Politicians Do It All The Time

Watch the politicians and you'll see it happen over and over again. They take a position on a subject one day only to reposition themselves the next. Why do they do this? Because it is beneficial to their campaign.If the politicians can do it for personal gain, then you should do it to gain profits. Commercial property is a business and sometimes the business needs to take a new position. Many of the vacant small commercial properties in the market place are solid buildings that are just 'positioned' improperly and are unable to take advantage of the changing demographic of the surrounding community.

As savvy real estate professionals, it is our job to take these hulking eye sores and convert their darkened hallways into paragons of profit. By understanding the reasons the building (business) failed and by researching the underlying demographic change of the community, investors can purchase what appear to be unusable buildings and turn them into unbelievably viable cash flowing entities.

Great examples are all around. For example, in one community there was an old two story bank building that was converted into a laundrymat, arcade and cafe and business is booming. The high-end building was a bank with a 1960's two story concrete facade. The area was once a community of businesses and middle to high income households.

The neighborhood demographic has changed. The white collar work force moved out and a blue collar working class replaced them. Average income for the area decreased by 30-40% and expendable income for the market plummeted. Businesses that once targeted a clientele with money to spend moved out and were replaced. The Lehman's is now a Dollar General and Big Lots, the Publix was replaced by Save Rite. Every aspect of the community has changed.
The old bank building was out of place, the bank didn't service the new demographic so they folded their shop and moved on. The building was empty for years until one enterprising entrepreneur spotted opportunity. He bought the building for a song. After years of low offers, the bank needed to liquidate the unwieldy and deteriorating asset so they let it go for pennies on the dollar.

The new owner jumped into action. Remember this building was a stodgy old bank property. The windows were slits in the concrete and tinted with dark film. The interior was all dark stained wood and dimly lit. Everything about the property was wrong for this market.
The new owners transformed the interior space. They removed the film on the windows, added bright florescent lighting and painted everything white. The interior is bright and welcoming and the building is becoming a center of the community.

There are streams of income everywhere. There are coin operated washing machines and coin operated dryers. There is an arcade with the most popular video games, pool tables and fooze ball tables. There is a cafe, and CD exchange, an ATM and, because the community has a large ethnic population now, there is a money exchange where currencies can be converted and even sent back home. There are coin and card operated pay phones and a phone card vending machine. And that's just the first floor!

When the second floor conversion is finished there will be offices. What kind and who will rent? How about an immigration attorney, a bi-lingual accountant, a language translator and even a school for teaching english as a second language.

The once desolate and darkened hallways of this seemingly out of place and out time building have been made timeless by being repositioned in the market place. So during this political season take a page out of the politicians handbook and see what new position you can take with your real estate.

Michael Gross is the President of Dividend America Mortgage and has been in real estate for over 20 years. He has been a builder, a Realtor, an appraiser, and currently he is a lender and an active real estate investor. He uses all of his experience and knowledge to show individuals how to properly use a mortgage as a tool to help create greater wealth through real estate investing. For more information on residential and small commercial loans please call him at 770-350-7373 or via email at mgross@dividendamerica.com.