New-York tribune., 1907-11-13
OPERATING In REALTY
An IMPORTANT BUSINESS.
r. Il. Simon Says Those Who Are
Thus Engaged Create VdIues.

Robert Z. Simon. vice-president of the Henry
Morganthau Company. spoke last night at the
real estate school Of the West Side branch OF the
Young Mems Christian Association No. 800
West 57th street on THE Operators Method OF
Handling and Improving Real Estate" He said
that the operator was an important factor in
every part Of the country. He does things,
either directly indirectly, by his ideas or with
his capital He creates values and increases
the borrowing capacity,o OF the city by increasing
the tax valuation Of property. Mr.. Simon fur
ther said:
''The real estate operator is one who has mace
the buying, selling and improving of real estate
his business. Many people have the mistaken idea
that an operator is e speculator, but TINS Is not
so. In order for him to be successful. the real
estate onerator must make q thorough study Of
what goes to make I'D land values, and must
never purchase a piece of property unless ne
knows beforehand just what he is going TO 90
with It, or what II is adaptable for, or whom ne
could Interest in it by demonstrating posslplh-
ties which have not been previously apparent
.eThe real estate operators can be divided into
tbraa classes: Those that confine their pur-
chsses TO one particular section; those that puf-
chase one class of property, or property suitable
for one class of improvement only pul are not
restricted as to location. and those that pur-
IN handling improved property, the operator
tries to increase the income by either raising
the rents or decreasing the expenses, in order to
be able to resell at a profit For instance, IN
purchasing a hathouse built under the old law
he may put in steam heat and hot water supply
and thus Increase the rents. He may take
building without stores, and by taking out the
first floor and putting in stores increase lhe
value of the property. He may take building
with d hydraulic elevator necessitating
licensed engineer and consuming much codl
summer and winter and change it to an electTlc
elevator. These changes are constantly going
on around u.s. but we do not stop to think VINO
is behind them. nor do We consider the added
comforts afforded the community thereby.
Again. in handling private dwelling, an Old
antiquated high stoop private house will be
taken in hand by the operator, an extension put
on. electric light installed throughout, modern
plumbing, and in some cases 1t may even DC
altered from q high stoop TO an American base
rnent The private house is the one exception
where the operator does not look for income
He very rarely rents private house unless he
has passed the season for selling and does not
wish TO burden himself with the expense OF car
rying the house vacant. The reason for this is
that it is very difficult TO sell private dwellings
when they leased"
The same alterations and changes hold good
with business buildings A store may be bring
ing $50 a month BY putting in r modern win
DOW in place Of the old-fashioncd one the rent
may be considerably increased OF course, quite
frequently the operator viii purchase a build
ing which needs no Improvement because he
sees the march OF improvements will. within
reasonable time. change the uses TO which the
property is being put, and materially increase
the income, make il adaptable Tor entirely
new purposes. il which case his profit VIII be
on the land and the building VIII be torn down.
In such case it Is important for the operator
not 10 make a long lease. but TO sacrifice tenn
porarily the income and take less rental and
have q clause in the lease providing for can
collation. on notice.
The operations in vacant land usually
divided into three cIasses-lots, plots and acre
age The operator purchases the lots. and If he
does not sell them for u cash proift ne usually
makes a building loan This means that he
gets certain amount for the land and agrees
in addition thereto to advance a certain amount
toward the construction Of the building. In
financing these operations the attitude OF the
operator varies. Some purchase the lots ana re-
sell them as means Of keeping their addluohal
canital eInployed at per cent in the shape Of
building loans. Those operators who are not
so fortunate as to have the capital necessary to
where, either III It's entirety-Or in part. Oc-
casionalIy the operator viii find that the in
stitutions will not lend much as they had
agreed to lend in which case he arranges TO
take care Of a part of the building loan him.
self, and every time a payment OF a certain
amount is made ne also makes a payment OF
4 lesser sum. Sometimes he agree 10 go behind
the building loan. That means that ne will take
portion of the purchase money mortgage and
make a second mortgage Of it when the build
ing loan is put record, thereby guaranteeing
the lender Of the money that the operation will
: be successfully carried out. In thus financing
building operations 1t is necessary for the
operator to see the plans and specifications, not
only to protect himself by seeing that the cost
of the building will be such as to warrant the
! loan he is making but also to see that it is
the proper building for the neighborhood, so
that it will rent and d substantial first mort
| gage be procurable on completion"