The number of solutions are traditionally thought to correspond with the number of problems that exist within a certain property. But really, the number of solutions you can solve for a number of perceived problems is theoretically infinite, so long as you are providing further utility/comfort/convenience or perceived value for the prospective or existing vendor/tenant.
ie. A developer may have solved an average of 5 major frustrations of tenants per property, by providing a new dwelling with state of the art building materials and furniture etc. He may then compound his profit (from these 5 low-cost solutions, relative to market price) by simply selling an enormous volume of these dwellings for well over the intrinsic value of the land and materials used. Ie. he sells 25 of them, and thus, creates 125 solutions out of an original blueprint of only solving 5 problems. He could further optimize and leverage off these five solutions by analyzing which of his 5 solutions created the greatest perceived benefit for not only vendors, but also the tenants who don’t have any relationship to the developer directly, but still influence the vendor’s buying decision and therefore, the development profit at the project outset.
I think Steve’s idea of capitalizing on the market price inferiority of 2 bedroom dwellings as opposed to the sale price superiority of 3 bedroom dwellings and then solving this problem in 2 bedroom properties by putting a cheap wall between two large living spaces is brilliant, and illustrates that solutions can be created even if a problem does not necessarily exist at face-value.
If anybody knows of some great examples like Steve’s aforementioned one, please share with us. And also for the experienced property investors/developers…..what have been the greatest vendor/tenant recurring frustrations you have ever encountered?
Thanks in advance
Yidn
Yidn
Love your style of writing, its very philosophical.
I dont’t have any brilliant answers for you, we have created solutions through, developments,renovations (old into new), adding carports, adding extra bedroom via wall (as in Steves case), and offering quick cash settlements to people wanting to sell NOW without waiting 3 months for an agent to sell their property.
Perhaps you could provide some examples for us that you have been involved in?
Cheers
We buy properties in Adelaide. Immediate Cash Settlements, No Real Estate Agents, No Fees.
[email protected]
phone 0412 437 582Thanks DR X for your comments and kind words,
If you’ve read Steve’s latest newsletter, you will see his response to one of the forum posts regarding changing the perception of the exterior walls for low cost perceived benefit. He refers to concrete *sledging* (I think he called it), whereby they plaster a layer of wet concrete over a an entirely brick structured property. He is of the belief this is more cost-effective and profitable than changing the exterior of a generally more *charming* weatherboard dwelling. I’m interested while on this topic of renovations, whether you have undertaken any of these types of exterior projects and how hard/easy it was to implement, as well as it’s cashflow performance.
thanks again!
Yidn
Hi Yidin,
We have never worked with weatherboard houses, I like the more up market ones, but we have taken red brick houses and rendered the front, that seems to work well especially if there are other modern style or newer houses in the area.I’m surprised no one else has answered to your post, I would have thought that many people on this forum do many creative things to make money in real estate!!!!
We buy properties in Adelaide. Immediate Cash Settlements, No Real Estate Agents, No Fees.
[email protected]
phone 0412 437 582Yidin..
Have you checked out the RenoKings web-site?
I’m sure you’ll enjoy it if you like this type of thinking…
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator
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