Why Are Church Properties in Detroit Now More Valuable?

The ability of taking one solid idea and having it lead to another is one of the best things about being involved in real estate. Many people benefit in many ways from a single action. What is even better is that you don't have to be the one that comes up with a brilliant idea. Putting yourself into a situation where you can learn ideas and build on them to benefit yourself and your team can be as valuable as originating a concept.

 

A great example of this is the (below linked) story about a group that has secured funding for the idea of creating situations which create revenue through business use for churches. It's a situation that helps get people off the streets and spreads the entrepreneurial style.

 

What does this have to do with real estate?

 

To me this has plenty to do with real estate. At this moment, there are a number of church properties for sale, while others are abandoned because a church moved to a better facility or went under. There are properties which could be converted into church (or other religious use) facilities and used for this purpose. Consider that a group just received $1.2 million in funding to implement the concept in Detroit, it's obvious that other people believe in this path.

 

Real estate investors in Detroit aware of this program likely realize that not many people are aware of this new program for small businesses. Knowing this, and finding actual or existing church properties could start them off with a new and viable opportunity. Brokers have a way to expand businesses looking to rent commercial property. Contractors could benefit by getting work renovating church interiors to support business use. The list goes on. 

 

One thing that stands out to me is that there is nothing to say this idea, including the ability to secure seven-figures of funding, is limited to Detroit. There is a lot to be said about getting the jump on an idea and being first. 

 

Let's discuss.

 

https://www.dbusiness.com/hustle-and-muscle-articles/churchspace-closes-1-2m-funding-round-moves-to-detroit/

 

 

Why Short-Term Rentals May Be Coming Up Short

I continue to talk with new investors that think short-term rentals is their best path for getting started in real estate despite the many challenges already in place. With short-term rentals, more than any other facet of real estate, there are so many factors which go above and beyond the property and the numbers.

 

Unfortunately, new research brings another challenge for those already involved with short-term rentals, especially in communities which cater to international travelers. Miami, Los Angeles, San Francisco, and NYC are among the more prominent examples. Fresh research shows the expected significant losses from international travelers not coming to the U.S.

 

Much of the hotel industry has already, and wisely, been on the attack, resulting in more "staycation" advertising and marketing campaigns to the public. However, short-term rental owners do not have that luxury. Advertising venues like Air BNB and VRBO will continue to generate revenue from communities which cater to domestic travel and not necessarily need to increase their campaign spending.

 

This research is a major example of why gathering ongoing research is so important in real estate. It could be a reason for an owner to sell or seek a long-term tenants rather than deal with the added challenges of a smaller audience of potential tenants. Meanwhile, it is possible that an individual or group with strong connections to continuing international travelers could pick up a bargain by purchasing a short-term rental property at this time.

 

There is more to it than making the numbers on the property work.

 

https://www.hospitalitynet.org/news/4127190.html

 

 

 

How Preparing A Real Estate Project Is Like Planning A Restaurant

Operating a restaurant business has plenty of similarities to investing in real estate, and that is without investing specifically in a restaurant property. There is so much more than the concept when you consider operating costs, employees, the menu, and the competition.

 

However, like with real estate, so much depends upon market conditions. Research shows how, in many communities, the economy has impacted the number of times many people are eating out. Some restaurants, especially chains, have integrated pick-ups into their primary operation. Others, however, were not geared toward having pick-up. This means that the menu offered is now only a part of the operation. Customers lose the experience of being there when they come in, grab their bag, and leave.

 

Real estate developing and investing is becoming the same way. The goal should be the solutions that a property or investment provides. Knowing who would buy or rent and their preferences is an important part to the potential for success.

 

Whether for a restaurant or a real estate project, the numbers need to work. However, these days, so does the methodology. I help create and enhance business plans. Keep in mind that investors and decision makers are not only looking at your proposal. Let's make your plan come to life.

 

https://www.nebraskanewsservice.net/news/a-changing-consumer-market-rising-food-cost-and-delivery-apps-how-the-restaurant-industry-is/article_5123650f-3e97-4da2-a825-c42afbb2e40a.html 

 

 

International Investors Are Not Stopping.......

One strategy for real estate investors is to gauge what other investors are, and are not, doing in terms of investing trends. Many, including myself, find it interesting that international investors continue to look at U.S. opportunities while many domestic investors are hesitant at this point in time.

 

It seems like I'm telling at least one valued client or connection every business day that "the opportunities there right now won't be there if and when rates or market conditions change". If loan rates are high right now, but the numbers work, you go in to a deal knowing that you can refinance when rates go down enough to make it worthwhile. You might even be able to cash out by that time. 

 

Newer trends are emerging, such as a greater emphasis on infrastructure, and the expanding need for data center properties. (I already have one client that knew to have some opportunities for data centers available for hungry buyers right now instead of "waiting to see what would happen".) While there are some legitimate concerns in the current market place, what it should mean is the need to expand researching to identify the "upcoming" real estate opportunities sooner instead of waiting until after the fact and facing fierce competition.

 

https://www.afire.org/survey/pulse14425/

 

 

 

Office To Apartment Conversions Start With Location

In real estate, if you are going to perform research on a concept, you need to go all in. The purpose is not to prove your theory. It is to gather enough data and information to be able to make an informed and unbiased decision. I recently had a coaching client tell me he did not need to research converting office space to apartments any further because he saw where doing so is not cost effective. Upon my query, he told me his finding was based on data for the large city closest to where he lives.

Although office space conversion may not be feasible in his area of concentration, his answer forced me to remind him that his research was not complete. My first question to him was “What is your intention?” Upon his silence, I expanded on my response. “What was your goal? Is it to find a location to do an office conversion? Or is it to find a good real estate investment within your local area?”

The answers to those questions go a long way in determining the next step. Those staying on top of the office space to residential trend know that some cities have solid opportunities for profit while others most definitely do not. It all depends on where you are looking, and that’s the point. 

Los Angeles needs the housing, but bureaucracy continues to make doing office to residential conversions too much of a challenge to adjust within the current climate. In Stamford, CT, developers are creating conversions even before legislators can keep up because there is so much demand and plenty of opportunities. In Pittsburgh, the city offers incentives and projects are affordable, but the demand for more housing is not enough to support the effort. Houston brings logistical concerns, such as office buildings not having enough parking sufficient for a large residential complex. 

There are plenty of situations where these conversions are appealing to all concerned, but it takes thorough research to find them. Meanwhile, there are plenty of cities with solid real estate development and investment opportunities, which may or may not involve conversions. Establishing clear goals is necessary before your research person or team begins to investigate. My client is another example of why you need a research person or team to help you make important choices.

 

https://propmodo.com/how-cities-are-turning-empty-offices-into-housing-and-what-it-really-takes-to-make-it-work/ 

 

 

A Taxing Commentary On How States Attract Businesses

Some states and municipalities clearly look at the short-term while others look to the long-term when it comes to generating revenue. It is not about geographic location, since there does not appear to be any regional trends.

 

The below linked article shows how corporate taxes have risen in Illinois at the same time there have been significant reductions in other states. Illinois is among the states that wants to generate revenue "today" from businesses located there, seemingly with little interest in attracting more companies to relocate or originate there.

 

Other states, including North Carolina, have reduced corporate taxes to encourage business growth. To compare, NC's decision has created 46 times more jobs than Illinois within the same time frame. More jobs also means more individual taxpayers supporting the state and local economies. 

 

I connect this to real estate developers and investors I talk with that tell me they are "too busy now to worry about a new project". What happens is that once their current "big" project either completes or falls through, THEN they begin to market and look for what's next.

 

Your best strategy is to include short-term AND long-term plans and goals and act upon them simultaneously. If you are not doing so currently, let's connect. There is no need to lose out on revenue just because your current project has ended.

 

https://www.illinoispolicy.org/corporate-income-taxes-have-stifled-illinois-pandemic-recovery/

 

Why A Multi-Million Dollar Build Is Halted In Progress

Research and tracking should not stop once a real estate project is underway. There are situations where changes can be made on the fly, even when millions of dollars are involved. It's easy to "set it and forget it", but I can't emphasize how often staying on top of the situation can make a huge impact on your project.

 

At this time, a multi-million dollar multi-family construction project in Jersey City is on hold even though it is underway. The reason is not because of rising construction costs, supply chain issues, labor challenges, financing concerns, or weather.  It seems the city recently adjusted its allowances for affordable housing, which took place after this project was planned.

 

Because of these changes, the structure could now be 20 stories higher! The developer obviously feels it is worth waiting on approval from the city and revising the construction plans, materials acquisition, and its timetable for completion because of the significant additional income possibilities an approval would create.

 

I'm not saying that we should see numerous projects stopped based on the potential for additions and changes. If the developer of this project does not get approval, or if the numbers for adding do not add up, this delay could prove costly for the short term.

 

However, if approval is granted by Jersey City and the additional 20 stories are built, the long-term additional gain will make these delays extremely worthwhile. It will have been a brilliant decision to do so. Yet, if the developer was not on top of the new allowances to create more housing and went ahead with the intended project, they would have lost a significant long-term revenue opportunity. One more time. Signing on the dotted line should not mean that research and due diligence should stop.

 

https://jerseydigs.com/imperial-tower-jersey-city-expansion  

How A Little Rock Could Be A Big Opportunity

Seeing that approval has been granted to a "mystery developer" for a $1 billion data center brings several elements to my attention. These are things for a real estate developer, investor, broker, or contractor to be aware of while researching and planning ahead.

 

I continue to preach the importance of pursuing the "next" project(s) no matter how busy things are at the current moment. There is not one source of information that could help you toward your next big deal. That's the point. The deal in the article linked below is planned for Little Rock, AR. I'm sure some people have stopped reading this upon seeing it's about Little Rock. However, it is really not.

 

The big takeaways should be the significant incentives this "mystery" developer is able to take advantage of. Little Rock wants this data center, with reasons ranging from the need to keep up with other large municipalities to the 50+ jobs it will create once completed.  

 

This developer gets a 65% property tax reduction over 30 years! In addition, the tax break threshold was reduced, for this project, from $500 million to $100 million. 

 

Little Rock is doing a great job of attracting something that will greatly benefit the municipality for years to come by doing what it takes to make it work for all concerned. However, Little Rock can't be the only municipality that would make these concessions. Having "proof" that such measures can be done to make a huge real estate development beneficial for all concerned is a great start for where opportunities and proposals come from.

 

Those that bypassed the story "because it is Little Rock" might be missing out on a huge opportunity for the future.

 

 

https://www.datacenterdynamics.com/en/news/mystery-developer-plans-1bn-data-center-in-little-rock-arkansas/  

 

 

 

Million Dollar Starter Homes On The Rise

Five years ago, there were 85 U.S. cities which had starter homes (in the lower third of prices) at more than $1 million. As you would expect, most of those were in California, New York, and Hawaii. As of March 2025, that number is at 233 cities!

 

Based on current economic conditions, we can't expect that total to drop by very much, even though it was 239 at the start of the year. The point is that this is where home prices may be headed. This impacts both the residential AND commercial side. Why?

 

At $1,000,000 even, the down payment would be as much as $200,000. That's the down payment.  The mortgage would be approximately $6,500 per month. Think about that.

 

Meanwhile, some real estate professionals cannot seem to understand why some people are spending $2,500 to rent a nice apartment. It's true they lose out on tax benefits and that their place of living is not an investment. However, it's also true that they "save" a down payment of up to $200,000, "save" $4,000 each month on their cost of living, and have an easy option to relocate if there is a significant cost increase or their personal situation changes.

 

This is not to say that people should consider renting as their first option. It is to say that many people already are, and that trend may continue. All of this adds to the need to be more creative than ever when it comes to working in real estate.

 

I'm seeing more people working out seller financing and "Subject To" transactions. Those are tricky, but offer many solutions. I'm working on being able to expand those offerings, but there will also need to be an adjustment in the thinking about how real estate is purchased.

 

Stay tuned.....

 

https://www.zillow.com/research/million-dollar-start-home-2025-35100/ 

 

 

 

 

 

 

 

 

https://www.zillow.com/research/million-dollar-start-home-2025-35100/ 

Where 38% of Home Sales Were For $5 Million or More

It seems that there are still some buyers willing to spend the big bucks these days when the situation works for them. While Northern California has plenty of residential and commercial real estate challenges, an interesting fact has come out:

 

During a 4-week stretch in 2025, 38% of home sales north of San Jose were for $5 million or more. Within the same time frame and location, HALF as many buyers purchased homes priced between $1 million and $2 million.

 

Let's be honest and admit that most of us would have bet the difference (and lost!) about how much real estate buyers would be willing to commit to during this period in our economy. Kudos to the brokers that engineered these deals by coming up with research and data to justify the amount of higher priced purchases. Several of the homes sold for more than $12 million.

 

Properties don't "sell themselves". Research and marketing are what are needed to get deals completed, no matter what the circumstances. 

 https://www.almanacnews.com/home-sales/2025/04/18/out-of-this-weeks-53-midpeninsula-home-sales-22-properties-fetch-5m/

 

Real Estate Opportunities Come Before The Numbers Work

The numbers can work very much in your favor when evaluating a property or development opportunity, but it takes a village to make it happen. Literally. Or, in the case of Chicago, it can make it not happen. Some municipalities encourage development while others make it far too difficult. Those that make it difficult can be doing more harm than good simply because there are other more friendly and receptive places to go.

 

In the report linked below, we see other locations which allow significantly more ADU (additional dwelling unit) opportunities than Chicago does. Although the process of making them happen is a much shorter path in these other areas, the amount of competition could weigh on the eventual impact of making the investment. It is possible that the best strategy is to research for "middle ground" locations. Finding a location where it is not overly difficult to complete the permit and planning process and not facing as much competition for the new units could make income happen much more quickly. With the right research, of course.

 

Perhaps you are not definite on building ADUs. In that event, there just might be something you could do that would work more efficiently in Chicago.  You won't know if you don't explore as many possibilities as you can.

 

 

https://www.illinoispolicy.org/chicago-makes-it-too-hard-to-build-dwelling-units/  

Are home buyers gambling on Vegas?

We could say that, at least for the moment, home buyers are not gambling on Las Vegas. Only South Florida and Houston have seen more significant decreases in the latest home sales statistics. It is safe to say that a big part of the Florida decreases are concerns about recovering from the recent natural disasters and worries about an expected significant rise in insurance rates. Much of the current decline across the board is due to economic concerns.

The Las Vegas situation is more interesting from a real estate investing standpoint. The surrounding area has been seeing a ton of new residential construction over the past three years. Having newer properties on the market at potentially lower prices may not bode well for investors that like to buy existing homes to upgrade and sell higher. 

Meanwhile, people at varying income levels continue to want to move there. It could be a cat and mouse game, but we don’t know for how long.

Some investors, developers, and real estate professionals may shy away from Las Vegas. However, something has to give in the near future. This is an excellent time to concentrate on researching the market. Knowing which areas and properties offer the most appeal for “when the time comes” might make you first in for opportunities to buy, sell, or partner in a deal.

It’s not about allowing fresh research to stop you in your efforts. The secret is knowing how to use fresh research you develop or uncover.

 

https://www.reviewjournal.com/business/housing/las-vegas-valley-makes-top-5-in-pending-home-sales-in-a-bad-way-3352426/ 

 

 

Domestic Travel Could Impact Real Estate Decisions

If you are involved with or considering involvement at any level with U.S. hospitality this may be a better time than you think to assess. Transportation experts' research shows that roughly 80% of people expecting to travel within the next year are adjusting their plans, especially when it comes to international travel. 

Even with the current economic uncertainty, people still need to get away and travel. It likely means "closer" travel and staycations. Hospitality settings which are not in the more common places may benefit, along with short-term rentals, and restaurants and other businesses which depend upon or benefit from tourism.

 

Although the numbers need to work for an investment or renovation, the possibility of an increase in business might be worth exploring. It's another instance of the right research making a huge impact on future profits. 

 

https://www.costar.com/article/1050632684/us-inbound-international-travel-takes-12-hit-as-economists-postpone-pre-pandemic-recovery-to-2029  

 

 

 

Another Potential Real Estate Obstacle in Florida Could Go Well Beyond

 We may all need to face the fact that the real estate industry as we know it is on its way to drastic changes which could impact hundreds of thousands of jobs. Florida has brought many real estate opportunities over the years both nationally and internationally. People move in, people move out, and everyone from short-term rental landlords to developers to retiring consumers have been able to participate and take advantage.

 

Many licensed real estate professionals work relocations and/or have a license in more than one state. Meanwhile, recent natural disasters have left billions of dollars in work to be done while fears of what insurance companies can, can't, and won't do have many people up in arms.

 

Now we have word that the current Florida real estate licensing structure may no longer stand as it has been. Even the 225,000 licensed professionals in the State may not be able to stop proposed legislation.

 

If it happens in Florida, there is no telling how it would impact transactions involving out of state real estate licenses. Consider the chaos which resulted from the change in buyer commission structure last year, and how elements of the industry still need to recover from that.

 

This news may, in the long run, be a much bigger concern than rates and the current economic battles:

 

Challenges for Florida Real Estate

 

 

How Did Seven Companies Know To Bid On A Housing Conversion?

Over the years I have come up with questions to ask real estate professionals and investors when I am curious about how "smart" they are willing to work. It comes from the saying, "Work smarter, not harder". 

 

Sometimes I ask questions like, "Who handles your research?" to bring up how important research is toward uncovering opportunities and for long term planning. Another question is "When is the next local Zoning Committee meeting you plan to attend?"

 

You could be in the thick of a new project, but that should not stop you from attending (or sending a trusted representative) to zoning meetings in municipalities your work includes. The one time you find out something that your competitors don't know out of five meetings you attend could literally be the "million dollar difference" for you and your team. If a group of competitors also "know", you will be in the running.

 

Here is a prime example. The city of Menlo Park CA announced an opportunity for converting parking plazas to affordable housing. They received SEVEN applications. Those entities have a one in seven chance of being selected for a large project. However, there are entities, some of which may be a better fit, that will have a ZERO percent chance because they were not ready for the opportunity.

 

In the Menlo Park situation, there are seven applicants. If there was one application, that company gets a big project in part because they took the right steps to pursue it while competitors did not. Because they had the right research in place, six or seven figures could be added to their bottom line.

 

Who handles YOUR research?

 

https://sfyimby.com/2025/04/menlo-park-opens-three-downtown-parking-plazas-to-affordable-housing.html

 

Finding The Best Amenities Matters

Buyers and renters look for certain amenities, while sellers and landlords look for amenities which could give them advantages over 'competing' properties. The "hidden" features can make a difference in the choice of a potential buyer or tenant that others on both sides of the transaction would not think about.

 

A tenant might be willing to pay $20 a month more for a unit with extra built-in shelves which could hold their book collection. Someone using a walker might prefer the unit next to the elevator instead of the quieter one at the far end of the hallway. In this day and age where customer service continues to fade into oblivion, knowing the 'particulars' of the potential buyer or seller could be a difference maker in getting a deal done.

 

An investor I know that has his real estate license will access similar properties on the market to compare those amenities against what he currently has (or plans) for a property his team is about to fix up or renovate. He knows that he will be competing for some of the same potential buyers or tenants that will be looking at those other properties. His goal is to be able to tell them things like, "You won't find A or B in any other currently available property" or "This unit has the biggest closet in West End". It could be he finds another unit using "cheaper" tile and being something he can pick up on for his benefit.

 

It's a two-pronged process to be ready in these situations. Knowing as much as possible about competing properties is one element, but knowing what the "customer" wants is another. Each property, even if in the same building or within the same development, is or can be made to be unique. Same with each potential buyer or tenant.

 

Knowing how to uncover that information brings success.

 

https://www.realestatenews.com/2025/04/11/renovations-that-attract-buyers-and-maximize-roi-for-sellers

 

 

When A "No Comment" Makes It Worse

My having worked on marketing with real estate agents, brokers, developers, and investors for more than 30 years helps me (and, consequently, my valued clients and students) to readily identify marketing opportunities even when there aren't any.

One of the most important things to do is to be ready to turn a negative in to a positive no matter how many of few years of experience. There are times when things do not go as hoped or as planned, especially in real estate. The news article below describes one such time, in which a multi-million dollar property sold for over $400,000 LESS than the asking price and below a sales price from 2013. (This sale occurred in the Fall of 2019.) 

The article about this property sale appeared in the Chicago Tribune, which remains one of the largest newspaper publications in the country. It so happens that the reason for this story is that the 'featured' home was once owned by a former Head Coach of the Chicago Bears. 

However, this sale of the house had nothing to do with the former coach, who did rather well with buying and selling the property earlier in the decade.

The "negative" in this story is the report that the home sold for $400,000 under the asking price and for less than it did in 2013. (This is only one example, since we know this continues to happen today.)

Within the story it is noted that the agent, Paige Dooley, "declined to comment". This is exactly where an agent needs to turn that negative into a positive. Trained journalists know to report the specific results of attempts to contact an individual for a story. Frankly, declining to comment is the worst thing she could have done. Declining comment infers that Paige had nothing to say about this story. 

It is as though she is admitting that she did not do well for the sellers and wanted this story to go away. There are likely to be potential home sellers reading this story that would be less likely to consider her for selling their home because she gave NO explanation for a deal that was not what it should have been for her client.

I try to advise my clients and coaching students about looking for the benefit of outside publicity. Dooley had the opportunity to be quoted in the Tribune, at no cost, and could have turned that in her favor. Chances are she spends marketing dollars on social media and advertising of her services. Positive publicity in this newspaper and its web site would normally cost a large amount.

What she should have done is commented about how "This home is one of many great opportunities for buyers in Winnetka to secure a great deal!". Had she done so, she would have pointed out how this buyer got a home in 2019 for less than it cost in 2013. Such a quote would have made readers of the story think that if they contacted her, she would help them find a good deal.

By declining to comment, she put out only a negative impression. To me, this was a 'double' negative. The first is that there are no reasons for a potential buyer or seller to contact her. The second reason is that the reporter is not likely to contact her for a future story, meaning she lost her chance.

Do not decline comment and lose out on publicity. Be ready with a positive spin. I can't help but think about how much her income would have increased if I had been her marketing and/or research person.

https://www.chicagotribune.com/real-estate/elite-street/ct-re-1206-elite-street-trestman-20191206-cyn6hmvijbd5xbysxsnnjlhb3u-story.html

If They Can't Afford To Buy - Be Ready With Rentals

Population figures prove that people continue to want to live in locations which have much higher than average home prices, making it more challenging for many to buy a home where they choose to be. People have various reasons for choosing not to buy in those situations.

 

Some people choose not to buy at current higher prices because they expect prices to drop at some point in time to make buying a house more affordable (or realistic) to potential buyers. If they "buy high" they could be stuck a few years from now when considering selling. Other people don't have what it takes to get a down payment done at higher prices.

 

If you own one or more "older" properties, especially with plenty of equity, this figures to be a great time to rent them. Based on home prices, you could be able to command a much higher rent rate than in previous years and ride the "increased profit" wave for as long as you can. 

 

The research in the below linked article shows ideal income levels by state when it comes to buying a home. That info could be a big help when it comes to planning rental properties. People that are "waiting on the market" could make ideal tenants. Show them how you are saving them the down payment and allowing them to live where they would like.

 

It is not always only about the property. Offer the benefits and the opportunity. Let's work together for mutual success!

  

 

https://www.livenowfox.com/news/how-much-you-need-afford-home-us

Create Your Own Bid On A Property

Another instance of how far doing your research homework could take you is in this scheduled upcoming auction in Florida. Two luxury condos are hitting the auction block for just over one-third of their current estimated value. Even if renting them out is not allowed, there are several exit strategies to choose from even if competing bids take the purchase price to 60%. 

The first step is to find out as much as possible about each unit, especially why they are going to auction instead of being listed in the traditional way. Although in the same auction setting, the reasons may be different for each unit and make one more attractive to bidders than the other. However, if that happens, it can be worth exploring both opportunities separately. Why?

If one opportunity has a clear lead over the other, the first one may attract the majority of bidders. Having little to no competition for the “second” condo could result in an even better deal. The hundreds of thousands of dollars potentially saved without competitive bids could cover the added costs of preparing a property for the chosen exit strategy.

Creative strategies may be able to be implemented upon acquisition. For example, if these condos cannot be rented out, perhaps a “rent to buy” situation could skirt the issue. (I don’t know in the case of these properties, but it should be part of the research to find out.) If not, there are likely several seller financing options to increase the profit potential. 

Sometimes it is worth bidding (if you have the resources available) to be able to get the results and eventually find out who the winning bidder is and what their eventual strategy is or was. That is the type of information that becomes valuable for future auctions and potential purchase situations in the same property or area.

As my clients and students know, the majority of the opportunities you research thoroughly do not pan out. The value of knowing exactly why they did not pan out and comparing it with the eventual results of the deal can prove well worth the time investment over the long haul. Let me show you how.

 

https://www.einpresswire.com/article/799525095/two-waterfront-sarasota-fl-properties-to-be-sold-at-online-auctions-beginning-april-14th

 

 

When One Bidder Gets A 60% Discount On A Property

There is no denying that there are some problems and concerns with some aspects of the real estate market. That should not mean that a real estate professional or investor should not continue to constantly research for current and future opportunities. An airplane needs enough fuel to reach its destination regardless of the number of passengers. 

We had a recent situation in which a (literally) billion dollar asset, the biggest office building in Boston, was sold at auction for 40% of its estimated value. It remains to be seen how the property will be utilized as rumors swirl about conversion to mixed use or various forms of repurposing. Clearly, by spending $400 million to acquire a discounted property, the buyer has research and information leading them to a vision of long-term profit potential.

From my viewpoint, the large purchase and the 60% “discount” the buyer engineered is actually not the most significant part of the story. According to the recap article, the winning buyer was the ONLY bidder. We may never know if there were no other bidders because of the large sum of money needed or if other realistic potential bidders had non-financial reasons for passing on the property. 

Meanwhile, the winning bidder obviously has research indicating the potential for making a $400 million investment work. Had there been other bidders, they may have had to go higher, or perhaps drop out of the bidding, depending upon their research.

The fact that there was only one bidder is what stands out in this situation. An offer of slightly under half price might have outbid this buyer to acquire a property at a bargain rate. Let this serve as a lesson about missed opportunities. We won’t know for sure for a few years, but, as the saying goes, you miss 100% of the shots you don’t take. 

https://bostonrealestatetimes.com/400-million-bid-wins-foreclosure-auction-for-one-lincoln-office-tower-in-downtown-boston/