Tolliver's positive real estate approach
Should there be an NBA lockout this summer that ends up eliminating part -- or all -- of the 2011-12 season, Anthony Tolliver already has a full-time job to which he can transition. And given that players aren't paid their salaries during a work stoppage, Tolliver could be one of the few NBAers who maintains a consistent source of income during a lockout.
Tolliver, 25, a third-year forward for the Minnesota Timberwolves who majored in finance at Creighton University, has helped run a real estate business, Say You Can, LLC, since April 2009 in his hometown of Springfield, Mo. It's an unusual venture for a basketball player, or any professional athlete. The closest most athletes get to real estate is when they hire a broker to help them find a new house or condo. Yet the field is one in which Tolliver knew he would have a future.
"Real estate has been something I've been interested in for a long time," Tolliver said during a recent phone interview. Toward the end of his high school career, several of Tolliver's friends became home and condo owners through purchases made with help from their parents. That initiated his interest in home ownership. While attending Creighton, located in Omaha, Neb., Tolliver felt that he had a future in professional basketball; he figured the ability to make a significant amount money and an understanding of how to manage it could make him successful in real estate.
"I didn't know I'd make the NBA, but I knew I would make money in basketball," Tolliver said. As he began playing basketball overseas in 2007 and then in the NBA starting with the 2008-09 campaign, Tolliver and a high school friend from Springfield, Kelly Byrne, discussed opening a real estate firm.
Byrne had completed multiple internships at real estate companies when he attended St. Cloud State University in St. Cloud, Minn. After his graduation, Byrne worked as a project manager for a local real estate company in Springfield. That experience encouraged him and Tolliver to go into business for themselves in early 2009.
"He obviously has the time and expertise to do it," Tolliver said. "At the time, I was playing professional basketball and I had some good capital coming in." That income included more than $213,000 in salary during 2008-09 playing for the San Antonio Spurs and New Orleans Hornets and more than $408,000 in stints with the Portland Trail Blazers and Golden State Warriors during 2009-10, according to basketball-reference.com.
They initiated their investments in Springfield at a gradual pace, but their focus was strictly on single-family homes. Springfield is a town of nearly 160,000 in southwestern Missouri, roughly 70 miles east of tornado-ravaged Joplin. Springfield, like many towns in the Midwest, is not one of extravagant means.
The per capita income for Springfield residents during 2008-09 was $31,496, according to the Bureau of Economic Analysis at the United States Department of Commerce. The average home sale price in Springfield reached $150,000 in 2007 before decreasing to $131,654, according to the Greater Springfield Board of Realtors. That helped drive Tolliver's wish to buy homes at low price points, upgrade them to a livable situation and then sell them for a modest profit.
"I think it's a great thing that he is doing," said Tammie Tucker, a real estate agent with local A.R. Wilson Realtors and the president of the Greater Springfield Board of Realtors. Tucker described Springfield as an economically stable community in part because of its large medical and education systems, the latter of which educates close to 50,000 students through 16 colleges and universities. As noted by Tucker and Tolliver, the greater Springfield real estate market doesn't experience sharp increases in home prices. Yet its stability is what has helped home prices stay relatively secure during the ongoing housing crisis throughout the United States.
Say You Can grew at a more rapid pace once Tolliver signed a two-year, $4.25 million deal with the Timberwolves during the 2010 offseason. That allowed him to take on more Springfield houses, of which Say You Can is operating six. The homes are typically 1,000- to 1,200-square-foot structures for first-time home buyers. Say You Can has started to sell them in owner-financing deals, which Tolliver noted was necessary given the difficulty prospective buyers in their target market have securing a bank loan. The home prices vary.
Byrne cited a higher-end property that Say You Can obtained for $42,000 in mid-April and will put on the market for roughly $130,000 in mid-June. Say You Can made $40,000 in renovations on the 2,000-square-foot house, including reconditioned hardwood floors, new bathroom tiling and granite countertops. "For the most part, we go in and do a lot of serious work," Byrne said of the company's renovation strategy.
Tolliver described another house that was bought by Say You Can for $45,000; the company invested $3,500 into it -- what Tolliver deemed a week's worth of work -- and sold it in an owner-finance deal within a week and a half for $69,000.
It's rewarding to know we're in Springfield (Mo.) and going into neighborhoods that aren't the luxury neighborhoods and that we're fixing up properties.” -- Anthony Tolliver
"It's rewarding to know we're in Springfield and going into neighborhoods that aren't the luxury neighborhoods and that we're fixing up properties," he said, noting the positive effect a renovated house will have on the property values of other units in the neighborhood.
Tolliver, who educates himself on the real estate market by reading books and maintaining a network of industry experts, has expanded his venture to Richmond, Calif. A town of more than 103,000 situated between San Pablo Bay and San Francisco Bay, about 10 miles north of Oakland, Richmond's housing market collapsed during the 2008-09 recession. According to city-data.com, the median price of a home sale in Richmond during the fourth quarter of 2006, a boom period for U.S. real estate, reached $450,000. By the second quarter of 2009, the median price for a home sale bottomed out at roughly $120,000.
Tolliver has used an independent LLC, separate from Say You Can, to acquire a four-plex in Richmond for $260,000; a separate $250,000 deal for a similar four-plex is pending. Each property was presented to Tolliver through a real estate broker who owned an Oakland-based condo at which Tolliver lived when he played for the Warriors; Tolliver said each four-plex would have sold for approximately $750,000 in 2006. Now, he thinks he'll be able to enjoy the rise in property value while each complex essentially pays for itself. "As long as I can pay my mortgage with the rent coming in, then I'm fine," he said.
Tolliver has used an independent LLC, separate from Say You Can, to acquire a four-plex in Richmond for $260,000; there is a pending sale for a similar four-plex for $250,000. Each property was presented to Tolliver through a real estate broker who owned an Oakland-based condo at which Tolliver lived when he played for the Warriors; Tolliver said each four-plex would've sold for approximately $750,000 in 2006. Now, he thinks he'll be able to enjoy the rise in property value while each complex essentially pays for itself. "As long as I can pay my mortgage with the rent coming in, then I'm fine," he said.
When combining the properties in Springfield and the four-plex in Richmond, Tolliver estimated he's personally invested between $250,000 and $300,000 for a collection of properties with an accumulated value he pegged as north of $1 million. Tolliver will continue his investments in Springfield through Say You Can, and he'll use his independent LLC to help grow his portfolio of properties. He's also forming a group of NBA players who wish to pursue real estate investments.
"It's basically a fund I'm going to create, starting with my teammates and former teammates, to come together and invest in bigger commercial buildings," Tolliver said. He hopes to set up the group by the end of the summer, with the initial investment focus in California, Arizona, Florida and Nevada, among other states. The idea, as explained by Tolliver, is for a group of players to find properties with strong growth potential that don't require any one person to make a sizable investment.
Even as Tolliver enters the prime of his career, he is looking long-term to set up himself financially whenever his career ends. As the NBA's labor negotiations continue, Tolliver has at least assured himself that he'll have checks rolling in, even if they're not coming from his day job.
Kyle Stack is a freelance writer in New York City who also contributes to ESPN The Magazine.