Location, Location, Location
Location, Location, Location
From High-Tech To Real Estate
After graduating from North Carolina State University in 1993 with a degree in electrical engineering, I started working in the high-tech sector. My plan was to put any extra money I made into real estate as a way to accumulate wealth. I had an aunt who owned a successful brokerage, and she got me excited about real estate as a career.
Broker-owner and President
Cap Equity Realty
Cap Equity Locations, Los Angeles
A brief history: Started in real estate sales in 2007; opened the brokerage in 2008 and the film location company in 2009.
2012 gross sales: $12 million on 8 transaction sides
2013 estimates sales: $60 million on 24 transaction sides
Number of offices: 1
Number of sales associates: 2 full-time, 5 part-time
I started Cap Equity -Realty in Los Angeles with two other agents in 2008. One day in casual conversation, a buddy mentioned he had attended a cookout at a $9 million mansion. I asked him how he knew someone who owned a $9 million mansion. He said he had been shooting a music video on the property, and the owner invited everyone to stay. A lightbulb went off in my head: When you put money in someone’s pocket, you form a relationship. Those relationships can lead to buying and selling homes.
When I researched how the entertainment industry works, I learned that when commercials or television shows, say, “Modern Family” or “CSI: NY,” go on location, they need a house to shoot or an office building or a run-down warehouse. This happens all over L.A. every day. Close to 500 location scouts were all independently running around and looking for sites. There wasn’t anything like an MLS for the film industry.
Serving A Niche Market
In 2009 we started Cap Equity Locations. The early legwork involved creating a database of properties and cultivating the clients to book them. We now exclusively represent more than 700 commercial and residential properties that are used in feature films, TV shows, commercials, photo shoots, and special events. We facilitate between four and nine productions each week, and the number is growing.
Since the beginning we’ve generated over $700,000 in filming revenue for our clients. When you do that, they open your e-mail and answer your phone calls. We can start the conversation by saying, “Mr. Smith, what are you up to? We’ve got someone paying $4,000 to film a ranch home in Hidden Valley this week.” Then we might find out the Smiths are getting divorced and will be selling their house. We track these precipitating events to get us sellers and buyers. We look at divorce, job loss, relocations, inheritance, who has a movie deal, and who needs money. The location business builds the relationships, and that’s what the traditional agent uses to sell. Recently one of our location properties was in a commercial for a nutritional supplements company. The owner had a lot he wanted to sell for $5.5 million, and we are selling that.
Real estate agents and brokers are often referred to as commodities. I don’t like that word, but if we are commodities, you have to figure out how to differentiate yourself. You have to get creative and offer something no one else does. The location company helps us attract listings. We show up with a filming contract and I say, “I can make you between $2,000 and $15,000 a day while I sell your house.” At least 50 percent of our brokerage sales stem from the location business. Landing a shoot for a home owner is an amazing way to create value. Of course, we can’t make any promises, but we disclose how we market our locations and set a realistic expectation on how filmable a property will be.
My agents benefit because they make additional money from the location side and that gives them a smoother income flow. Since most film revenue comes in at the beginning of the year and the end of the year, our agents have money coming in all year.