I can't say I am the end-all, be-all guru on adding value where others say none exists, but I do like to think I'm a pretty creative guy when it comes to creating new streams of income for my clients. Frankly, a lot of it I picked up on from our company owner, David Mussari, who is a frigging genius at the art of creating ancillary revenue.
Anyway, I'm usually talking to fellow agents or owners about extra land next to an apartment complex or retail center (lease it during the summer to local nurseries for plant and bedding impulse sales; leased in the winter for Christmas tree sales); below grade space (add coin-operated laundry for income, or caged storage space); two or three acres as part of your multifamily complex (construct public storage units), etc. There are any number of ways to add residual income if you just put on your thinking cap.
So I was having a conversation with a colleague who runs an auction firm last week, and he told me about a company he dealt with in California. It seems a Midwest jeweler with multiple locations went out of business and the bankruptcy court had everyone involved working hard to squeeze every last nickel out of the owner and the properties themselves to settle the bankrupt jeweler's millions of dollars of debt.
Enter a giant sucking sound from the West Coast. The news was money to my ears! Each of the stores had hardwood floors installed in the areas where custom work was done on rings, watches, pendants, etc. Anything where precious metals were being formed or sculpted -- you name it. The flooring was taken up in several Midwest locations, carefully wrapped, and shipped to the California "reclamation" firm.
The result? The bankruptcy court received a check for nearly $500,000 from the firm, which had extracted gold dust, silver dust, titanium dust, diamond dust, and the dust of other precious metals and gems. That $500k was AFTER the firm had taken its fee.
The next time I am talking jeweler business -- whether it is business only or real estate, I am going to be asking questions about the flooring and how often the firm cleans in the custom/repair workspace.
As for the bankrupt jeweler? It wouldn't have made a difference as the owner's debt was voluminous. But it is really too bad the company had to go out of business for anyone to "find" additional value -- in the floor, of all places. Sort of like found money on the floor of a neighborhood pub, when you look down and see a 20-dollar-bill, and no one else around.
Only I've never looked at the floor and seen a half million dollars. But the next time I look at hardwood, the story of the jeweler will definitely cross my mind . . .