If you have been involved in real estate for any length of time, you’ve heard it said that the three most important things when it comes to real estate are “location, location, location.”I’ve heard nationally-recognized experts say that over and over on national media.I must politely but emphatically disagree.I believe the three most important things when it comes to real estate are "location, timing, and circ*mstances," and here’s why.
Just yesterday I drove past a location that I have been driving past for 40 years.Yes, 40 years.That location has not moved one wit on any GPS or map.Now, all these years later, massive construction is taking place in that spot.Why is this of interest?Because just a couple years ago, I was part of a group of investors who held an option for a year to buy that property.I was searching for a developer to bring in to put a truck stop there.Well, I was about two years too soon, because that is what is going in there now.Regrettably, my business colleagues and I do not have any piece of that action.
What changed?Timing and circ*mstances changed.For 40 years, it was vacant, overgrown, unfarmed farmland sitting at a freeway interchange in northeast Ohio.The location never changed, but the timing and circ*mstances changed significantly.One of the changed circ*mstances is that the other truck stop at that location is doing exceedingly above what was projected.They often have a line of cars and trucks waiting to get into it.Because of where it is geographically located, it is the first place for drivers to get gas that is more affordable after having driven at least 100 or more miles coming from Buffalo, New York and heading toward Cleveland, Ohio.
While location is a key factor, it took timing and circ*mstances (i.e. a growing, booming economy and the need for more services for people traveling on the interstate) to make it feasible to develop the property.That property had been for sale for at least 10 years before the team in which I was involved got an option to buy it.
Here’s another example.As a young child growing up in Colorado, there was a mega mall called Cinderella City that was a destination everyone looked forward to visiting.In the 40+ years since leaving Colorado, I’ve learned that Cinderella City became a struggling, declining mall that was eventually bulldozed to make way for low-income housing at that site.Once again, the location did not change, but timing and circ*mstances did.
What makes circ*mstances so important is that it includes demographics and economics.There is no better place than Florida to demonstrate how timing and circ*mstances can change the value of a location.
When you are looking at investing in real estate, think long-term as to what you project the future timing and circ*mstances to be regarding that property.
As someone deeply immersed in the realm of real estate, with a wealth of hands-on experience and a comprehensive understanding of the industry, I can confidently affirm the critical role that factors beyond the traditional "location, location, location" mantra play in real estate success. My journey in real estate has involved substantial practical involvement, strategic decision-making, and keen observation of market dynamics.
In the discourse surrounding real estate, the commonly touted emphasis on location alone overlooks the equally pivotal elements of timing and circ*mstances. This triad—location, timing, and circ*mstances—constitutes the bedrock of prosperous real estate ventures. Allow me to elucidate this perspective with examples drawn from my own extensive experience.
Consider a location I've been familiar with for four decades, a piece of land nestled at a freeway interchange in northeast Ohio. For 40 years, it remained vacant, overlooked, and unutilized. However, recent massive construction has transformed this spot into a bustling hub. What changed? The static location persisted, but timing and circ*mstances underwent a seismic shift. The region's economic landscape evolved, the demand for services surged, and suddenly, the property became a lucrative investment opportunity. Personal involvement in a failed attempt to seize this opportunity underscores the paramount importance of timing and circ*mstances.
Another case study involves a mega mall from my childhood, Cinderella City, in Colorado. The location endured, yet the mall's fate shifted drastically over the years. It transformed from a cherished destination into a struggling entity, eventually succumbing to demolition to make way for low-income housing. Once again, the constant was the location, while timing and circ*mstances dictated the outcome.
Florida stands as a testament to the influence of timing and circ*mstances on a location's value. Demographics and economics, integral components of circ*mstances, wield substantial influence. As the state experienced shifts in population dynamics and economic conditions, certain locations transformed from overlooked to prime real estate.
In the realm of real estate investment, adopting a long-term perspective is indispensable. The ability to foresee and project future timing and circ*mstances surrounding a property is as vital as recognizing its current location-based potential. Success in real estate hinges not only on identifying prime locations but also on astutely gauging the evolving interplay of timing and circ*mstances that can either fortify or erode a property's value. This nuanced understanding, born out of years of firsthand experience and a dedication to staying abreast of industry trends, sets the stage for informed and prosperous real estate endeavors.