The Food and Real Estate Connection
There have been some changes on Blogger and I am still adapting to them. Please excuse the current format. Three years ago, I blogged about a controversial landlord who had sold his portfolio of buildings right before the real estate market imploded, leaving the new owners holding the bag. Harlem tenants put landlord on notice - New York Daily News 'Worst landlord' puts bldgs. - & violations - on the block - New York So what has he been up to? Two years ago he was launching a new real estate fund. He was flipping real estate in his hometown. And even bought one of his sons an apartment Other than that there has been no reports of any real estate deals. What is interesting is that one of his sons has gone into the frozen yogurt business. So proud of this venture, he claims it is the first self service yogurt shop of its kind. Yogoberry 16 Handles , Red Mango and other self service frozen yogurt chains would beg to differ. But besides this inaccuracy, what’s the big deal about his child opening up a frozen yogurt shop? First of all self service frozen yogurt is a great business since and the markups are huge on the product itself and platform allows a lower overhead since it reduces labor costs significantly because the customer is doing most of the work. The son has been rather aggressive in opening up shops from Westchester to as far as Connecticut and Massachusetts. And the son is well versed in the real estate business so he has probably been able to get some sick deals on the rent. But there is no way he could do this on his own so it is very likely his father is fronting the money. Perhaps this a case of looking too hard at something but when a real estate investor has 200 million dollars burning a hole in their pocket, they are usually not looking to invest in a chain of self-service frozen yogurt shops. My theory why he is abstaining from the market, is that he has decided to sit on his cash because the real estate market has not spawned the deals that he seeks. At the same time, he's got to eat and so does his kids. The yogurt shops are just another revenue stream for the son to tide him over when things get better. He is also not alone Real Estate Agents With a Lot on Their Plates Restaurants and real estate go hand in hand since restaurant usually requires the services a very skilled broker to find the appropriate space. The real estate agent has replaced the waiter as the primary job for artistic professionals. The hours are just as flexible and although there is no salary, a good real estate agent can make more in a month than a waiter. Artists, particularly actors are ready made for sales. Although the overall tone of this article is quite hopeful for these real estate restauranteur, yet there is a very hidden yet ominous message in this article. It is not uncommon for real estate brokers or anyone to invest in any particular type of business. But what makes restaurants appealing to real estate brokers is the cash flow. A real estate broker gets paid on commission and even though those commissions can get very fat, they may have to wait months maybe years to close a deal. In the meantime they need another source of income, and currently I do not know of any firms giving out draws to their brokers at this time. A good restaurant is a license to print money and in these times all real estate brokers want that license. 2012 near the end, but it is still enough time for the Mayans to prove themselves right. So real estate brokers are hustling have no choice but to diversify their revenue streams.