As an owner,manager and investor of residential property in New York City (Manhattan),Dr.Friedman formulates eight principals that have guided his business practices for the past thirty years.These include:( 1 ) The right location and the best and highest use for that property is the starting point for the real estate investment decision.Anticipating the direction of the movement of people and jobs may be risky,but it is the way to maximize one s returns.(2) The recent perils of the capital markets are strikingly evident to everyone.Leverage,the availability and cost of capital are the lifeblood of real estate.More than ever before,it is imperative to have the complete financial package in place before the project is initiated.(3) The economic vitality of the national and local economy set the parameters of supply and demand.It is job creation,along with other basic demographic characteristics of the locality that fundamentally determines the need for housing and retail space.One must be consistent with the direction of these trends.(4) The tax code fundamentally determines the accounting of profitability.In the US,real estate is a tax- advantaged investment,from ownership of a single-family house to publicly traded REITS.Know the national tax codes and take full advantage of it.(5) In multiple ways government creates the rules of the game.Zoning and Land Use Planning and Building Codes create complexity and additional cost.Knowing how to interact with the bureaucracy is essential.(6) The optimism of the developer fundamentally underestimates the complexity,uncertainty and risk of the deal.Almost cvery project takes longer in time than planned and costs more than budgeted.Do not fall into this error of wishful thinking.(7) The pursuit of money and wealth is only one of the many goals of people.The search for power and dominance,status and prestige are just as evident and often interfere with judgment and decisions about profit.The self-interests of the members of the team do not converge.(8) The marketplace of private property rights and the voluntary exchange of buyer and seller establish the value/price of real estate.It also inherently creates periods of imbalance and cycles of boom and bust.Timing is essential for success.Good luck is also helpful.