How to Make Money with Planned Developments Secret
|People love me, but developers hate me because I intercept their deals and make money off them. I don't care if I'm labeled a capitalist-I'm out to make money.|
I like to stay in the loop and know exactly who is building what and where. When I find out from my sources that the city or a developer is planning a development, I make it my business to gather all the facts so I can make some money on the deal.
There are several ways you can make money on planned development deals. Here is how I did it on a planned $500 million dollar development in Tampa, Florida.
In 2003, I purchased a 600 square foot, dilapidated, shotgun home from another local investor. He had it under contract for $20,000 and assigned it to me for a $5,000 assignment fee.
I cleaned the inside of the house up and immediately stuck a For Sale by Owner sign in front of it. I was asking $40,000, but I was happy accepting $35,000.
Several days later, I received a phone call from the President of the Neighborhood Association, Grace. Grace lived down the street with her husband. She was a nice lady and my wife and I liked her. Grace asked if I owned the property with the "for sale" sign in front of it. I told her I did. Grace was kind enough to share with me that she knew a developer that might be interested in buying the house from me.
"Developer?" I thought.
Grace informed me that she would give the developer my phone number and tell him to call me.
Why would a developer want to buy a 600 square foot, shot gun house?
What is a Planned Development
That night I decided to do some research on the Property Appraisers web site. What I noticed was that someone who operated as a Land Trust was buying several houses and land surrounding the subject property that I owned. The best part about it was that my house was one of the last homes on the block that they did not own. Now, this was starting to make sense to me. I realized the developer didn't want the house, he wanted the land.
Two days later I received a phone call from the developer. His name was Jake. Jake asked if he could schedule an appointment with me. We decided to meet the next day.
The next day Jake and I were joined by my father-in-law at my office to discuss the sale of the house. My father-in-law had put up 50% of the money to buy the house so we were partners.
Immediately, Jake asked me what I was trying to sell the house for? I thought about it a minute and replied by telling him $100,000. I know you guys are thinking, weren't you asking $40,000? Yes, but that was before I knew a developer wanted to buy the house.
Jake and I negotiated for better than 30 minutes before we both came to an agreement. We settled on a sales price of $75,000. My father-in-law and I made a $50,000 profit. He was ecstatic. Working as a physical education instructor for 30 years, he had never made that much money that fast.
This deal turned out to be a bit of luck. I can't claim that I knew we would do so well, however, it was certainly a learning experience that helped me set up similar deals with city officials and developers of planned developments in the future.
Today, I take full advantage of profiting from planned developments. Whenever I find out a major development is being planned, I devise a plan of action. My action plan is to try to option to buy, contract to assign, or buy anything in or around the development area.
I can get my hands on anything in the area that is in the direct path of the planned development so I can resell it to the city or developers for a maximum profit.
Sources for Discovering Planned Developments
How do you find out where the planned developments are taking place? Following is a list some great sources for you to find out where the action is HOT in your city:
1) Chamber of Commerce: Becoming a member of your local Chamber of Commerce can be a great way to network with other members to find out where planned development projects are being proposed. The Chamber offers a host of services for local professionals and is the hub of economic development opportunities. The Chamber knows about proposed projects before the general public does. I have been very successful at gathering key information while attending Chamber of Commerce meetings. This information has allowed me to take advantage of planned developments in parts of the city I had no clue were being developed. I could option properties and wait for developers to knock on my door.
2) Land Trust: Most developers use Land Trusts to remain anonymous. They don't want people to know that they are buying homes in the area. However, like the deal I just shared with you, it's not hard to see the signs. When you notice large plots of land and houses owned by a Land Trust, it is obvious that the developer is Land Assembling for a planned development. In addition, some developers will use different Land Trusts to try to fool you. Normally, they are all controlled by one developer.
3) Reports in Newspapers: When the city or developers are planning a development you will start to read articles in the newspaper about it.
4) Reports on the News: The same as newspaper. When the city is planning a planned development you will notice news reporters begin to cover the story.
5) Talk Around the Investor Community: Investors always know where the hot spots are to invest and where the next big planned development is going to be. The problem is most investors may not tell you where it is because they don't want you to become their competition.
6) Realtors Talk: Just like investor's talk about the next big planned development and where it is going to be, so do realtors. The good thing about realtors they are more willing to fill you in on things, especially if they think you will give them some future business.
7) Building Department: The local building department always knows of planned developments. The department issues building permits. Most of the employees at the building department are friendly and will provide you with any information you need.
8) Coffee Shop Talk: Whenever there is a big plan to build a mall, a new sub division, a Wal-Mart store, it is always great coffee shop conversation. People like to be "In the Know!" The more they know the more powerful they feel. One day just spark a conversation with someone at the coffee shop and be amazed at how much information you can learn talking with people.
9) Neighborhood Association Meetings: This is a great way to find out what is going on in different communities. When you get a lead about a planned development in an area find out when their next association meeting is and attend. If there is a planned development for the area the Neighborhood Association will certainly discuss it. They always stay abreast of what is going on in their community. Just sit back and gather intelligence. You will be happy you attended!
10) Eminent Domain Complaints: Whenever there is uproar concerning an eminent domain issue there is a planned development somewhere in the works. Homeowners don't like being forced out of their homes. They will complain to whoever will listen, newspaper and television reporters, the city council, the County Commissioner, their State Representative, the mayor and anybody else who will hear their concerns. Make sure you find out where the planned eminent domain is being imposed. What is the city or developers trying to develop? Then, how can you get a piece of the action by investing in the area?
11) Some other great sources to find out where development is planned are the City Council and County Commission meetings.
As a matter of fact, just recently I was watching the city council meetings on television and overheard a developer requesting a variance for a proposed condominium project in an area of town with which I am familiar.
The next dayI went out and secured two options to buy contracts. If the developer's variance is successful he will have to pay me for my contracts.
|Kenny Rushing is a remarkable tale of a life turned around. A resident of Tampa, Florida who is an evolving account of transformation that is simply extraordinary. |
Kenny is best known for the moving story of his humble and troubled beginnings, and his phenomenal success as a real estate investor - in spite of the seemingly insurmountable odds he faced. He is a phenomenally successful real estate mogul, civic leader and devoted philanthropist. His company, Rehabbers Superstore, Inc., now grosses millions of dollars per year through real estate transactions and investments.
Kenny Rushing is quickly becoming known for the life transforming impact his uncommon wisdom is having on the lives of those who have benefited from his knowledge, wisdom, training and coaching. His goal over the next five years is to teach 1 million people how to achieve financial independence and flip their life through real estate investing. Kenny Rushing is a living testament that: If KEN Can Do It - So KEN You!
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