This niche is VERY inviting …

As we often say, real estate is NOT an asset class.  There are MANY different niches you can invest in to earn big profits … both capital gains and cash flow.

And we’ve been watching an exciting niche which is starting to attract the attention of alert investors …

“Value-add investors are finding this sector ripe with opportunity, offering strong returns and having very little competition.”

           –    National Real Estate Investor, 5/6/19

Sound inviting?  It is!

It’s rehabbing resort properties.

If you’re a fan of the long-running TV show Hotel Impossible featuring Anthony Melchiorri, you know there are a LOT of hotels out there … and many aren’t run very well.

In fact, some fail and are sitting empty and dilapidated … waiting to be resurrected by an enterprising real estate entrepreneur.

So there’s a LOT of value-add opportunity in these often potentially beautiful properties.

And the opportunity isn’t limited to a particular geography … these opportunities are available in a variety of markets.

In fact, we recently enjoyed interviewing an experienced resort rehabber in New Jersey (yes, there’s even resort opportunity in New Jersey!)

We also got the inside scoop on a fascinating resort rehab project in Orlando, Florida.

The message is clear … there’s big opportunity in resort property … and it’s not just money.

Think about it …

Most investors don’t get excited about spending the night or a romantic weekend in their Section 8 rental home, C-class apartment, or mobile home park.

There’s nothing wrong with any of those.  They’re all great for cash flow.  But when you can get cash flow PLUS lifestyle benefits too?  That’s double prizes.

Imagine taking a tax-deductible trip to check in on your beautiful resort property … walking a lush vineyard or relaxing on the beach … and enjoying a fine meal while watching a gorgeous sunset.

Of course, before you get to enjoy all the amenities … there’s work to be done.

And fixing up an entire resort … well, that’s a heavy lift even for the most seasoned house-flipper.

But who says YOU need to do all the work?  Or ANY of it?

What if there’s a way for you to get in on the action without putting on your work boots and safety glasses?

There is.

One way is to let someone else “fatten the cow” … then you buy in to “milk it” for cash flow over the long-haul.  Listen to this episode to learn more about this approach.

If you’re accredited, then there’s a whole world of investment opportunities available to you … including investing passively into an experienced resort rehabber’s project.

Of course, if you’re super-ambitious and industrious … you can become an active resort-property re-habber.  Because it’s capital intensive, it’s an ideal activity to syndicate.

If you choose the active route … here are some things to think about.

One way to learn the business is to go to work or volunteer with an active resort re-habber.

But before you go that far, it’s probably smart to start with just talking to some folks in the business to see if it’s the right niche for you.

Fortunately, we’ll have an active resort property rehabber … along with a whole bunch of other really interesting niche investors … at our next Secrets of Successful Syndication seminar.  So if this all sounds interesting, make plans to join us.

But whether you choose active, passive, or syndication … take a look at the opportunities for profit and lifestyle in the resort property investing niche.

Resort properties are a great way to earn rental income from affluent people who would probably never rent their home from you.

Until next time … good investing!

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10/21/12: Property Possible – Repositioning Assets for Better Profits

Rehabbing is all the rage right now. The opportunity to snap up distressed properties, pretty them up and sell them for a quick profit has probably never been better, and lots of newbies and Mom & Pop investors have jumped on the bandwagon.  Heck, the opportunity is so good in single family homes that even big Wall Street private equity firms are gobbling up inventory in some of the markets most devastated by the financial crisis.

Now rapid fire rehabbing is hardly “passive investing”.  There’s certainly nothing “passive” about it – and one could argue that true “investing” is making the money do the work, not you.  So we contend that rehabbing is more of a business than an investment strategy.  But that’s beside the point.

If you decide to be in the business of forcing value into your properties, whatever property type you’re in to, then you’ll like this session because we have a couple of very experienced “turnaround” specialists on the microphones.

In the house for this episode of The Real Estate Guys™ radio show:

  • Possibly the finest host, Robert Helms
  • Your impossible co-host, Russell Gray
  • Hotel Impossible star and hotel turnaround expert, Anthony Melchiorri
  • General manager of the 21c Museum Hotels, Craig Greenberg

No matter what kind of income property you own, success is all about occupancy.  But if you think it’s hard work to turn over a tenancy every six months, try doing it every night!  That’s the challenge every hotel operator faces.

Now even if you aren’t in the hotel business and never plan to be, there are great lessons to be learned from those who are.  Because at the end of the day, when you pretty up a property, you do it to please another person: the home buyer or the tenant.  No one knows more about the importance of pleasing the customer than people in hospitality.

So lesson #1 is to be sure you prep the property properly to optimize it’s appeal to your target customer.  Of course, this pre-supposes that you are clear on who your target customer is, what they want and what they’re willing to pay for it.

If you’ve ever watched an episode of Hotel Impossible, you know that Anthony Melchiorri helps owners see their properties through the eyes of the customers.  What a powerful, but sadly overlooked concept!  Property owners often create a property that pleases them. Oops. They aren’t the customer!

You’ve probably also noticed that Anthony often discovers what the customer wants by talking to the staff.  Why?  Because when the customer expresses their need or dissatisfaction, the staff are the first ones to know.  So a wise owner listens carefully to the feedback from the staff to respond quickly and accurately to the needs and wants of the customer.

Do these concepts apply to other kinds of real estate investing?  Of course they do.

If you’re a fix and flipper, your real estate broker is a great source of information about what the market wants and what they’re willing to pay.  Doesn’t it make sense to listen to your broker?  Say yes because that’s the answer.  Yet, so many flippers go to the market with their own need, instead of focusing on the needs of the market.

News flash:  the market couldn’t care less about your need.  If you want to make money, you need to give the market what it wants.

Whether you rent our single family homes, apartments or office space, your property manager and leasing agents will tell you what the market wants.  Once again, it pays to listen.

“Well, that’s just common sense,” you might say.  Yes it is.  But have you ever known someone to buy a property in an area they don’t know and then go find a property manager to manage it?  It happens all the time.  Wouldn’t it be smarter to have the property manager tell you what kind of property, location, amenities, etc. is most in demand, and then go buy that?

You get the idea.  There’s a lot of real estate wisdom to be gleaned from the hospitality business.

And while our second guest isn’t as famous as Anthony, his story is every bit as enlightening.  Craig Greenberg takes old, dilapidated “historic” properties and adds a unique attraction to bring people and their money into the property.  It’s a fascinating study in creativity and one you can learn from.

So listen in as we talk to Anthony Melchiorri and Craig Greenberg and glean valuable lessons from their experiences in finding ways to extract more profit from problem properties.

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9/30/12: Hotel Impossible or Can You Make Money in Lodging and Hospitality

Lodging and hospitality is a business that involves providing real estate and an array of services to business and leisure travelers.   That’s pretty straight forward.

As real estate investors, any time there’s real estate and cash flow, we’re interested.  And when you do the math on nightly rentals, you can see there’s some real opportunity in the hospitality sector.  But it’s a very different game than just renting out single family homes.

Like any business sector, there are trade groups, conferences, industry publications and gurus who cater to hotel investors, owners and operators.  One of our favorite resources is Lodging and Hospitality magazine and their annual Lifestyle Boutique Hotel Development Conference.

So as we’re making our plans to head to Miami Beach (like we really needed an excuse for THAT), we thought it would be fun to dedicate an episode to talking about what’s happening in hospitality.

Checking in and enjoying the lifestyle of reality radio for this episode of The Real Estate Guys™:

  • Your 5 star host, Robert Helms
  • The no-tell co-host, Russell Gray
  • Special guest, Managing Editor for Lodging Hospitality magazine, Eric Stoessel

One of the many things we love about real estate is there are LOTS of ways to make money.  One of the sexier ways is hospitality.  Hotels, bed and breakfast inns, and resorts are among a few of the property types in this sector.  And while there are certainly crappy properties, the odds are you’d probably rather spend the night in your hotel than your Section 8 rental, right?

What’s really interesting about lodging and hospitality is the premium guests pay for short term rental use (nightly or weekly versus month to month).  So even after you factor in all the expenses, the numbers can be pretty enticing.

Just as exciting are all of the ancillary income opportunities.  Not only can you make money renting the room, but you can earn additional profits with conference space, restaurants, spas, vending, referral fees to local merchants and attractions, internet, pay-per-view TV, dry cleaning – and the list goes on and on and on.

Of course, turning rooms over nightly and providing all kinds of additional services requires a lot more work.  Then again, you can sub-contact all the work and simply take a piece of the action.  Last time we looked, a little bit of something with no work can be very attractive.  And with a diverse income stream, you have many options to increase profitability and adjust to economic cycles.

But before you run off and trade all your little green houses in for a big red hotel, it’s a good idea to know a little bit about the business.  If you’ve ever watched an episode of Hotel Impossible with Anthony Melchiorri, you know the hotel business can devour an amateur.

The good news is that there are resources and experts available to help you learn the business, whether you intend to operate a boutique hotel or simply invest in a property and rent it out to an operator.  So if you’re curious about the opportunities in the lodging and hospitality business, listen in on our conversation with Eric Stoessel.  This is a sector he’s been focused on for quite some time.

Even if you don’t think you’d ever want to own a hotel property, you’d still be well advised to monitor the hospitality sector.  The health and direction of hospitality can often be an indicator of the general health and direction of the economy.  And in case you’re wondering how the hotel business is doing in this economy, Eric tells us that leisure travel is UP.

So if you’re REALLY interested in this sector, you’ll want to join us in Miami Beach when we attend the Lifestyle Boutique Hotel Development Conference.  All of the industry leaders will be there.  In just a couple of days, you’ll gather up all kinds of resources, contacts and information about lodging and hospitality.  So when your portfolio is ready for that big red hotel, you’ll be prepared for success.

Did we mention that Hotel Impossible star Anthony Melchiorri will be the keynote speaker?  Come check him out!

Meanwhile, enjoy our interview with Eric Stoessel.  Hope to see you in Miami Beach!

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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed. Visit our Feedback page and tell us what you think!