I was once getting onto the bus in Macau near the border when a woman came up behind me with a colossal dolly stuffed with fruits, vegetables and meats. It was obviously too heavy for her to lift, so I helped her out and we struck up a conversation.
She told me that she crosses the border from Macau to Zhuhai, China every week to buy groceries for her family. Between waiting in line and going to the wet market and back, the trip basically takes up her whole day.
When I asked her why she did it, she looked at me like I was mentally debilitated, and bluntly said she does it because “It’s cheaper”. It was the most obvious thing to do in the world for her.
I personally would never spend a whole day grocery shopping in a different legal jurisdiction just to save a few bucks (exchange rates considered, it’s probably not much of a saving anyway). But this interaction gave me a valuable realisation.
Nobody was right or wrong. I was simply willing to pay for the convenience of doing my groceries closer to home, and the lady wasn’t.
Real estate investing often works the same way. You could walk into a shiny agent’s office and take your pick from developments presented on fancy brochures. The prices are standardised. Management is in place. The terms are set.
It’s all very convenient. But make no mistake, you’re paying for that convenience.
On the other hand, we are currently looking at a substantial off-market portfolio of 70 properties for sale in the South of England. There is no brochure. There are 4 parties involved. We have to uncover the information ourselves, and it comes through in bits and pieces. The pricing and terms are not set in stone. Simply put, this thing is gnarly.
It’s very early days, so we don’t know what will come of this particular deal. But in my mind, it’s like we are in the chaotic wet market of real estate across the border, scavenging for a bargain, building relationships and trying to make it all work.
This time, I’m not willing to pay for the convenience.
Maybe the lady with the dolly and I are not so different after all.
Stay EPIC, Sam Lee