REDNECK PERSPECTIVE: Whiskeybeer Report
It’s time for the Whiskeybeer Fund’s annual Real Estate Ad Report. Whiskeybeer is the Hog Island equivalent of The Brandywine Fund, but unlike Foster Friess and his multitude of expensive associates, Whiskeybeer has just one manager: me. And I work for cheap.
Unlike the preppies at Brandywine, I don’t resort to graphs, charts, deep analysis, trends or other such parlor tricks. I merely read the real estate ads and make a logical conclusion. A dollar invested in Whiskeybeer’s Jackson Hole Real Estate Growth Fund in 2008 would be worth almost a dollar today. Don’t laugh! How have your real estate investments done recently? Unlike one year ago, the term “priced below appraisal” is absent. For the past several years it has been trendy to be over one’s head in overvalued property. It defined one as a bold developer, now audaciously slashing prices to clear inventory without concern for losses. Plainly, being seen as desperate is becoming less fashionable.
Once again the word “charming” has not been used to describe any house listed for more than a million dollars. Charming is nice, but we can all agree it certainly does not compete with “spectacular” or “stunning,” and while sometimes “convenient,” charming rarely “empowers” or allows one to become “one with nature.”
Jackson Hole Real Estate Associates offer an excellent investment at the golf course for $2.8 million. You can tell it’s an excellent investment because the ad’s one inch of copy states it is impeccable, stunning (twice), enchanting, thoughtful, warm, inviting and best of all, offers “illuminating light” not only throughout but “all throughout.” (Note for prospective homebuilders: Always use light that illuminates as it is typically better than non-illuminating light.)
Also offered is a building lot with a “sense of place,” which is a good thing as land is typically, and preferably, kept in the same place. Risky, but potentially lucrative, purchases include a Sotheby’s property in which the ad says the home “feels like an estate.” Plainly, for only $1.495 million, “feels like” is the best you can hope for. However, the bold investor looking for short-term capital appreciation could upgrade the property, adding a trout pond, earth berm, mature trees, wall complete with barred gate, observatory and gun turrets. These small home improvements could change “feels like an estate” into a genuine estate, no feelings needed.
In case you were wondering, authentic estates typically start around $10 million.
A Jackson Hole Real Estate Associates’ listing for $1,985,000, whose “ambiance is unmatched in this price class” provides a similar if somewhat reduced opportunity. All the investor needs to do is change the ambiance from “unmatched in this price class” to simply “unmatched.”
To increase ambiance into the unmatched category, install an arched bridge. (If there is no creek for the bridge to cross, a creek will need to be added, increasing cost and reducing potential profit.) A less expensive way to add ambiance is to add “illuminating light all throughout.” Most of the homes listed in the “unmatched ambiance” category sell for at least 7 million.