In real estate investing, first mover advantage is an obvious competitive advantage attained by the first major occupant of a particular market segment. By establishing and attracting first mover tenants to a real estate investment property, a first mover advantage investor can leverage his or her real estate investment capital and gain a competitive edge in the particular market segment in which they intend to invest.
First Mover Advantage Case
A first-mover advantage business is really just that-an an investment in a real estate property. It’s not an entity separate from the person or persons who own and operate the property. And for this reason, it’s wise to understand the fundamentals of how and why this form of investing works.
It’s a process, which often follows a predictable set of steps, namely: Finding a good property to invest in, negotiating with and getting signed a lease agreement with a potential tenant, paying the required money, and gaining a regular supply of pre-paying rent payments from your tenant to benefit from first-mover advantages.
This article will make use of the Swot doctrine in identifying the first mover advantage case scenario for real estate investing helpful article. Basically, Swot recognizes that there are three phases to every profitable investment: Discovery, Access and Marketing. The first phase is the most important of these three; in the discovery stage, you are basically seeking out investment opportunities.
The second phase is slightly less important; essentially, you are gathering information on the investment properties available to you, which may include asking the appropriate questions, going to the appropriate meetings, and so on. Accessing the investment property and marketing it effectively is the third phase.
You see, in our first-mover advantage case, we want to find an investment property that is both under-utilized but also has the potential for attracting a significant tenant pool. For our first company, this meant finding a foreclosure home in need of repairs; we knew that the owner had fallen on hard times, and was in danger of being foreclosed on by the lending institution.
This property was registered with the county government as a public record and there were no restrictions on who could approach the property or what type of paperwork could be used to obtain the information we needed.
We were able to find tenants immediately because the owner was so desperate for money, and he was so motivated to get the job done that he hired two employees to help him. Our company was able to move forward with the first-mover advantage in not only getting the tenants but also in collecting the profits we would receive from the rental of this property.
