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The Next Level Upwards
| | Monday, January 26, 2004 @ 08:00 AM EST
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Contributed by: Lucius Foster
Lucius Foster Properties
Read more archived articles about U Make The Call
By this time you have read a lot of postings. You have bought a few books, some of which are applicable to modern times and some are purely historical in context and some, yes some should have been printed in Early Medieval English with footnotes in Latin.
I make the assumption that you have gone out and rung a few doorbells, made a few contacts and perhaps a purchase or two. A lease option, or layoff deal which grinds a small
return and the hope of a high payoff some time in the future if, big if, the market holds.
You may have attended a foreclosure sale and watched the bidding as they approach the top of the high market prices generated by todays lack of sufficient starts of new house construction in the lower price levels.
You are to coin a phrase "Checked Out." The time has come to move on to the next level. An area of increased profit and decreased activity.
Enough of the single little house or duplex with the whining tenants and the phone calls to fix a dripy faucet or quell the hords of cockroaches responding to the smell of grease and the promise of warmth in electric outlets.
Enough of hearing that the rents cannot be paid as the wage owner is in jail for beating up his ex wife or stopped in a bar on the way home and in a moment of exhuberance blew the paycheck.
Consider this: You are going down the street and you notice to your shock and dismay that the gas station on the corner has just gone out of business. Also the little barber shop next door is closed. Next to which is a vacant lot where there used to be a flower shop that burnt down a year or so ago.
You are looking at an assemblage. You are going to option those properties one by one and put them all together and then either sell or participate in the erection of a Minnie Mall, a two story or three story mixed use commercial building, whatever.
You start with the Gas station, you check to see who is the owner, is there a lease, is the lease assignable, should you offer to buy, or should you merely take over an old lease. You offer to buy and after the bargaining back and forth you convert into an option for six months. If possible you reduce this to a nice document that can be notarized and recorded. You open an escrow and you put the first property in.
Now on to the next. I would skip the next property in line and go for the end one. They are the owners of a vacant lot which does not produce income. You negotiate with them, turn the deal into an option and then throw that into the same escrow of sale.
Having surrounded the barber shop you start once again to negotiate on that. Remember when all the properties are put together they are usualy worth at least 25% more and that is a bottom figure.
Of course this is a going business and part of your pitch may be that you have a much better location for the barber shop indeed you might even offer to pay a few months rent in the new selected shop. Well why not. If you are licensed get a commission on that lease. Or if the timing is right you might offer to build a new barber shop with, are you ready, living quarters above. Oh my god barbers heaven. Of course if you are really with it you negotiate and slap on a beauty shop. You think they do not go together? They do, Oh god what I have gone thru having women cut what is left of my hair. I overpay for a good barber anyday. Besides all barbers are great intelligence operators where else do you hear all the neighborhood goodies which can be converted into future Negotiations.
Ok, ok, that is an assemblage. Very profitable to the person who goes out and hustles and puts the dirt together. You get to participate, or you can if you sing loud enough stay as prime mover and run the show. Very profitable and creative and lots of fun.
Syndication: Here comes another fun activity which does not require a knock on the door. I am sure all of you have a Doctor that you see on occasion, or an Oculist or a Cleaner. Shall I go on. Form them into a group. Tell them it is time they started to spread their wealth a little and the first thing is to invest in the furtherence of their own community. So you start with their capital and most important their credit and banking connections and you buy property.
If you are in a growing area and have a busy major street, why not option a hunk of land on a nice swing corner and then contact the Oil Company of your choice and pitch them into giving you a nice long term lease on the land. Your investors will love you.
Or you might canvas the area and see what new kinds of business are necessary to expand your town. You select the properties and once again option or you might indeed participate in the erection of the structure that will house the new doctor, or clinic. Whatever.
I am sure you see what I am saying. This is the next level and yes having funned around with this for a few years, you will then go onto another higher space.. For now concentrate on this dimension.You need the experience.
OK Creative Investors, post to this article, come up with concepts and by posting you will crystalize your thinking and perhaps stir yourself and other viewers to action.
This is written as a "sparker" come on now outdo me go crazy. Original ideas. Lets go thru this level and up above there is another. Here is where you learn to play Trumps game or Snyder if you are in California. This is the first entrance level. Once you master this one, I will show you the next one. Oops sorry the assembled Gurus, Teachers, Advanced Ones they will then take you to an even higher level.
Upwards and Onwards. Per Ardua. or at least an attractive bit player.
Lucius
Word Cloud:
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