Lessons From Legendary Real Estate Investor Francis Greenburger

Out of all the real estate investors I have studied, I have the most respect and adoration for Francis Greenburger

He is a humanitarian

Over the course of his real estate career, he has had many ups and downs (personally and financially)

And at the end of it all, he has created tremendous wealth and made a true impact on the world we live in today

With that, I'd like to share 11 powerful lessons from Francis Greenburger's book Risk Game

Let’s get started…

Lesson 1: Qualities of managers worthy of investment

1. Disciplined

2. Intelligent

3. Integrity

Lesson 2: Be wary of single tenant deals

In 2005 he bought a building from the sewing company who occupied the building

The company signed a new 20 year lease to stay in the building

It represented a 10% return, right off the bat!

Well, the tenant went bankrupt a few years into the lease and all equity was lost in the deal

Lesson 3: Under promise, over deliver to investors

The world of investing is filled with risks

It is very difficult to predict all variables correctly over the duration of the investment

Underwrite conservatively and outperform

Lesson 4: The best time to buy a building is with low occupancy and a price that reflects the occupancy

In this scenario, there is opportunity to create value by building up occupancy

*It is imperative to understand the reason for the low occupancy.

Mismanagement = 👌

Major employer leaving = 🚩

Lesson 5: Development is highly dependent on timing

In 2005, Francis bought four lots in a highly sought after area in a hot Brooklyn neighborhood

What could go wrong?

The recession

He carried the buildings at a loss until 2010 when the market finally recovered

Lesson 6: If you build it, they will not necessarily come

In 2004, Francis bought land in Muskoka, Canada, a vacation spot outside Toronto

The land was cheap: $4M for 1,000 acres

The plan was to build and sell homes

Once enough homes were sold, a golf course would be built

The homes did not fly off the shelf as expected

So what did they do?

Built the golf course to attract home buyers

That didn't work either

If you build it, they will not necessarily come

Lesson 7: Be there for those you know to be good

A prominent real estate investor in his 80's reached out to Francis desperate for money to settle with a bank to avoid being charged for fraud

Francis sent him a check on the spot

Reputation matters.

In this scenario, Francis had respect for this man and felt the need to help a man he knew to be good

Lesson 8: "I don't pick investments; I pick jockeys - not horses"

It is less about the particular business someone has found or created

It is more about whether their general approach makes sense and they check the 3 qualities worthy of investment

Lesson 9: "I don't invest in any big funds run by large investment companies"

When funds become too big, they no longer become targeted

So Francis looks for targeted, mid-tier investment opportunities

One of his venture investments was with a man named Fred Wilson, in the very early days of Fred's venture called Union Street Ventures focused on emerging tech

It was a massive success (they bought Twitter for 10 cents a share!)

*Fred Wilson still writes one of my favorites blogs. I highly recommend checking it out here

Lesson 10: Stay close to the action

Francis met Fred Wilson at his kid's elementary school in New York City....

Stay close to the action, you never know what will fall into your lap

Lesson 11: Tips for young people

1. Reputation matters

2. Find knowledgeable mentors

That's all for today friends. If you enjoyed these lessons from Francis Greenburger, I highly recommend his book Risk Game

If you found value in today's newsletter, it would mean a lot if you share it with a few friends

Thanks for joining me this week,

Jake

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