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|Friday, August 22, 2014|
BY CLIFF HOCKLEY | OB GUEST CONTRIBUTOR
A wealthy grandmother dies leaving a $3 million commercial building to her heirs without a plan; five family partners share interest in a $5 million apartment building, and one of the partners goes through a divorce while another gets into a terrible car accident. Situations like these can affect any group of investors, but when business intersects with family, a host of situations can arise. Without a clear vision and careful planning, hard-earned investments can become stressful burdens.
The foundation of a strong financial plan lies in understanding how the assets in question can benefit the stakeholders according to their specific financial goals. For real estate investments, owners typically derive value in four ways:
The personal financial situation of each investor determines the extent to which they can derive value, which can make real estate a smart move, even when return rates seem low compared to other types of investments. For instance, consider a choice between a commercial building with a 6.5% cap rate and a well-managed hedge fund earning an average of 10% (assuming similar risk). While the immediate cash flow of the stocks exceeds that of the real estate, factoring in appreciation and depreciation can boost the actual return considerably, depending on the profile of the investor.
A strategic plan is necessary and should address a number of critical questions, including:
These questions can only be answered when the family agrees on the goals of the investment. Each owner should use an understanding of his/her own financial position to frame his/her goals in terms of the potential benefits of a real estate investment. Important factors to consider include:
Just like in any business, a clear set of goals implemented by an effective strategic plan will maximize the long-term earning potential of the group. No matter the goals of the investment, however, families should remember to treat the business as a business. When personal agendas cloud the judgment of those in charge, investments and relationships both suffer. By understanding the benefits of real estate investments, families can agree upon goals that will make their investments work for them.
Cliff Hockley is president of Bluestone & Hockley Real Estate Services
Thursday, January 15, 2015
BY JACOB PALMER | OB DIGITAL NEWS EDITOR
Consumers love the savings they get from low oil prices, but how has business been affected?
Thursday, December 11, 2014
BY APRIL STREETER
Democratic gains pave the way for a revival of environment and labor bills as revenue reform languishes.
Tuesday, January 20, 2015
BY LINDA BAKER | OB EDITOR
A place-based multimodal transportation plan for Mt. Hood is long overdue.
Wednesday, January 14, 2015
BY JACOB PALMER | OB DIGITAL NEWS EDITOR
Portland's cab companies urged city hall for consideration as officials weigh new rules for Uber and other ridesharing companies.
Friday, December 12, 2014
BY LINDA BAKER
Studying ground-running birds, a group that ranks among nature's speediest and most agile bipedal runners, to build a faster robot.
Thursday, December 04, 2014
BY DEBRA RINGOLD | OP-ED CONTRIBUTOR
How important are institutional and/or program evaluations provided by third parties in selecting a college or university program?
Friday, January 23, 2015
BY KIM MOORE | OB RESEARCH EDITOR
Carbon pricing is gaining momentum in Oregon, sparking concern for energy-intensive businesses — but also opportunity to expand a homespun green economy.
Real Time - Oregon Business
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|Legislative Preview: A Shifting Balance|
|Tackling the CEO-worker pay gap|
|Corner Office: Pam Edstrom|
|Justice for All|
|Corner Office: Timothy Mitchell|
|Corner Office: Sheree Arntson|
Is your business ready to join us in the call for action? This opening panel includes Oregon businesses who will discuss why they signed the Oregon Climate Declaration, the investments they are making to reduce carbon emissions, and how their actions are affecting their companies.
Get ready for two days of special events produced with the EPA, Portland Timbers and ISOS before and after the GoGreen Conference on October 16.
How sports tourism is driving economic growth and making cities across Oregon a better place to live.
Port of Morrow's business-ready attitude has a surprising global impact.
Through its support of the arts, the Cultural Trust is strengthening the business community.
The official launch will be Jan. 14.
In a switch on the traditional trade show, representatives from UO departments and local and state agencies will host tables to connect with businesses and vendors. The fourth Reverse Vendor Fair will take place Wednesday, Feb. 25, in Eugene.
Featuring Oregon Department of Agriculture Director Katy Coba along with high-profile Oregon Ag attorney Tim Bernasek whose recent matters include representing the Oregon wheat farmer who discovered unreleased “Roundup Ready” resistant GMO wheat growing in his fields.