The headline on the front page of the December 22, 2008 edition of the Wall Street Journal read: “Developers Ask U.S. For Bailout As Massive Debt Looms.” Obviously, these developers didn’t follow NetGain’s recommendations.

John Neville Keynes (1852-1949), the English economist and father of the famous economist John Maynard Keynes, said: “A positive science may be defined as a body of systematized knowledge concerning what is.” That quote may be the most perfect definition of due diligence. When applied to income property, it answers the following questions essential to every investor’s return on investment: Should I buy that property? What price should I pay? Should I sell that property? What price should I sell it for? Should I refinance that property? Should I invest in capital improvements for that property? The rationale to finding the answers to those questions is predicated on good, qualitative, professional due diligence.

Because income property is an illiquid (no secondary market) asset, it is especially vulnerable during a recession. Consequently, when making a financial decision affecting income property, good, qualitative due diligence is not an option. It would be an irresponsible act not to execute good, qualitative due diligence.

NetGain has developed a comprehensive and unmatched due diligence system for income property investors. It is called the Economic Valuation System (EVS™) and was originally published by the Dow Jones Press. EVS™ is a pro-active system that allows the investor to grade and score the property on a Web-based form. A printed buy, hold or sell recommendation is the final result. EVS™ includes over 100 critical issues that affect the value of income property. These 100+ issues are divided into seven main categories: Area, location, structural integrity, support amenities, capitalization rate, debt, and leverage. Use of EVS™ requires registering (at no charge) with NetGainRealEstate.com. In addition to free access to EVS™, you will receive timely updates on market and economic changes that affect the value of income property.

Once you have completed the EVS™ program for a property, you still have to place a value on that property. Next you go to NetGain’s National Income Property Index (NIPI™). This index weighs and interprets the impact of consumer confidence, unemployment, and mortgage cost on the economy. It then translates that information into a recommended capitalization rate.

NetGain believes that the capitalization rate is the purest and most dependable financial indicator for determining income property value. EVS™ is the gateway for obtaining the most reliable capitalization rate. By using NetGain’s EVS™ and NIPI™ together, the 2009 income property investor will increase their probability for maximizing gains while minimizing risks.