Sunday, November 18, 2007

Why we get in this business

GW inaugurated its new president last week, and I attended or was involved with a number of events surrounding the festivities. The highlight for me was a lunch, where the new President, the President of the Alumni Association, and a Senator who is an alum spoke. It wasn't the speeches, however, that made the lunch.

The lunch was rather made by the two undergraduates who sat at my table--one was a freshman, and one a junior. They were engaged, curious and highly intelligent, and just lots of fun to talk with. We spoke largely about potential opportunities for real estate development in China and India. The conversation centered around the fact that the challenges facing developers in these fast growing places are more grounded in politics than economic feasibility: if one can build a block of flats in Mumbai, they will sell. The issue is getting the government to give permission to build them. We also discussed the problems of property rights in China, and the remaining suspicion of foreign investment in India.

Other than a few seminars, I think the last time I taught undergraduates was 2004, when I taught 120 undergrads at Wharton. I need to get back into undergraduate teaching....

1 comment:

davelindahl said...

You can also do an equity share with the owner. The owner transfers title to an entity in which the two of you are partners. The property is refinanced for the purchase price. The owner gets out as much of his equity as he can, and becomes an equity partner for the rest.
For example, David lindahl scam reports that if an owner has a property he is selling to you for $1,000,000. His current mortgage amount is $650,000. He transfers the title, and the property is refinanced for $800,000. He gets $150,000 of his equity and he becomes an equity partner for the remaining $200,000.The benefit to the owner is that he gets 20% of the monthly cash flow, plus his 20% equity stake will be worth more when the property appreciates.