Real Value Investing in Real Estate

Dated: June 15 2020

Views: 221

 Real Value Investing in Real Estate



Years ago my  brother Bill and I owned a beach house on Fort Myers Beach on Third Street, just down from Moss Marine. Buying it is a story in itself.  At that time Bill and I lived next door to each other on Philips Creek  - we had purchased 9 acres off route 41 and  with two other partners developed it into 12 building lots and we each built houses on single lots that we kept from the development.


Often on Sunday mornings Bill and I would drive around and look at property. One Sunday we decided to go look for a boat slip to buy to keep our 23 foot Mako fishing and diving boat. We were touring around boat slips off of San Carlos Boulevard when I spied a slip with a for sale sign on it.


Yes, this was already in the time of cell phones and by 10 AM it was a decent hour to call Marty Wallerstein, the agent.   Marty informed me that the slip was actually part of a home sale across the street, but why not buy a house on Fort Myers Beach that came with a deep slip and the house could be rented? He had just such a house for us.


Long story cut short, Bill and I had that house under contract within a few days – it was a triplex formally owned by Paul Rosen, developer of Marina Village. We wound up setting up a partnership with two friends from Scotland to buy this house and set up a usage sharing plan and enjoyed that house for years until we sold it  about 18 years ago.


While owning that home I was accumulating rental properties on a regular basis. Knowing this, one of the local Realtors called me one day to talk to me about buying the home across the canal from this one.


Bill and I had paid $165,000 for the Third Street Triplex and we were receiving about $21,000 in rents. This agent pointed to the home across the canal and told me that the owner was asking $300,000 for the home. 


“What are the rents?” I queried.


Just under  $16,000, he replied.


“Well then what makes you think its worth $300,000?”


“It has a view of the beach and is on the water,” he replied.


Need less to say I never purchased that property.  What the agent failed to realize was that the value of the “view” and “the water” were not reflected in the rents. I was not going to pay for them


But let’s talk about asset investing versus income investing. Because, in some cases, we are not investing for o income, but for appreciation.

That full article is here.


Want to see my 25 real estate investing rules?  Go here


Thinking of buying a new construction home for a rental? See my analysis here.

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Gregg Fous

Real estate has been my passion since I took my first Al Lowery class on real estate investing in the 1970’s. I vowed during that class that I would buy one property a year. Over the next five ....

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