Another way brokers screw up

Wasted a ton of time this weekend due to broker error.

This genius, who will remain nameless, listed his property for sale on the relevant listing databases. The property is odd, but it has a ton of potential if you change its use.

We spent a bunch of time running numbers and dreaming up a strategy for how to get the change of use.

When I called the broker this morning to confirm it’s still available, he casually asked if I knew the property was a ground lease.*

No, I did not… because it’s not on any of the marketing materials!

Obviously, there’s a huge difference between (1) investing a ton of time and money in a property you own; and (2) investing a ton of time and money in someone else’s property.

#1 is fine; #2 is likely to end badly. Glad I spent the time on this, rather than hanging out with my kids…

*What’s a ground lease? It’s when an owner wants to keep a property for the very long term, have nothing to do with improving it, but also collect rent from it. He will sometimes allow someone else to develop it under a very long lease, usually 99 years or something. The developer builds and operates the structure while paying the (usually quite low) ground lease payment to the owner. At the end of the 99 year period, if the lease hasn’t been extended, ownership of the structure reverts to the owner of the land, and the developer is out of luck.