Last Monday, my finance class had the privilege of hosting two guests speakers during our lecture. These two speakers, Dr. Samuel Harrison and Mike Gentry, spoke of their experience with real estate development and contractual issues that pertain to topics we were covering at the time. After listening to the business partners tell of their current real estate deal, I was able to further confirm my growing suspicion that I might be interested in a career in real estate.
Harrison and Gentry came to speak with us about a commercial development project they are in the process of brokering. The site of the development is a plot of land, owned by Harrison's family (his great-grandfather won it in a poker match!), at Highway 6 and Briarcrest. After receiving an offer worth consideration, Harrison's family decided to move forward with the development of their property. As of now, the plan for commercial development includes a hotel and "super" gas station.
At this juncture, Harrison enlisted Gentry, a real estate attorney, as counsel moving forward in the deal. As seems to always be the case in development deals, several hurdles presented themselves along the path to the current point. The notable setback that was discussed involved the removal of oil pipeline infrastructure that was no longer in service. During the removal process, a small amount of oil was spilled onto the property. Though not catastrophic in its quantity, the spilt oil proved to be potentially hazardous enough to warrant concerns about foundation issues on the land. The end result? Complete soil replacement, costing $250,000. As tends to happen, this issue managed to trigger another one. This second roadblock required a search of the property for historical artifacts, due to its proximity to a historical site, the town of Boonville, TX. Upon solving this problem with no issues, the project was able to continue smoothly.
In conjunction with their field experiences, the two men spoke of the contractual elements of their deal. They explained escrow to us, a topic I had always been unclear on, and the inner-workings of negotiating development deals. I learned that escrow is a bit of a cousin of layaway in principle, requiring a buyer to provide a seller with payment in return for exclusive rights to the property during negotiation. In said negotiation, things like feasibility tests and zoning rights are handled, culminating in the buyer's decision on whether or not to move forward with the deal. The two men provided us with a few seller's tricks in the negotiation that serve to skirt as much of the costs as possible towards the buyer (that I'll hopefully get to carry these out someday), as well as other issues, like dealings with TxDOT (my grandfather's employer for 40 years.)
Everything about this lecture managed to pique some part of my interest. My personal experiences with land transactions were comparable to our lecturers circumstances, but differed enough to provide with with some full circle perspective. The legal issues also fascinated me. I've always been one to thoroughly examine anything I'm given, searching for loopholes, caveats, or any inaccuracies to use as ammo in an argument. The "seller's tricks," as I've been calling them, were a perfect example of something I would do in the situation.
As this class progresses, I'm realizing that I would love, as well as be suited for, a career in real estate. Stay tuned to see if anything changes!
No comments:
Post a Comment