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In a 3 minute phone call $290K went up in smoke. That's $1,611/second
With 3/4s of my likely profit gone, how'd I still make money on a real estate deal involving several assets?
Time for a thr...no just kidding, read on below about The Lion, the House & the Cell Tower.
With 3/4s of my likely profit gone, how'd I still make money on a real estate deal involving several assets?
Time for a thr...no just kidding, read on below about The Lion, the House & the Cell Tower.
In the stock market it's common to hear deals valued based on the sum of their parts. Some of these work out. Many don't. The problem usually lies in principal agent conflicts. The market wants disparate assets sold or spun off, the managers don't want to give up their day jobs.
In real estate, sum of the parts deals intrigue me because they're opaque & therefore priced inefficiently. In 2016 I did a deal in San Diego County that I call the “Safari Park House” a ~3800 square foot home overlooking the Safari Park (a sister park to the San Diego zoo).
With panoramic views of the San Pasqual Valley there was was an original owner seller. While there was money in renovating & reselling the house, that wasn't what intrigued me. The house had two cell towers & the lessees paid a pretty penny to the owner every year.
If the Cell Tower lease streams could be spun off this deal could be a home run. Under contract at $1.1M we found a public co to double close, buying the lease streams for $700K. The week of the close they called & said they only wanted one of the towers & would pay $410K for it.
Having already committed to the deal, we closed. For more details on how we grinded our way to a six figure pay day check out:
https://inefficientpursuits.com/2020/12/15/real-estate-sum-of-the-parts-deals-not-your-typical-value-traps/
https://inefficientpursuits.com/2020/12/15/real-estate-sum-of-the-parts-deals-not-your-typical-value-traps/
