I Wish That I Knew What I Know Now
I am sure you know the song Ooh La La; it’s a catchy melody about a conversation between a grandson and a granddad about life that has been remade by many artists. The nugget of truth the granddad offers in the end to the grandson is that he will just have to learn the hard way like he did.
I’ve heard the song several times, but most recently was taken back almost 24 years ago to reminisce on my career path transitioning from a promising career as an engineer in the tech field in Silicon Valley to real estate.
I started reflecting, as many of us do, at the opportunities along my journey when I was an engineer. I can recall in the early nineties aggregating the most helpful and cool websites I discovered into a list and placing the list on the World Wide Web.
The Web was nothing like it is today, but I was one of the first to create such a list and was even recognized in a magazine for doing so. What if I would have taken it one step further? Yahoo did in 1995 later followed by Google in 1998.
The late 1990’s--early 2000’s proved to be the opportune time to purchase Downtown Napa real estate during my real estate career. The 1986, 1995 and 1997 floods were still on everyone’s minds, then came the 2005 flood.
I recall in 1999 a commercial building along Third Street that was available for sale for under $80,000 and I wanted to buy it. But, my uneasiness with the risk of future flooding and finding a viable tenant was too high.
That same building is now worth about $1 million only 17 years later. I can give you several examples of other opportunities, which I came across along my journey--some pursued, others not. In either case, I must continually move forward, be thankful for what I do have and what I have learned along the way.
In my example, the risk may be high for some, but the opportunity tremendous--if you recognized it and could see the risk was about to be mitigated. The marketplace, you could say, had an imbalance some may have noticed: undervalued real estate in a market that could support more if the environment was right.
The 2005 flood was later followed by the Napa County River and Creek Flood Protection Project. This seemed to be the turning point in Downtown Napa property values taking the risk out of the equation.
In economics, finding an opportunity with an imbalance in the marketplace and taking advantage of it is called arbitrage. I recently watched the movie A Family Man with Nicolas Cage. He played Jack Campbell, a Wall Street executive living the good life who was thrown into the alternate life he would have led if he made different decisions.
Jack was an arbitrageur of multi-billion dollar deals. The movie’s premise was showing his life if he had married his love instead of pursuing his Wall Street career.
As you can suspect he got his love back, but with a twist. I will not spoil the movie for you, but highly recommend it.
As you look back on your life and focus on the opportunities lost and those gained ask yourself: “What if I made different choices?” “What if I said ‘yes’ instead of ‘no?’” “What if I got a second chance?” There will always be opportunities available--your arbitrage--it just might not be readily apparent.
Burt M. Polson, CCIM, is a local real estate broker specializing in commercial, luxury estates and wineries. Reach him at 707-254-8000, firstname.lastname@example.org. Sign up for his email newsletter at BurtPolson.com.