I just finished a 2-day “Highest and Best Use” camp and had a wonderful time. One of my students told me about a old beat-up home that they owned on a big lot in a prominent area. They excitedly announced that they were selling the property to someone else for about a $350,000 profit!
This old decrepit home sat on a large enough lot for a six-plex to be developed and built. They had taken the property through the city platting process and gotten a 6-plex site and building plans approved, recorded and permitted. A builder was buying the property from them for a big profit. This was one of their very first deals.
It is amazing how much more people will pay for a planned, platted and permitted six-plex apartment building than an old house that needs some remodeling. This is one of the reasons that I rarely do carpet and paint fixer uppers. Why make $35,000 when you can make $350,000?
This student of mine is also considering selling the property for a cash out profit or a portion of seller financing so that they can have residual income for a long period of time. Tough choices? I am so excited that years ago I decided to focus on what real estate can be instead of what it is!
I co-wrote an incredible book on this very topic. It is called, “The Highest and Best Real Estate Investment.” Take a look at it. It details how to see more than just carpet and paint in the market place. Time to start looking and acting differently if we want to get different results than anyone else is getting.
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