Middlemen do the work for neophyte investors

They find property, suggest a lender, arrange for tenants

April 10, 2005|By David Streitfeld | David Streitfeld,LOS ANGELES TIMES

SAN FRANCISCO - The only thing better than making a lot of money is doing so effortlessly. A variety of middlemen have sprung up to relieve real estate novices of the burden of doing anything besides forking over a wad of cash.

They'll find the property. Suggest a mortgage lender. Arrange for a management company to find tenants. And repeat, over and over and over, what a smart thing it is to be doing this.

Mile High Capital Group, a Denver firm, has been making repeated forays into California to sell duplexes it plans to build in Colorado, Florida and North Carolina. Presentations in San Francisco in January and Los Angeles in February drew about 400 people each, some simply curious, others brandishing checks.

On the stage, the Mile High Capital speakers sell the idea of real estate. "I'm telling you, from the bottom of my heart, you gotta do this," Chief Executive Officer Rick Dryer told the crowd at the South San Francisco Convention Center.

The firm's pitch is that it has done extensive research to determine which communities will experience substantial growth, which will lead to a brisk demand for rental housing.

One of Mile High's developments is in Fort Lupton, north of Denver. "Few areas in the U.S. afford you to go skiing one day and golfing the next," a company brochure explains in enthusiastic though idiosyncratic English.

At the side of the room, representatives of the mortgage brokers Investment Property Funding offered counsel. In the rear, Mile High representatives unfurled drawings of their new neighborhoods. People could mark off the duplex they wanted if they immediately forked over 5 percent of the price, which was usually $330,000. They won't see the finished product for as long as two years - an eternity for investors.

The Los Angeles Times is a Tribune Publishing newspaper.

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