THREAD: HOW TO FIND AN "EDGE" WHILE KEEPING YOUR BUSINESS MODEL SIMPLE
A lot of people watch Billions or Suits and get conned into thinking they need to come up with some incredibly clever business strategy to succeed
Couldn't be farther from the truth
My mentor started off...
A lot of people watch Billions or Suits and get conned into thinking they need to come up with some incredibly clever business strategy to succeed
Couldn't be farther from the truth
My mentor started off...
investing in office buildings. Purely by happenstance he ended up buying a medical office building
During this acquisition and subsequent asset management process, he realized there was an under-served market
During this acquisition and subsequent asset management process, he realized there was an under-served market
Many doctors were dissatisfied with their current real estate situation. They were tired of landlords and wanted to own their buildings.
However, they were severely capital-constrained (many of them still with medical school debt) and knew next to nothing about real estate
However, they were severely capital-constrained (many of them still with medical school debt) and knew next to nothing about real estate
Mentor proposed that they form a joint venture and buy the buildings together. The doc would own a large portion of the building and be the LPs while he would own a small portion and be the GP. They would stay as tenants in the building
A simple solution that benefited everyone
A simple solution that benefited everyone
The doctors got to be their own landlords and reap the reward of any potential appreciation
My mentor got to acquire quality medical buildings for a decent basis (lot of negotiating leverage if the current tenant is buying with you) with high caliber tenants who will never leave
My mentor got to acquire quality medical buildings for a decent basis (lot of negotiating leverage if the current tenant is buying with you) with high caliber tenants who will never leave
Does this strategy allow you to niche down? Absolutely
Is this strategy complex? Not at all
Does this give you an "edge" over the market that will lead to outsized returns? You'd better believe it (aside from the good acquisition basis, you know building vacancy will be 0%)
Is this strategy complex? Not at all
Does this give you an "edge" over the market that will lead to outsized returns? You'd better believe it (aside from the good acquisition basis, you know building vacancy will be 0%)
So, in addition to the obvious, there are a few takeaways I want you to walk away with
As strange as it sounds, typically you don't find niches. Niches find you
A lot of "edges" in RE aren't even "RE" related. They have more to do with creative deal structure and people skills
As strange as it sounds, typically you don't find niches. Niches find you
A lot of "edges" in RE aren't even "RE" related. They have more to do with creative deal structure and people skills
