The Rewards of Development

In last week’s post, I shared parts of a bio of mine written years ago. Part of what that bio recounted was how I got into real estate. I started with small properties at first, but later on I gravitated into a much more profitable part of real estate known as development. Looking back, some projects I did really surprise me. I find myself thinking, “Wow, little ole me did all that!”

My work in the development side of real estate has been some of the most profitable of my entire career in investing. I’ll never forget getting a call from a guy in Pennsylvania telling me about a 77-unit apartment building that was for sale at a great low price. Shortly after that I heard, for the first time, about people converting apartment units into condos. After a lot of red tape with the local authorities of Bethlehem, Pennsylvania, I got the go-ahead to convert all 77 units into condos and, wow, what a quick 2.7-million-dollar profit I made. It was so easy because most of the renters bought their own unit.

I followed that up with a 44-unit condo development in Mississippi and walked with 1.3-million-dollars in profit from that. After those great successes, I developed a 13.3-acre commercial development right here in Salt Lake City and made 1.1-million-dollars in profit there.

I was on a real roll when my Kauai attorney called me and told me of a great plot of land on which I could develop a bunch of condos. I was skeptical at first, but after I drove by the golf course that was next door to it, I forged ahead and laid out plans to build 68 condo’s right near beautiful Princeville, Hawaii. Wow, was I super surprised when I sold all 68 condo lots before we even broke ground.

Timing is so very important with development. You sure don’t want to get into a big development when the real estate market is at the top and there are reasons to believe that the market is turning and heading down. You also don’t want to get into a market that is oversupplied in the type of real estate that you want to buy into. That’s when you need to be patient or need to look at another city or state where the market is already down but looks like it’s picking up.

I continue, to this day, looking for the right and best real estate, whether it’s dirt to be developed or apartments and commercial developments. In August 2003, I hired an office manager (Kimberly Wangsgard), because, wow, did I need help with all my properties. Ms. Wangsgard had, in her former job, played a critical role in development for S-DEVCORP, a company that had developments ranging from 1.5 million dollars to 30 million dollars.

She helped me so much that I eventually had her change her last name to HAROLDSEN. Yes, I married that very beautiful, brilliant, and kind woman and it’s been an absolutely wonderful and happy marriage. An excellent development indeed!