Thursday, April 16, 2009

Finding the real estate resources...........

I was having one of those “If only I had…..” moments this morning when catching up on real estate related news. For as much time as I spend feeling like a preacher when talking to current and potential clients about ways to make the current real estate market advantegous, as well as friends and family, I could have been a contender myself.

Looks like it is time to circle back to an idea presented to me just over 20 years ago that didn’t materialize at the time. Maybe this will get you to think about this as well. This will not sound like a real estate marketing idea but stick with me.

Years ago when I had more time to devote to it, I was in a fantasy sports league with a group of 11 other guys aged between 25 and 40. That was back when I would constantly have to explain what a fantasy league is and does. About half of the group had gotten together for lunch one day when one of the guys said he heard about some land nearby that was about to be put up for sale. He went on to wonder to the group about what could happen if 10 of us would each put up $5,000. That would give us $50,000 as a down payment on a million dollar commercial property.

This happened to be around the time I was starting to get involved with a client looking to market a technology feature to real estate offices. (This turned out to be the springboard for what I have been doing ever since!) I thought that was an interesting idea, especially since someone I knew was making his living from managing family owned commercial properties and he had plenty of time to travel and enjoy his life.

As it goes with a group of casual acquaintances, the “group of friends” idea didn’t make it past a first meeting. Even though I have thought about it from time to time, it is a challenge to find enough people trustworthy enough to do this, let alone enough that would have a few thousand dollars to do this.

Personally, one of my investments is in a real estate syndication, but I don’t have any hands-on involvement even though I have seen a small profit in the past couple years. But now I’m kicking myself for not pursuing that sort of thing over 20 years ago, and then looking to move up the ladder. That’s how success in real estate starts. Do something like that and then buy out others in the group, or use the partnership success as a springboard.

Now I fast forward to today. This is totally pie-in-the-sky, but the story from Boston about Normandy Real Estate Partners buying the John Hancock Tower in Boston for $660.6 million dollars. Not that I would have been in a partnership with that much in capital. It’s more what they accomplished than the amount.

Upon further review, it turns out that the John Hancock Tower was about to go into foreclosure, and the property was being auctioned to attempt to prevent that foreclosure. Since much of my time now is being spent looking for single family homes and investment properties to go to auction, it shows the tremendous opportunities that real estate auctions are bringing.

In case you weren’t aware (and I wouldn’t expect anyone to know this off hand!), the Hancock Tower in Boston was sold to the ownership group that avoided foreclosure as recently as 2006. Less than 3 years ago the (now) previous owners bought it. For $1.3 billion dollars. To translate, this real estate partnership bought one of the most significant properties in a major city and “saved” more than a half-billion dollars.

To put it mildly, there’s no way I can kick myself for missing out on that deal. It’s not like I could have written a check and bid a few hundred thousand more for it.

The point is that it got me to think that there must be some lesser scale Hancock Towers out there, if only I and a group of others could be ready when they are found. Those of you with some money to invest might want to think about others you know in the same position and the power of group resources. And those of you in the real estate community might want to think creatively as well. What’s that saying? It’s not what you know, it is WHO you know.”

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