Marketing and Sales Tips

What Is Hidden Behind That Wall?

by Marvin Levin

About a decade ago, I received a call from a friend from at a San Francisco Bay Area bank about a pending property in foreclosure. The property was a large apartment project in a good occupancy area in the San Mateo area, which is located south of San Francisco. The caller referred to the property as their “mystery property” because they couldn’t understand why it had a substantial vacancy. The owners seemed to be experienced, and the property was located on a heavily trafficked street.

I asked an appraiser friend to do a drive-by on the rents, and the mystery expanded when she reported to me that the rents were either at or slightly below market.

The following Sunday, I visited the property and discovered an architectural nightmare. A wall hid the building and made the project look like a prison or an army barracks. The drive-in entrance was okay, but once you were inside the only thing you could see was a large carport parking area. The rental office was not easy to find, but I persisted and was able to locate it.

The building fronted on a large attractive lagoon, a small private bay in Foster City, California. It was absolutely gorgeous, and I believe that any reader of this real estate tip would make this project their No. 1 or No. 2 pick if they were out searching for an apartment in that price range.

As I recall, it was about one o’clock on a Sunday afternoon, so I drove back to the project entrance to see how the traffic reacted. In the course of about a half hour, two cars drove in the entrance. Because they did not head for a parking space, I assumed that they were probably rental prospects. Both cars drove in a short distance, hesitated, turned around and drove out. Given the initial appearance of the project, that was no surprise.

Pause in reading this for a moment, and ask yourself what you would do to help the situation.

Students in my UC Berkeley Extension “Real Estate Ideas” class could ordinarily come up with at least a half dozen ideas. Although one was not necessarily better than another, the idea that was employed had extraordinarily dramatic results in a very short time. We did the following:

• We took two very attractive pictures of the property from a platform in the lagoon facing the property. It had the appearance of a beautiful waterside resort.
  
  
• We had the photographs enlarged to double poster size by a firm in San Francisco. The posters were then covered with plastic sheeting to protect them from the weather, and then installed on each side of the entryway on the street. As prospects drove into the project, they were invited to view this elegant waterside community.
  
  
• A thin yellow stripe was laid down to direct foot traffic to the rental office.

The rental staff informed me that they believed the problem of the drive-away prospects was thus solved for a trivial cost.

If you know of a value-added income property, please contact me.