If your income depends upon the sale of real estate, you have no choice but to continue to mine for new business and maintain the contacts you have from previous or attempted business.
These days, there is something to be said for still being around and having your doors open.
But you also need something to tell people and not sound like a recording. That is the less diplomatic way of saying "keep it fresh". One avenue that I am hearing from some, although too few, of my clients is the comparison approach.
It is still a problem that many people are right now afraid to invest in real estate. Now is the time to ask them to compare.
I can't believe I saw an advertisement that a bank actually spent money on touting a return in the 3% range on a CD for $100,000+. I would think that bank would be to embarassed to promote that yield, which is just over half of what it once was.
Now the stock market has gone haywire, and people are afraid to invest significant sums into stocks. It is possible that not all of them will actually bounce back to previous levels, even if bought at bargain basement prices.
Yet, as we all know, real estate will always be there. People don't have to have a CD or stock, or a new car or other big ticket item, but they do need a place to live, and some place to keep their working capital for the long term.
An individual or family with $100,000+ to invest in a CD could "earn" $3,000 on a CD in today's market. Suppose they purchased a parcel of land for that same $100,000. That same land could easily be worth $110,000 a year or two from now. Hopefully more.
Just an example. But if you are sitting there reading this and thinking "I know of a parcel that will be worth even more than that in 2 years!", you should finish this column and then get your contact book open and smile and dial.
Keep in mind that you are no longer selling one property vs. another property. You should be selling buying "this" property vs. investing in a CD, the stock market, or other uncertain field.
If you are not selling, but instead have capital to invest in today's marketplace, you should keep this in mind and look around for a real estate value. Land or an investment property doesn't have to be located in your neighborhood. If your real estate professional can't find anything to fit your needs, do your own research online. Watch for foreclosure auctions, properties in lower income or rural areas which can be bought in full with the amount of available capital you have, and other such opportunities. It is possible to invest in real estate without gaining another mortgage and be able to cash out at a reasonable profit in a couple years.
Personally, I'm finding it harder and harder to believe that real estate is not being marketed as a comparison investment. Here I am pointing it out to real estate professionals every day.
Meanwhile, many kudos to a developer named Jimmy Gierczyk. His latest venture received a well-deserved write up in the Chicago Sun-Times this past week.
Gierczyk has a new luxury condo and townhome development in New Buffalo, MI, which is about 2 hours from Chicago. He was able to do a successful pre-sell on several of his units. How? By putting an Amtrak station within walking distance with a train line going to and from downtown Chicago. And I mean literally putting that train station in.
He reportedly spent over $1.5 million to have a 2nd Amtrak station built near his newest development. The article quotes an Amtrak official as saying this is the only "privately built" station he knows of. The non-stop train runs will take a little more than an hour each way.
I certainly am not suggesting that every developer build a train station nearby. But I think there is more to this story.
The new Amtrak station in New Buffalo, expected to be completed by the end of this year, will be public. It is not only for residents of his development. I'm here to tell you that if I were a real estate professional in Michigan, Indiana (which sits in between New Buffalo MI and the Chicago area) or Illinois, I would be fast and furious about going for a Michigan R E license.
I would be seeking potential buyers looking to have a country or lakefront lifestyle seeking less than 2 1/2 hours of daily commuting to downtown Chicago. (I spend most of my time in Chicago and see people riding the train for longer than that round trip every day.) What a tremendous selling point!
The thing is, other than this one brilliant developer, I'm not seeing anybody else truly selling it.
Places in Time III
4 days ago