"Problems are only opportunities with thorns on them-"Hugh Miller
Hugh Miller was a very wise person.
Do you agree that so called "problems" actually turn out for the best?
Have you ever experienced a time in your life or know if anyone in your world where what seemed like a huge problem, were really a blessing of opportunity in disguise?
Real estate investors live by this philosophy. What other's see as problems, they see as opportunities. Opportunities to grow. To beat the competition. To have more success. To make more money. To simply be better than you were. Here is a case study of, let's call them: Mr. Downsville and Mr. Smarts
Mr. Downsville, who invested in real estate, owned a multifamily building where he made himself a very wealthy man. After owning the property for more than 10 years, he began to neglect it. Soon, tenants began paying late, and some not at all. The property was becoming worn down, as Mr. Downsville never bothered to refurbish much of the property and its landscape. Then, the worst happened, the local economy tanked and more than half the tenants lost their jobs. Half the tenants worked for one company, and once that company went bankrupt, its employees, who were also Mr. Downsville's tenants began to suffer financially. 6 months later, the property went into foreclosure, and Mr. Downsville lost his investment property.
3 months later, Mr. Smarts gets a phone call. It's his broker. Mr. Downsville's real estate property is for sale and is being auctioned off by the bank. Mr. Smarts learns of the story behind the foreclosure. He learns about the property being neglected. Non paying tenants. Loss of jobs near the area. After doing research, Mr. Smarts realizes he found a goldmine. This is what he found in this "problem" property:
- Rents are 30-50% below market, which means an opportunity to raise rents
- Tenants were of low quality (bad credit, no job, criminal records)
- The local economy is about to be added with 1,000 more jobs in the next 4 months, as a new company will arrive in the area
- The property is being auctioned with easy financing and low downpayment, to motivate a fast sale
Mr. Smarts eventually invested in the property and made a lot of money. He did it because what was once seen as a problem, Mr. Smarts saw it as an opportunity. He saw what others cannot.
Look around you. Look at the properties that are for sale. What problems do you see, that you can turn around? What opportunities lie ahead?
“Opportunity is missed by most people because it is dressed in overalls and looks like work.” - Thomas Edison