The Starbucks Real Estate Theory

Happy Coffee CupIs there really anything to that Starbucks Real Estate Theory floating around the Net ? 


We’ve all heard it by now.  You probably recognize it as the “Get Out of Dodge Concept for Rehabs.”  If  any of those cute coffeehouses spring up, don’t put any more money in that neighborhood.   


It got me to thinking. 


There may be some truth to it after all.


One hot summer afternoon in 2001, while I was working on my college area rehab, I stopped by one of those bohemian coffee kook nooks (similar to Starbucks) that had just opened  down the street. You know the kind with the fluffy easy chairs that non-rehabbers sit in?


The coffee was so strong it had already vulcanized  in the cup and it would stay upright even if you turned it upside down- in spite of the heat.  And the young lady who took my order for the “cheapest, plainest coffee”  hesitated to give me back my change.


Her eyes kept darting back and forth finally resting on a special jar beside the cash register.  If was  for some cause they were collecting for. 


Yes, I wanted my change  back even if it was only a few cents. She didn’t seem to like that.


Since then that neighborhood has grown too ritzy for us to invest in  any more  new rehabs.  But we’re still there with the properties we had invested in while the street was a dump and we could still get in at  good prices.


As for  that chic coffeeteria?  It’s been long gone. 


Is there a some sort of moral to all of this?


Go with  our Waffle House Investment Strategy.


1. Locate a Waffle House.

2. Jump into nearby rehabs early. 

3. Get  rewarded with  best deals and the absolute best coffee. (I’m not sure where they get their special blend, but in my opinion it beats all those fancy  expensive coffees hands down).