Many people are familiar with the concept of sub-dividing a large piece of property into smaller lots. The same concept can be very profitable in other areas.
Taking a larger parcel, structure or complex and dividing it into its parts can result in much higher prices, and threfore good profits.
One example is a person buying a large warehouse, dividing the floor space into many smaller offices, and doing a big rent up effort - in fact this can be done by simply renting a large space and renting out smaller parts. A good example of this is shared office complexes, that rent out a floor, and then turn around and rent individual offices with one overall secretary/receptionist service at much higher per square foot prices.
Another example is syndication, whereby a person might gather a group of investors into a project, and take a share for himself in exchange for putting together the deal. This can also be done where he simply sells say 10 investors on the idea of owning one tenth of a $100,000 property for a $12-15,000 price - he pockets the difference.
The same concept is used in hotel room syndication - made popular in Whistler. Instead of buying a hotel, you can buy a room, or even a quarter share of a room - for your own use, or for rental purposes. The syndicators take a profit from higher prices per room or portion, and can also take a percentage of ongoing management fees.
Condos or townhouse complexes are also ripe for subdividing. Some people buy apartment buildings, create "condo" strata units, and sell them for higher prices. This can also be done by simply buying condo complexes, or townhouses, and splitting them into the individual units at higher prices.
Raw land can be subdivided, splitting 5 acre parcels into house lots. The same "higher useage" principal can occur in cities where old houses on large lots can be demolished and duplexes or two or three houses, or even townhouse or condo complexes put up in their places.
One area of caution is the bylaws and city ordinances involved - the more complex and involved the approval process is, the higher the development fees, the public consultation process - there can be some very expensive and time consuming delays! Another area to watch for is not getting quite as many lots from a parcel, due to city park requirements, easements, roadways, etc - this can REALLY affect your profits!
Andrew Larder Real Estate Investment
To receive free info on no or low money down real estate investing, send a blank email to: monopolyinvestments@getresponse.com
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