What the barber knew
Chuck is a good man. Chuck mustered out of the US Armed in 1945 and came west to a little town which is now a suburb of Phoenix. Chuck didn’t know quite what to do, so he became a barber. His barber shop is now about to close, a victim of the redevelopment of an older section of town. People wondered what poor old Chuck was going to do. He never had a big car or a boat or any outward appearances of wealth beyond that of a barber. But signs of wealth are not necessarily the indication of wealth. And when Chuck gets used to something, he doesn’t like to change it: Not his barbershop location, not his cars. And not his wife. But what did Chuck do with the money he earned as a barber?
It turns out that Chuck had amassed a portfolio of real-estate all over the Phoenix Metro area, owned vacation spots in Arizona, and had a home in San Diego. How did he do that? Well, according to Chuck “I learned to cut hair, keep my mouth shut, and just listen.” It seems people would come into his shop and talk about a new development they were going to buy out east. Or west. Or south. Or north, for that matter. And how they were going to develop it. What Chuck did was to research each new development proposal, and buy land that was in the way or that was adjacent to the property. If the land was in the way, then it got bought out. If the land was adjacent to the property, he would wait a few months and go see the developer, plead poverty, and sell the property for 2 to 3 time what he paid, and would carry the financing himself. He would let the developers put a few percent down, and then would carry the rest for a few years at the going rate of interest. He could do this because he himself always bought the property for cash.
Chuck used the best skills of a CI professional. He shut-up and listened to what others were saying, and positioned himself for prosperity. The land he had was either going to be bought out immediately, or it was going to sell for 2-3 times what he paid for it, with interest. He did his homework and would ask the person in the chair “Hey, you got your financing in place? Ya gonna need any more approvals from the city or county? Ya pre-selling the units yet? Are ya gonna buy more land to expand the development, or build business to serve the community?” He qualified his interest, he did his research, and used this information strategically to place his investments and return a handsome profit.
According to Chuck the Barbershop hasn’t made much a profit in the last ten years — maybe 15 to 20 K a year — but the information was invaluable. “Hell, I had to keep the barbershop open and the backroom stocked with a little beer and liquor and a deck of cards just to keep in the loop!”