1. Limited Opportunities:
There are only 32 NFL teams and limited usable real estate. Football dynasties come and go, but the team's value continues to grow. In the 90's, the Cowboys dominated the football world. The team has been terrible for years, yet they are the top valued football team.
Values in real estate continue to rise like football teams because of scarcity. There's a limited amount of useable real estate for people to own or invest in. With only so much usable real estate, it creates scarcity and helps drive up the prices, helping investors reduce their risk.
2. Emerging Markets:
All it takes is one. In football, it can take just one person to take a team from the bottom to the top.
In real estate, it can take one company or one local government official to change a city's trajectory. As we analyze emerging real estate markets, you want to find cities with policies that help grow the local economy to maximize your investments. Consider investing in areas that aren't on any top 10 lists, but cities that are working their way towards becoming a top 10 city in the future. That's where you make your money. You want to find the up-and-coming market so that when the peak hits, you can sell at a crazy price to maximize your return. Those areas could be a specific city, a small neighborhood within a few blocks, or a specific suburb outside a major city.
3. Bad Management
Some teams have great owners, executives, and coaches to forge their way into greatness, while other owners get in their own way.
Lousy management in a great market allows the next ownership group to fix their operations to uncover growth potential to meet their investor's needs.
Conclusion:
Washington Commanders are the perfect example of how a football team is like real estate. The team increased in value by over 700% because there were only limited opportunities. Washington, D.C. is a great football market for job and population growth to keep a solid fan base that can afford an NFL ticket. The team was mismanaged for years, but that allowed the new ownership group to fix prior issues and put the right pieces in place to maximize their investments.
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