COMMUNITY INVESTOR
SPOTLIGHT: SAN DIEGO
FOUNDER AND MANAGING PARTNER JAMES PAINE IS LEADING SAN DIEGO’S WEST REALTY ADVISORS FROM COAST TO COAST, DOOR TO THOUSANDTH DOOR. SoCal Success Story
bottom,” said Paine, a past winner of the San Diego Business Journal's 25 InTheir 20s Award for young business leaders. In addition to his real estate business, Paine is a minority partner in an interna- tional e-commerce company. Explaining that business’s concept to investors can be difficult sometimes, he said. Real estate, though, involves a physical asset that everybody recognizes. It’s relatively easy to grasp the business model, costs and market conditions.
by James Hart
I
of five years. Today, about half of its deals are flips that the business handles on its own. The other 50 percent are joint ventures with partners who carry out the fix-and- flips with equity fromWest Realty Advisors. While West Realty Advisors' fund looks for properties in several states, most of its turnkey offerings have been located in the Greater Chicago area. (Though this year, Paine notes, the firmwill be looking to add a second market as a way to help its inves- tors diversify their holdings.) Paine and his team specialize in sin- gle-family properties that are in some form of distress—either from a financial stand- point, such as homes that are in foreclosure, or because of a weather-related issue. Vacant properties in the Windy City, for example, don't fare well in the region's harsh winters. ACTIVE IN MARKETS COAST TO COAST In addition to Chicago, West Realty Advisors has been particularly active in California, Florida, Arizona and Nevada. The goal is to find properties that quickly generate cash flow as opposed to price appreciation—though Paine is still selective about the overall conditions of specific markets where West Realty Advisors operates. “We in general like to be where there's a decent economy of one kind or another,” he said. “The thing I like most about real estate is it’s totally understandable, from top to
f anybody could be described as a natural-born entrepreneur, it’s James Paine, founder and managing partner at San Diego-basedWest Realty Advisors. The Santa Barbara native started his first businesses when he was just a boy, renting out his pets to neighbors and sell- ing candy to other kids. And in 2007, he quit California Polytechnic State Univer- sity so he could forge his own way in the world of real estate—which ultimately led him to his biggest opportunity. “I owned a couple of real estate broker- ages that specialized in selling foreclo- sures in banks,” Paine said. “Basically, I just saw a great opportunity to invest in real estate. Prices were crazy low. We saw a lot of people buying from brokers’ offic- es—just incredible deals on housing.” As a result, Paine launched West Realty Advisors in 2009. The firm operates a multi-investor fund that purchases, ren- ovates and flips residential real estate in 26 states, delivering an average annual net return of 20 percent or greater, according to Paine. The firm also has a thriving busi- ness in turnkey properties and sells its own corporate notes that offer annual returns of 9 percent to 12 percent.
BOTTOM LINE IS TRUST “Literally anyone who
trusts you and likes you and
believes in what you do can invest in you,” he said. One way that Paine wins investors'
trust? Every two weeks, West Realty Ad- visors puts out a list of turnkey proper- ties for sale. Investors get first dibs, and then Paine and his team will add any remaining homes to their own portfolio. “We believe so much in everything that we buy on the turnkey side,” he said, “we’ll buy the leftovers of whatever we buy.” That’s not always standard operating procedure at other firms, where the operators will give themselves first crack at investment properties. “We take the exact opposite ap- proach,” Paine said. “We’re willing to take everything that they don’t want.” •
FROM DOOR TO THOUSANDTH DOOR
Last year, Paine and his team achieved an important milestone: West Realty Advisors purchased its 1,000th property in the span
BY JAMES HART James Hart is senior staff writer at Think Realty Magazine. Contact him at jhart@ithinkbigger.com.
70 | think realty magazine | mar :: apr 2016
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