Thursday, April 23, 2009

Building A Property Empire

What an exciting three weeks it has been.

My whole idea of Property Investment (PI) has been turned on its head, and I am now striking out in a new direction that joins two parts of my investing/business life into a cohesive whole. For those who don't know, I run a Studio in Tokyo (and just recently Osaka) which is bringing the discoveries of one of the 1988 Bi-centenary 200 Australians that made Australia great to the attention of the world (otherwise known as Alexander Technique).

Well, when you open a studio like this, we have to be very careful about location. Near the station, near your target demographic, right building, right atmosphere. Having picked a good location/situation, you don't mess with it when its working by moving to another location. Expanding might mean (here in Japan) opening another Studio at another station to add to the convenience of members. But never move your existing studio while the business is flowing in.

Then it slowly dawned on me - why not use the cash flow of my business to slowly build substantial equity in the longer term? Macdonalds did it that way, so that now they are the largest holders of retail Real Estate in the world. In the mid 90's it was estimated at USD $8.8 billion. Well, I don't think I can manage that, but leveraging my business to build a substantial property holding is my newest research question in the area of PI.

Of course ABC Learning adopted a similar strategy - and look what happened to them! So, like anything PI, not without it's risks, but if sensible planning, sufficient capital backing and good numbers prevail - I might have a vehicle which gets me out of this schizophrenic mind of flipping between my business (which is a passion) and PI (which is a challenge).

Any thoughts? Is there somewhere I could study up on this approach to building a business?