Early one morning, Brent received an email from a friend that said he needed to check out an article advertising a whole town for sale in California. The town was Cerro Gordo. Turns out, it was an old mining town that’s essentially a ghost town now.
The ad caught Brent’s eye, because it was marketing an entire town—400 acres and 22 structures—for under $1 million.
Brent has been interested in the hospitality sector for years now. He broke into real estate investing by buying a hostel in N.Y. and now owns at least one other in Austin. Seeing the potential to become an incredible destination, Brett decided to make an offer on the town.
Making an Offer—Sight Unseen
When he called the broker, he found out the listing had garnered a lot of attention. There were hundreds of interested buyers. He decided to make an offer: $1.4 million with a non-refundable earnest money deposit of $50,000.
Keep in mind, neither Brent nor anyone else involved in the project had been to the site at that time. They only knew what it looked like from the pictures in the marketing material.
With the offer made and accepted, Brent and his team had seven days to raise $1.4 million. So, they made a bold move and reached out to their client list to see who might be interested in working with them.
Fortunately, they had enough goodwill with their clients that they were able to get commitments from several potential equity partners (and one who structured their investment as short-term debt aka a loan). As usual, strong relationships played a key component in this deal.
The investors didn’t even receive their paperwork for around six months after the funds were wired. Brent mentioned that most of the agreements were made by a handshake—or even a text message: “Hey, I got you.”
Knowing that they would need to raise additional funds, Brent and his partners went into press overdrive.
Trading Up the Chain
Brett reached out to The Real Deal: L.A. From there, he sent that link to Business Insider. Then, he sent that link to Entrepreneur magazine. And eventually, he ended up with an article in The New York Times.
(It’s important to mention, he sent out around 40 emails before someone decided to write up a little 200-word blurb in the local paper.)
With all the exposure and energy generated from the press, the investors have received several offers of upward of $3 million. So, in a relatively short period of time, they have been able to create a cash-flowing business and around $1 million in equity.
For anyone who wants to replicate this strategy, Brett suggests to start with a smaller, local publication. The interest you attract from the initial article will allow you to reach out to a larger publication—then, rinse and repeat.
Now, I realize most of us aren’t going to immediately go out and start looking for ghost towns to buy… But there is definitely a lesson here in the power of exposure and leveraging the media!
Would you ever buy a ghost town? What’s the weirdest type of property you’ve heard someone purchased?
Share below in the comment section.