| Jim Brewer with over 40 years of widely varied experience in real estate, extending from residential and commercial for seven or eight years to 15 years as the leading residential broker in a small [under 15,000 population] community to almost 20 years traveling nationally to appraise commercial real estate offers his experience to investors to assist them in finding niche investments in residential and commercial real estate. A niche is defined as anything overlooked by the market and by definition would likely be avoided by the general market when presented to them. Brewer is constantly looking for that small niche that will give the investor an advantage in the market, from investing in areas in transition from one use to another, to investing in areas in transition from one socio-economic level to another. Transition is the key element in Brewer’s investments. Without transition holding periods are typically extended to maximize returns. With transition in the market investors are able to achieve above typical returns in holding periods of one to three years. Brewer’s discerning eye for supply and demand trends in markets in transition allows him to arrive at an investment that will suit the investor’s criteria and maximize his return. For his endeavors Brewer requires only a full commission going in; a full commission going out; and 25% of any profit above a 10% return. If the investor does not achieve a 10% return, the only earnings due Brewer are typical real estate commissions.
The difficulty for most investors in these types of investments is developing a comfort level with these investments, while going against market forces which view the investment is a negative light or possibly ignores the investment completely. The typical investor consulted by Brewer is someone, who is financially secure, very confident, independent in perspective, able to distinguish value without agreement and aggressive in nature. Most investors looking for typical market returns are not likely to agree with Brewer’s advice. However, Brewer’s contrarian view of the market is the very reason for his success. When the market is buying, Brewer is prone to advise selling and when the market is selling, Brewer is likely to advise buying. In both instances, Brewer’s advice is based on market trends, investment potential, and investment returns versus market direction. Brewer’s advice is available to anyone fulfilling the previous criteria and interested in achieving more than a 10% annual return.
A representative list of acquisitions and dispositions follows:
The first acquisition Brewer and an investor made was the purchase of a two-acre, rectangular waterfront lot for $20,000 in the mid-1970’s. After clearing the underbrush, Brewer created two “flag” lots and sold the one with 185 feet of frontage for $25,000, then selling the one with 15 feet of frontage for $15,000 at a later date.
When Brewer’s 15,000 population hometown was undergoing devastating plant closings that eventually totaled almost 3,000 lost jobs, the real estate market was being devastated and Brewer was caught “holding”. He went 28 months without selling a speculative home constructed prior to the decline and 32 months without selling a lot developed prior to the decline. Forced to become creative he began to analyze the market in an attempt to find a “niche” opportunity. Brewer assessed two potential opportunities; one in entry level homes and one in executive homes. While entry level homebuyers were understandably cautious Brewer correctly assessed they would purchase if they were given more house for the same amount of money. Therefore, he constructed and sold his community’s first modular housing. Analyzing the executive home market Brewer discovered there were no speculative homes in the executive home price points and very few existing executive homes were coming on the market. Of the executive homes entering the market there were few that provided the more modern features and equipment desired by these buyers. Therefore in the midst of the worst housing market in the community’s history, Brewer initiated successful speculative construction in some of the highest price points being marketed at that time.
|
1003-05 Howell Mill Road
NE/c Howell Mill Road & Edgehill Drive
Atlanta, Georgia
|
This antiquated primarily block warehouse was almost 50 years old and suffered functional obsolescence [12’ ceilings; no dock-high loading; three warehouses with the existing walls forming interior divisions; and the largest and most recent addition to the building was depressed four feet below grade]. Located across from the Atlanta Humane Society pet adoption/disposition building; between two junk yards and within one block of one of them, the area was 85% industrial when the building was acquired for $180,000 or $18.46/SF. The investor followed Brewer’s suggestion that the acquisition be made with an allocation to take the building to 100% HVAC in order to lease it for showroom space located in close proximity to the midtown and downtown areas. The building was leased to several interim tenants until finally leasing 21 months after acquisition for $5.00/SF on a modified gross lease basis with the owner responsible for taxes, insurance and structural maintenance. Upon acquisition most brokers stated the investor overpaid for the property which was leasing for $1.75/SF. After addition of the HVAC, the same brokers stated the building would never lease for the asking rent of $5.00/SF. The building was leased at $5.00/SF on a modified gross lease basis with the owner responsible for taxes, insurance and structural maintenance. The building was sold 98 months after acquisition for $1,050,000 [a 425% increase in price] or $107.70/SF
In June of 2003, Jim Brewer made his first acquisition in a revitalizing neighborhood in Jacksonville, Florida. Prior to his first visit Brewer had no knowledge of the area and had never heard of this neighborhood. The leading developer in this historic neighborhood, called Springfield, had introduced Brewer to the area. Brewer immediately identified the neighborhood as an incredible investment opportunity. The following is a representation of some of the investments acquired and sold over the next several months without any renovations.
|
|
1532-36 Market Street
Jacksonville, Florida
|
Brewer convinced an investor to acquire this 3,900 SF duplex with one-foot thick brick walls from the neighborhood’s leading developer about six months after the developer acquired the property for $20,000. Brewer’s investor paid the developer $45,000 [a 125% increase in sale price] and they acquired the vacant lot next door for $12,100 the following month. About 37 months later the property was sold to another investor without any rennovations for $185,000 or a 224% increase in sale price.
|
|
1101 North Main Street
Jacksonville, Florida
|
Built around the turn of the 20th Century, this old liquor store/bar had several structural problems. The two side walls were pulling away from the building and had been tied together with bar joists and the front wall was separating from the side walls. The second floor space was ‘gutted’ and structurally unsound [a fireplace later fell through the second floor]. At the time of the acquisition the most expensive comparable sale in Springfield had been the acquisition of a building for slightly over $50/SF. The building that sold for slightly over $50/SF was structurally sound and had been totally renovated in 1968. The 1101 North Main Street building had been on the market for $125,000 and was placed under contract by the tenant for $100,000. Two weeks after the contract expired Brewer put an investor in the property at a sale price of $125,000. Brewer retained the tenant at $1,100 per month rent and kept the building occupied for most of the holding period; declined a sale at $325,000 four months after acquisition; then sold the property 22 months later for $152/SF [based on the first floor area] or $500,000 [a 300% increase in sale price].
In the interim the owner of the vacant property, located adjacent to the building offered that property to the investors and we acquired that parcel for the asking price of $80,000 or $3.73/SF. The investors declined an offer of more than $500,000 [a 525% increase in the sale price], 24 months after the acquisition.
|
|
55 E 3rd Street
Jacksonville, Florida
|
Possibly the oldest home in Springfield, this two-story dwelling was reported to be constructed circa 1884. Acquired for $80,000, this 2,400 SF house was in habitable condition but needed a new roof, a complete kitchen and updated bathrooms. The house rented for $400 per month for most of the holding period. Sold 14 months later without any rennovations for $170,000 [a 113% increase in price].
|
Currently on the market:
|
|
115 2nd Street
Jacksonville, Florida
|
Located in the most renovated section of Springfield and between two fully renovated homes, this six-unit apartment complex has a downtown skyline view and is located across 2nd Street from a park. Acquired for $175,000 the investors were offered $600,000 31 months after acquisition. Currently on the market for $700,000 the building is being sold with $40,000 in design and architectural plans. To be renovated for six condominiums, estimates for the cost of the “high-end” renovation [including elevator and extensive detail trim and extensive tile] have ranged from $500,000 to $710,000. When completed the price points for the units would allow for as much as a $1,000,000 in profit for whoever acquires and renovates this property.
|
|
141 East Trinity Place
SW/c East Trinity Place and Church Street
Decatur, DeKalb County, Metropolitan Atlanta
|
This is an outstanding value being offered for sale in a rapidly appreciating area. The President of Georgia State University said, “Decatur, Georgia is the community that all the other cities in Metropolitan Atlanta are trying to become.” Decatur is a pedestrian oriented community of about 18,000 residents where first graders walk and ride their bikes to school. Locations within the city limits have median household incomes exceeding $100,000 and demand for the area is so great families are purchasing $300,000+ homes and demolishing them to build on the lots. Currently on the market for $2,000,000.
|
Copyright 2005, Brewer Agency |
|
