Real estate alumni’s projects headline in Central Pennsylvania
For years, brothers Benjamin and Brian Myers have invested in local real estate, sometimes in partnerships that included their friend Preston Eberly.
While the partners had accumulated 70 apartments in about 15 locations in Lancaster city and county, they could still be considered small-time investors.
But that is changing.
“I know plenty of real estate investors that have done very well for themselves just slowly chipping away for 30 or 40 years. I have a lot of close friends that are taking that approach. It’s just not the approach we’re taking,” Brian Myers said.
Last month, the partners bought five apartment buildings in downtown Lancaster, with plans to expand three and upgrade all five in a venture costing about $6 million.
Through their newly formed company, Eberly Myers LLC, they are also proposing an apartment building costing about $4 million in Columbia, with an anticipated opening of late 2018.
“There is something to this community that is continuing to grow in vibrancy, and we want to be a part of that,” said Benjamin Myers, 36, who lives in Falls Church, Virginia.
Brian Myers, 40, who lives in Lancaster, and Eberly, 34, a resident of Conestoga, are both keeping their day jobs with a heating, ventilation and air conditioning sales and service company.
The younger Myers, who has a master’s degree in real estate development, quit his job as a real estate adviser for universities to concentrate on the Lancaster area projects. As part of the new venture, he is getting investors from the Washington, D.C., area.
What makes you feel comfortable about making these investments now?
Brian Myers: I think just demand. Anytime we put an ad on Craigslist to fill a unit, in a very short period of time, there’s a tremendous amount of people calling.
And just networking with other investors in the area, the demand is very, very apparent — and it’s increasing. There’s a shortage in housing, and there’s projected population growth and job growth right here in Lancaster city.
Eberly: The beauty of real estate is that none of it on its own is all that difficult. There’s a ton of details, but none of the individual details is that difficult. So if you have three guys that are similarly minded as far as ambition and ultimate outcome, and whose strengths lie in different areas, it makes for a pretty well-oiled machine.
Where do you get the money?
Brian Myers: We use our own capital. We use banks. We use investors. There’s been people that supply capital in order to get a return for their money.
Eberly: If we have a deal, we look at who we’ve talked to over the past several months or year and think about who it might be a good fit for, and approach them with it. The time to do that is before you actually have the deal that you want to bring to someone.
How does the Lancaster real estate market differ from the market in the Washington, D.C., metro area?
Benjamin Myers: For me to invest in the same sort of concept in the D.C. market, you’re talking millions and millions of dollars of upfront costs that you can’t finance because other people are paying cash for the property.
People aren’t buying things here for cash, which gives you the opportunity to buy a property that’s leveraged. The barrier to entry is lower.
Why are you investing so much in renovations and new construction?
Benjamin Myers: The real value to us is in the ability for us to control the quality of product we put in the building, which ultimately reduces our operating costs, which also impacts the value the tenant gets to experience on a day-to-day basis.
Was it risky for you to quit your job in the D.C. area?
Benjamin Myers: The more I applied education and my prior work experience in construction management, the more I really wanted to be the voice that made the call. Instead of trying to convince an owner that this was the right way to go, I really wanted to say, there’s enough value to do this, let’s go this direction.
What do you make of criticism that you’re contributing to gentrification that will force out lower-income tenants?
Eberly: The three of us own quite a bit of affordable housing in the area, and we don’t have plans for changing any of that. Simple economics would dictate that you can’t have inexpensive, affordable housing without having market-rate, premium housing because the class will just shift what’s available. We’re responding to a gap in the demand that’s growing across all classes.
Benjamin Myers: This particular model we’re pursuing, we’re trying to keep the rent as affordable as we can in light of the cost of new construction, without the subsidies of tax credits.
Why are you planning such a big investment in Columbia?
Brian Myers: We’ve held some real estate there for a number of years and feel like it is a sleeping giant.
Benjamin Myers: It’s incredibly well-positioned for a commuter but also provides amenities that no other location has in this area: access to river amenities, access to hiking and climbing.
If you haven’t been to Columbia, you would be surprised at what you’re finding, and in the next five years, it’s definitely a place you’ll want to consider for housing and for a variety of things.
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