You Must Be Able to Visualize a Property Being Put to a Variety of Uses

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One of the keys to consistently making money as a real estate option investor is the ability to look at a piece of vacant property and visualize it being put to a variety of profitable uses. The real estate buzzword for this is adaptive reuse, which refers to putting a property to use in a way in which it was not originally intended. For example, when most people look at a vacant three-bay gas station, all they ever see is just a vacant three-bay gas station. However, when a savvy real estate option investor with a fertile imagination looks at a vacant three-bay gas station, he or she immediately sees a:

1. Produce market.

2. Convenience store.

3. Tool rental store.

4. Pizza parlor.

5. Plant nursery.

6. Small engine repair shop.

7. Set of small office suites.

8. Delicatessen.

To illustrate my point, I once paid $3,000 for a six-month option on a condemned mom and pop-type convenience store in East Tampa, which had been involved in a fire. However, the building was structurally sound and the roof was still intact, as most of the actual fire damage had been confined to the shelving, coolers, and contents of the store. The person operating the store was uninsured, so the fire wiped out his business. And after I had an opportunity to carefully inspect the property, I no longer saw a burnt-out convenience store; instead, I saw a thriving produce market, and that is exactly how I packaged the property. To spiff up the property, I gave the exterior an industrial-strength cleaning and had the interior of the store gutted and cleaned out, so that would-be produce mavens could walk around inside and visualize where they could place their various fruits and vegetables. Two months later, I turned around and resold my option to a hard-working Korean family for an $18,000 profit.

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