HAL LONDON INTERVIEW

If you ever wanted to meet a successful, down to earth, compassionate investor, then Hal London would be the guy. I came in contact with him while taking the appraisal course at the Chicago Association of Realtors. In the class, I was impressed with his level of knowledge and experience, and in person he did not disappoint. I can honestly say that the time spent during the interview with Mr. London was definitely a delight. He is truly a special individual and I feel privileged to have had the opportunity to be in his presence. He has a proven track record, is a genuinely overall nice guy, and houses a wealth of experience and knowledge in the real estate arena. He's definitely someone I feel our readers should know.



Mr. London is the President of Key Appraisals, an appraisal firm which specializes in residential, commercial, industrial, agricultural and special purpose valuations of real estate in the northern two-thirds of Illinois. He has several active appraisers in his firm and multiple locations throughout the area. He has served as an expert witness in various court cases, is a founding member of the National Association of Realtors Appraisal Section, President of Key Realty, a real estate consultant and land developer/builder. Mr. London also holds a Bachelor's degree from the University of Illinois and a Master's degree from Loyola University. I believe it is safe to say that he is a qualified candidate to share with you here.

Mr. London was introduced to real estate at a very young age by his father who was a successful, self-educated builder. In fact, he credits his dad as his mentor, having a huge impact on his success. He began investing in real estate in the late 1970s, buying and developing new land. Like his father, he chooses not to utilize banks to finance his ventures; instead he presents opportunities to friends and acquaintances. For example, he is currently working on a new construction project in the hot Bucktown area. He has successfully secured valuable land with zoning to construct a 3-unit condominium dwelling. An opportunity is being prepared for interested investors, offering 7% interest on monies invested and a 10% share of all profits within an 18-month term. As you can see, this is a rather aggressive investment offering huge benefits to all parties involved.

During our conversation, I asked Mr. London how his understanding of valuation has been beneficial to his investment ventures. He stated, “who better than an appraiser can determine what something is worth.” In fact, he suggested that all investors in general should consider taking appraisal classes and/or have a basic understanding of appraisal methodologies. He added that it is important for investors to learn the concept of value. Not to mention, as an appraiser, he's out on the streets directly seeing opportunities first hand. In his eyes, his profession puts him in the perfect position. We've all heard the saying, “being in the right place at the right time.” After all, timing is everything in real estate.

Also while on the subject of property value, Mr. London commented about the correlation between it and society’s perception of the current real estate market. He stated, “something is only worth what someone is willing to pay,” which is one of the key elements when determining value. Like appraisers, investors must be able to read and understand not only the effects of economic factors, but those of psychological factors as well. This is especially true in today's market where it is almost impossible to calculate risk. We are at a point where economists are struggling to predict where the overall real estate market is heading. He proposed the question, “have we reached the bottom yet?” And answered, “who knows, only time will tell.” He went on to talk specifically about the wonderful job Mayor Daley has done revitalizing Chicago through aggressive zoning changes and fast track programs. He referenced the fact that Chicago has had a steady appreciation growth in property values over the last 15 years. In 2005-06 the values hit a plateau. Some areas dropped while others remained stable. He proposed another question. “Will we see the same changes in the values of real estate as those on the West Coast?” And responded once again, “I don't know, only time will tell.” He stands strong with the belief that it is extremely hard to speculate with all the factors that we are facing in this current market. This makes investing decisions and options even more difficult to determine. As a matter of fact, he believes that the best investment at this point and time just may be a savings account.

However, I was able to pull out of him what he considered to be the best possible real estate investment in today's market. He suggested strip centers. He likes the concept that there are minimum maintenance costs, triple-net leases, and low expenses. He was sure to add a caution statement about the importance of location, location, location. He stated, “investors considering strip centers must be aware that those in high economic base areas are struggling from tax hikes and those in areas of low economic bases are struggling from the lessee's inability to pay rents. The strip centers that are holding stable are those that are completely in the middle (economically) of the two. They generally have 5-6 units, 1200-1500 square feet per unit, and plenty of parking.” Yet like any other investment, it is vital that you do your research and know what you are signing up for. It is also important to remember that the commercial real estate sector is different than the residential market. In all thy getting, get understanding.

In addition, Mr. London offered the following advice to both new and seasoned investors, “Study each potential venture carefully. When you think you know which route you are taking, go back over it in a different direction.” He advises to always have a defined exit strategy. Investors should compile a list of all the things that could possibly go wrong and define a contingency plan for each item on the list. If he/she cannot come up with a contingency option, then the investor may want to consider that the venture is not a good investment. Lack of planning and preparation is where many new investors fail. They jump in with limited resources and they lack deep pockets. So when one thing goes wrong, it is detrimental for them. They are essentially out of the game before they've even gotten started.

Toward the conclusion of our conversation I inquired why Mr. London chose real estate. His response was simply because he enjoys it. He told me that he gets gratification in what he does. He likes to be in a position to help other people and to make a difference. He stated that he is a problem solver and in situations where he sees something wrong, his direct response is to find a solution. I'm a true believer that everyone has a purpose here on this earth. And in that purpose is where we find true happiness and it leads us into our wealthy place. Many people go to their grave never fulfilling their purpose, and I honestly think that Hal London is definitely not one of those people. He has found his purpose and is living the life that was meant for him. I only pray that I, too, will be able to experience the same in my life someday. Happy investing and remember - Knowledge Without Action Is Useless.

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For more information on Hal London of Key Appraisals, visit www.keyappraisals.com

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