Recently, I went to a Tulsa Commercial Real Estate update. The keynote speaker was John S. Baen. Mr. Baen is a professor of business, finance, and real estate at the University of North Texas in Denton, Texas. He was very interesting and informative. I was most captivated by his belief regarding FDIC, the federal insurance that insures the money you put in the bank. He presented a compelling case that FDIC is broke. One of his main points was that there are seven major U.S. banks that are currently in the hole and have been for some time. Although all common sense would promote the closing of these banks, they remain open. Mr. Baen believes that the reason is because FDIC does not have the available funds to cover the money for the patrons of these banks. I thought his premise was somewhat scary, however, he supported this with lots of data.
If this is true, obtaining financing is going to become even more difficult than it has already become. This means to invest, you may need cash, a hard money lender, or a partnership. It is important to foresee issues such as this in order to be prepared ahead of time. This is a good time to focus more on networking. Find people who have cash and people who can partner with you. If it continues to become more difficult to borrow, you will need people in your network to help you keep your business moving forward.