backyard” objections when development is intended.
When a promising “Hold” opportunity presents itself.

Feb 15, 2011
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Jesse W.
Owner/Investor
Lino Lakes, MN

1. Low Down Payment
2. Interest rate is fixed for life of the lease.
3. Higher IRR because of high leverage
4. Property is undervalued

Feb 21, 2011
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Joe L.
Broker/Agent
Dallas, TX

1. Tax considerations. Tax shelter is not as important as it was in the 1980's but commercial properties can still provide moderate tax shelter.
2. Exchange issues. If you're in a 1031 exchange and bumping up against your identification/closing deadlines, often purchasing a zero-cash flow property is better than paying the capital gains tax on your downleg property.
3. In Texas, mineral rights, specifically oil and gas
4. Future development, especially if you have inside information that's not generally available.

May 10, 2011
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