Tags |
|
|
Links |
|
|
Suggest - The Way We Were - Investors Struggle With High Prices and Low Cash Flow
Summary: Over the past 5 years, retail housing values
have risen 80% while investors are paying 300% more
for investment properties. This is leading to more foreclosures among investors who are buying without carefully considering how purchase decisions affect exit strategy.
Recently I
Recently I
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
spent some time researching selling prices of investment real
estate in Atlanta, GA between the year 2000 and the present time, February of 2006.
What I found was very interesting. I pulled old files representing deals that took place more than 5 years ago. At that time investment prope
What I found was very interesting. I pulled old files representing deals that took place more than 5 years ago. At that time investment prope
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
rties were selling for an average of around $20,000 for a 2 bedroom 1 bath property in decent, (almost liveable), condition.
In 2000 a 3 bedroom 1 bath SFR in liveable condition sold for around $30,000 in an average neighborhood. We paid as little as $5,000 for a house with some fire dam
In 2000 a 3 bedroom 1 bath SFR in liveable condition sold for around $30,000 in an average neighborhood. We paid as little as $5,000 for a house with some fire dam
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
age and as much as $53,000 for a 1000 sq ft brick house in an excellent neighborhood, with a true ARV of $250,000!
5 years ago, an average gross profit spread on a deal was around $100,000. It was relatively easy as a seller, to make $10K to $15K cash profit on a quick cash sale to another
5 years ago, an average gross profit spread on a deal was around $100,000. It was relatively easy as a seller, to make $10K to $15K cash profit on a quick cash sale to another
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
nvestor, and still leave that investor as much as $100,000 in gross profit spread. In short, there was plenty of profit to go around. Mind you, we were using legitimate, conservative appraised values from independent appraisers.
But today, in early 2006, these kinds of real margins are much
But today, in early 2006, these kinds of real margins are much
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
tougher to achieve. The present market is filled with buyers who lack a good understanding of the issues that affect profitability. As a result, many are buying properties at prices that are just too high to make the deal work.
In fact, my research indicates that retail housing prices - ho
In fact, my research indicates that retail housing prices - ho
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
uses sold to owner occupants - have gone up nationwide an average of 60% to 80% over the past five years.
At the same time, in Atlanta, selling prices to investors have gone up some THREE HUNDRED PERCENT! The phenomenon of so many investors selling to so many other investor buyers has creat
At the same time, in Atlanta, selling prices to investors have gone up some THREE HUNDRED PERCENT! The phenomenon of so many investors selling to so many other investor buyers has creat
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
ed an artificial market in areas heavy with investor activity. The data I had close at hand was for the Atlanta market, but my readers from around the country tell me that this is also true in many other markets.
What this means is investors buying today are paying the highest prices ever r
What this means is investors buying today are paying the highest prices ever r
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
corded for Real Estate Investment Property with no guarantee that these properties will go up in value, or cash flow enough to justify their purchase prices.
After reviewing 25 years of real estate market data, I personally believe that we are at the very peak of the current real estate mar
After reviewing 25 years of real estate market data, I personally believe that we are at the very peak of the current real estate mar
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
ket cycle and will soon see more evidence of a downward trend in property prices and the resulting effect that this will have on appraised values.
It calls to mind a mental picture of a kid swinging on a swing set. As you swing forward you reach a moment when you become virtually still as
It calls to mind a mental picture of a kid swinging on a swing set. As you swing forward you reach a moment when you become virtually still as
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
the swing reaches its peak, pauses just momentarily, and then begins its descent to the backward part of the swinging motion.
I believe we may be at that momentary pause in the cycle before the market starts to swing the other way. In the first quarter of 2006, we seem to be enjoying the pi
I believe we may be at that momentary pause in the cycle before the market starts to swing the other way. In the first quarter of 2006, we seem to be enjoying the pi
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
nnacle of a long and exciting swing upward.
But just as the forces of gravity act upon that swing, cause it to pause, and then return where it came from, there are forces at work in the real estate markets that could act like gravity to pull real estate values downward from their present p
But just as the forces of gravity act upon that swing, cause it to pause, and then return where it came from, there are forces at work in the real estate markets that could act like gravity to pull real estate values downward from their present p
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
ak highs.
Some of these "forces of gravity" could be rising interest rates, rising foreclosure rates, slowing investor activity, and unforeseen events like another devastating hurricane or a major terror attack.
I would caution investors at this point to be extremely mindful of the fundame
Some of these "forces of gravity" could be rising interest rates, rising foreclosure rates, slowing investor activity, and unforeseen events like another devastating hurricane or a major terror attack.
I would caution investors at this point to be extremely mindful of the fundame
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
ntals when buying any investment property.
I am very concerned about the number of investors who have gotten into the market over the past two years and are finding themselves in foreclosure on one or more properties.
While the general media outlets are reporting that houses are still sell
I am very concerned about the number of investors who have gotten into the market over the past two years and are finding themselves in foreclosure on one or more properties.
While the general media outlets are reporting that houses are still sell
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
ing well, the fact of the matter is that more investors than ever are finding their cash flows squeezed or their properties are not selling.
This is leading to a very high foreclosure rate in the investment property community.
While the National Association of Realtors may downplay slowing
This is leading to a very high foreclosure rate in the investment property community.
While the National Association of Realtors may downplay slowing
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
sales as a small percentage of their overall market, the fact remains that there are no specific reporting mechanisms for investor sales. Mass media reports can be misleading for investors.
It is very difficult for the average investor to get any kind of accurate information that shows wha
It is very difficult for the average investor to get any kind of accurate information that shows wha
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
's actually happening in the investment property market both for sales to buyers or property cash flow data.
While there are always good deals available in any market, you have to pick and choose carefully.
I caution you to be especially careful about analyzing your deals and doing your
While there are always good deals available in any market, you have to pick and choose carefully.
I caution you to be especially careful about analyzing your deals and doing your
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
due diligence before you commit yourself to anything. At the present time it is very important to be conservative when evaluating investment property deals.
With investor buy prices, property taxes and insurance at all time highs, there is much more risk in the present real estate market.
With investor buy prices, property taxes and insurance at all time highs, there is much more risk in the present real estate market.
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
But, dark real estate clouds always have a silver lining for those who understand where their cash flow and profitability are in a given deal. The market forces at work now will eventually force prices to more reasonable levels.
I would expect that eventually we will see prices drop as muc
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
h as 40% in the most over-invested areas. As activity slows, or interest rates rise, more creative seller financing will begin to develop. Investors who are patient and wait for the best opportunities may have to wait a while longer, but in this case patience will definitely be a virtue. **
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
HTTP = HTML link (for blogs, profiles,phorums):
<a href="http://www.suggest.org.ua/article/134711/suggest-The-Way-We-Were--Investors-Struggle-With-High-Prices-and-Low-Cash-Flow.html">The Way We Were - Investors Struggle With High Prices and Low Cash Flow</a>
BB link (for phorums):
[url=http://www.suggest.org.ua/article/134711/suggest-The-Way-We-Were--Investors-Struggle-With-High-Prices-and-Low-Cash-Flow.html]The Way We Were - Investors Struggle With High Prices and Low Cash Flow[/url]
Related Articles:
The Performance Improvement Action Plan - Have You Heard of It?
Find Bargain Items On Ebay Easily And Conveniently
Bookmark it:
|