In The Shawshank Redemption, Morgan Freeman played a convict who could “get things for you.” Whether it was plum job assignments or pin-up posters, he was the go-to guy within the confines of that community.
The idea of a go-to guy in a community is a common prospect, especially in real estate — without the criminal aspect, of course. There’s somebody (or multiple somebody’s) in every metropolitan area who knows the best contractors, the richest investors, the savviest real estate agents, the smartest mortgage brokers, and are even on a first-name basis with the folks in the municipal permits department. And as a result of knowing all these people, they have a keen insight of what’s happening in real estate in that community.
We’ve recently met a guy named Charles who fills this role in Chicago, Atlanta, & Dallas. He’s been doing it for fifteen years and he’s well-connected. He not only knows what properties are undervalued, he also understands financing. Best of all he has a database of local investors with cash on hand. He is a one-stop shop for anybody who wants to do business in Chicago.
What Charles doesn’t have is that same capability in other communities.
As DBNR expands its focus to include “light rehab” properties, we see a strong value in connecting with people like Charles. It dovetails with the trend we’ve been seeing (and writing about) of a trend away from regional real estate expertise toward national real estate expertise, in which professionals can take advantage of investment opportunities beyond a particular area. Imagine Charles’ counterpart in highly depressed Las Vegas want to share insight — and risk — with people in other parts of the country, as opposed to betting on the revival of his overbuilt city.
I’m working toward becoming a different type of valuable resource like Charles in Silicon Valley. We want to be his partner and the partner of his counterparts elsewhere. The problem — as always when people first come together through electronic and other impersonal methods — is trust. Establishing trust within the confines of a any community is easy. You say what you’re going to do and you do it, on time, and everybody in the neighborhood knows you stand behind your word. That’s not so easy when someone isn’t from the neighborhood.
The problem comes when someone’s stock-in-trade (who they know) are also their references. People are cagey about sharing that kind of information. We’re working through that. We’re still doing due diligence to confirm that Charles and others like him are who they say they are. We’re using social networking tools, like national real estate forums, to find people who know them or know of them. The tools are there. The process may take a little longer. But the ability to go to one person and spread your real estate investments nationally rather than locally is becoming a viable reality.
