NBA players schooled on real estate investing by former stars
Warned to be cautious of "cutthroat" investors
For most NBA players, their playing careers are over just as the rest of us are settling into our chosen professions. The difference between them and us (in addition to, you know, athletic ability) is that, in some cases, they’ll retire in their mid-to-late-30’s with a lot of money and a lot of time on their hands.
So what will they do with their money and their time? For some former players, investing in real estate becomes their game of choice, but that game comes with a lot of risk.
Earlier this week, a group of NBA players met in New York for the National Basketball Players’ Association’s second annual real estate symposium.
On the agenda was a discussion led by two former stars, including former All-Star Danny Granger, on the potential pratfalls that current players need to be on the lookout for if they’re interested in investing in real estate.
TheRealDeal.com has the full story on the summit.
In his final year in the NBA, Danny Granger took home more money from his real estate investments than he did from his Miami Heat paycheck. “That’s when it really, really hit me,” he said Monday. “What am I doing? My knees hurt, my back is killing me. That was it. I was done.”
Granger’s audience of professional basketball players erupted in a knowing laugh. Some of the veterans, like Steve Blake and Kevin Martin, knew only too well the pain of hitting the wood day after day. Others, such as Atlanta Hawks star Paul Millsap, are still in their prime, and still others, such as Boston Celtics player Kelly Olynyk, only recently broke into the NBA. Age differences aside, the players had two things in common: they made a lot of money playing basketball and they are thinking of putting some of it into real estate.
Granger was joined on the panel by former Los Angeles Lakers forward Devean George and David Eyzenberg, who, according to TheRealDeal.com, is the founder of real estate investment banking firm Eyzenberg & Company and an adjunct professor at NYU and Columbia.
Granger, George, and Eyzenberg cautioned the players in attendance on the potential for being taken advantage of, and the opportunity that exists to turn the tables.
Again, from TheRealDeal.com:
“These dudes, they are cutthroat,” Granger said of some professional property investors. “You always gotta be careful because they will try to screw you the quickest way possible.” Granger found that real estate pros often assumed he was stupid because he was an athlete.
“I always used that to my advantage,” he said. “I wasn’t dumb and stupid. And it’s helped me in deals where they just kind of underestimated me.”
TheRealDeal.com article states that the NBPA began offering the real estate investment seminars in the wake of many published reports of former players losing millions (or in some cases, hundreds of millions) due to bad advice or bad actors.
One of the bad actors is former University of Connecticut basketball star Tate George, who was sentenced to nine years in prison for “orchestrating” a $2 million real estate Ponzi scheme.
According to the Department of Justice and the U.S. Attorney for the District of New Jersey, George allegedly told prospective investors, including several current and former professional athletes, that his firm would use their money to fund the George Group’s purchase and development of real estate projects, and personally guaranteed a return on their investments, with interest.
Granger and George told the players in attendance that there is money to be made in real estate, and that it can be done safely.
Again from TheRealDeal.com:
Like Granger, Devean George got started in real estate with the help of partners who knew the ropes. He now runs a real estate firm that buys, develops, flips and holds rental properties in markets like Minneapolis, New Orleans, and South Carolina.
“I had a couple of close calls where I didn’t do my due diligence,” he recalled his early days. He soon learned.