Advice Pool - Real Estate

1. Investment Property

What exactly is an investment property? Since this is real estate investments 101, we will explain. An investment property is a piece of r

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

eal estate you invest in with the objective of earning a return. Primary residences are not considered investment properties because the primary purpose of such re

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

l estate is to provide a place to live. Common investment properties include rental homes, apartments, condos, townhouses as well as commercial properties such as b

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

usiness or industrial parks and shopping centers.

2. Depreciation

Depreciation is a fancy business way of saying something is decreasing in value. Investment pro

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

erties may experience depreciation, because typically as a building ages the value of the physical building depreciates. It is important to note the actual depreci

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ation realized is related specifically to the value of the physical building. Historically, real estate prices seem to follow a positive trend. How can this be if

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

ld buildings have experienced severe depreciation and thus are worth less today than 20 years ago? We must look at the whole equation. The value of the land is in

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

tegrated into the equation as well, and traditionally land increases in value. Thus, when we look at investment properties, we normally see an increase in value t

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

anks to the seemingly continuous appreciation of the land the building was built on.

3. Land Contract

A land contract is fairly simple. When you are looking to i

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

nvest in some property, you will negotiate a price for the land. The written manifestation of these verbal negotiations is a land contract. The land contract for

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

he investment property outlines the terms of the agreements, such as the monthly payments, interest rate, and maturation date of the loan.

4. Land auction

You mig

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

ht have heard other real estate investors talk of a land auction. A land auction is one way of buying an investment property. In a land auction, land is auctioned

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

ff to the highest bidder. Often times one can score a real deal on property auctioned off in such events. Upon winning an auction, you can then sign a land contra

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

ct for the property and hope your investment property experiences appreciation, rather than depreciation, so that you can cash in on your increased equity a few yea

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

s down the road.

5. Lien

Before buying an investment property you will want to make sure the property does not have a lien against it. A lien is basically legale

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

se for a claim against the property. A lienholder owns a legal right to extract their money from a property should the borrower default. Thus, if you buy a propert

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

that has lien on it, and the person you bought the property has defaulted on their loan, you may find yourself in second standing for right to the property behind

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

the bank that has the lien. It is important to do your due diligence and ensure you are not setting yourself up for a fall by investing in property that can be clai

.

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

ed by others.

Conclusion

Keep in mind that real estate investment can become rather complex. However, if you gain a good grasp on the fundamentals of investing,

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

such as depreciation, liens, and land contracts and auctions, you will be in a position to earn a positive return on your investment property for many years to come

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Advice Pool - Investment Property: Part 1

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