Wednesday, July 30, 2014

Property business

     Free daily tips, information and advice for people in small business
     from personal experience founding, growing small businesses--been there, done that.

     Real estate can be a business. I'm not talking about selling houses as an agent. And I'm not talking fixer-uppers or flipping--these are different types of property businesses.

     Personal example: As a sideline to my main business, I set up a property business with a partner. First we set some criteria--it was a business plan of sorts. We concentrated on existing rentals--two and three family apartments. We looked for properties with cash flows that could carry the mortgage and a maintenance fund, and we were counting on appreciation long term. We looked for buildings (1) in a self-contained neighborhood that (2) had good access to city jobs with (3) well-constructed apartments that (4) were fully rented. When our criteria were met, we bought the place. No bungling together--each building was managed as a unit unto itself. In other words, we did not pyramid the whole--that's asking for trouble. 

      Managing apartment rentals is easy if you go about it in a no-nonsense way. All tenants had my personal phone number and they were told not to hesitate calling me day or night, seven days a week with any problem. I maintained a stable of tradespeople--electricians, plumbers, carpenters--who would come any time I called them, including Sundays and holidays. This rarely happened, but they knew they would be paid immediately and could expect a cash bonus for Sunday, holiday or overnight work. 

     You can consider real estate as a sideline, or you can make it your primary business.

     Example: I worked with a man who concentrated on commercial real estate. He limited his targets to small, older stores and buildings in suburban towns. The storefronts needed attention, but the town showed unmistakable signs of growth. He checked carefully before buying a property--town councils, business organizations, regulatory people--to understand impacts going forward. When he bought a property, he renovated it and upgraded it. This had the effect of working with towns to help them improve the shopping district. He attributed his success to working closely with local authorities. 

     A property business offers a good business opportunity. These two examples show what can be done with residential rentals and commercial rentals. 

     People in small business get the benefit of my personal experience covering a lifetime in small business. These tips and advice are free, short, hard-hitting, and they come to you daily. I'm not selling anything.

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