Only if you have prior success, say brokers

By Alex A. Kecskes

Sales are down, foreclosures are up, and in some “ground zero” locales, prices are sinking like lead in quicksand. Firms are looking for other opportunities to diversify and improve profitability. Some have found innovative ways to add to their bottom line, niches that have opened up some very lucrative opportunities. But where are these opportunities? And how do you find them?

Adding an Investment Group

Alain Pinel REALTORS® (APR) recently opened an investment group for multifamily and commercial business properties. The new group, headquartered on San Francisco’s Union Street, teams experienced investment property specialists to serve the city and greater Bay Area. The group will market and sell large and mid-size apartment communities, luxury/boutique multifamily buildings, tenancy-in-commons (TICs) buildings, retail centers, boutique hotels, and commercial office properties. “This move represents a significant expansion of service offerings from the traditional residential brokerage house,” says APR’s President & COO, Larry Knapp, adding, “Ours was a form of diversification not precipitated by today’s tough times, but something we saw as a strong segment of our marketplace that we haven’t been serving.” Knapp explains that the move was part of an overall business plan that happened to coincide with the market. “With 28 offices in Northern California, we generate so many referral opportunities from residential-to-commercial and from commercial-to-residential, that now we can capitalize on these leads while offering clients a new and expanded service platform.”

Focus First on Core Areas

Michael P. Zagaris, CEO of PMZ Real Estate, Modesto, says his firm has evolved from a local residential real-estate company to a “full-service” regional real-estate company with a variety of affiliated businesses. “Our latest manifestation takes us close to a world where we will begin to look more like a financial services operation than what might be considered a real-estate services operation,” says Zagaris. Presently, PMZ Real Estate and its affiliates offer a full spectrum of services, everything from residential and agricultural brokerage to insurance and land development.

“Our organizations are constantly evolving,” says Zagaris. Their latest effort was the creation of PMZ Insurance Services.  “We are presently evaluating a number of new opportunities,” adds Zagaris. “We have sought out experts in every field we’ve gone into.” He goes on to explain that diversification may not be the solution for every firm. “I don’t consider diversification to be a strategy borne out of a response to ‘tough times,’” says Zagaris. He insists that diversification is a positive strategy resulting from prior successes. “If times are difficult in a company’s core area or areas, I would suggest focusing on those areas rather than diversifying.”

Keep a Long-term Perspective

Ackerman Realty Group, a boutique firm focused on customer service and producing results in San Francisco, is a pioneer in the complex niche market of trust administration and probate sales. “Over the years as an investor, renovator of homes, mortgage broker, and player in the real-estate business, I’ve seen REALTORS® make some very bad decisions,” says owner Craig Ackerman. He advises firms to lower costs, consolidate, and be more realistic about their future.

“The first challenge is to recognize the market you’re in,” explains Ackerman. “We basically take a ‘job-shop’ approach, when we meet with a client. We ask them more questions than they ask us.” He stresses the importance of concentrating on who you are, where you came from, and not trying to accommodate everyone with everything.

His top three thoughts on diversification? “Number one, go back to your existing client base,” he advises. “Keep current clients on your MLS. Number two, follow the money trail; people are still refinancing. Number three, look into property management. Often, when you’re managing 12 to 15 units in a condo complex, people are eventually going to approach you to show them.” He stresses the importance of keeping a long-term perspective and a positive attitude. “Overall, ‘stay in the shade’ and be thankful for the sunny days.”

For those still beating themselves up over being caught in a down market, some sage advice from an industry guru: “Sometimes by losing a battle, you find a new way to win the war.”—Donald Trump

Noteworthy Reading & Resources

The Up Side of a Down Market: www.ocregister.com/ocregister/money/article_1750424.php.

Don’t Bail Out Of Real Estate Yet: http://realtytimes.com/rtpages/20061106_bailout.htm.

Marketing Strategies for Turbulent Times: http://rismedia.com/wp/2008- 04-02/marketing-strategies-for-turbulent times/#more27286.

Real Estate Marketing: Power Up Your Prospecting for 2008 Success:

www.eneighborhoods.com/Home_LearnMore/article11_RealEstateMarketingSuccess.asp

Alex A. Kecskes is a freelance real estate writer.