6 Bizarre Real Estate Opportunities

TOPEKA ( TheStreet) -- Edward Peden went underground.

He and his wife, Dianna, live in a refurbished Atlas E underground missile silo site near Topeka, Kan.

You can too, by the way. Or own a golf course or run a strip club. There all sorts of unlikely living or business situations out there that people might consider, well, off the map, and buyers just have to know where to look.

The Pedens' unusual living arrangement came about more than two decades ago, when the private owner of a former missile site approached them, as real estate brokers, with a business proposition. He was moving out of state and asked their help in facilitating a sale.

The Pedens arranged an "option to buy" on the property, agreed on a price and found a buyer. The deal proved unique and profitable.

"We liked it," Peden says. "We began to track down the owners and begin to negotiate and hold options and sell more of these properties."

That led to the formation of their company, 20th Century Castles, which specializes in this unique type of real estate, and the decision to live in one themselves.

Researching the history of the bases throughout the United States, the Pedens found many had long since been decommissioned and are owned by cities, counties, school districts, water companies and a few commercial entities. Thus far, he has brokered the sale of 49 properties.

These silos are proving a unique option for more than just residential properties. Jackson Heights School, a Kansas high school, is inside an Atlas E missile site built for $3.3 million in the early 1960s and abandoned in the late 1970s. The school district bought the complex for $1 from the government. The missile bay has become a bus garage, the command center transformed into a classroom.

Subterranean life has its challenges -- good luck trying to use a cell phone under three feet of earth and 18 inches of reinforced concrete -- but Peden says it's worth the adjustments and maintenance challenges.

"Some of them have been deserted for many years," Peden says. "Some have been flooded. The room I'm sitting in now has a one-foot ceiling height, but it had eight and a half feet of water when we purchased it. But they are million-dollar structures. The taxpayers paid billions to build these things, and they are some of the strongest structures ever built."

The Pedens' underground home offers roughly 20,000 square feet of space and includes 34 acres. He has added a greenhouse and an apartment unit for guests above ground. A private airstrip runs alongside the property.

Over his 16 years in this business, Peden -- who has 10 sites for sale across the country -- has seen these bases prove to be one of the few real estate investments to grow continually in value.

"These are in very limited supply, and there are not going to be many more things like this built and offered to the public. All of the missile sites now that are being decommissioned and coming offline are being imploded and destroyed because of treaty agreements. With the older sites -- and they are the bigger, more interesting ones anyway -- there is a very fixed number of these, and it's a strong asset that is growing in value. There are numerous people buying them for the tremendous investment potential they hold, and then others are really just looking forward to a safe haven, underground, nuclear-proof bunker to live in."

"There is a growing fear and uncertainty in the country, and we are getting more calls and emails than ever wanting an underground structure," he says. "The earthquake in Japan and the talk of radiation in the atmosphere makes people nervous. Being underground is definitely a safe, very strong place to live."

So what will that sense of security cost you?

Peden says he initially sold sites for around $50,000, with only a rare few reaching close to $100,000. Today, "there is nothing under $100,000, and it's difficult to find anything under $200,000."

"We find that if you put materials and labor into the refurbishment of one of these structures, the value just soars," he says. "Some that have been worked with are now selling in the million-dollar range. We have a property for $2.3 million, another one for $2.8 million. The value can just really go upward as these are cleaned up and made useful."

Cold War-era bunkers aren't the only unique deal out there that the typical Realtor would be hard-pressed to showcase in the local Pennysaver.

Here are some other specialty properties looking for unique buyers:

Amusement parks
Summer is on the way, and it will soon be peak season for theme parks and water slides. Some may be looking to go beyond buying a season pass and investing in these fun spots itself.

The recession has been rough on theme parks. Travel is down, and so are receipts at the gate. Rising gas prices could have a less-than-thrilling impact on those smaller, rural family-run parks that lie outside most tourist destinations -- the gator worlds and Christmas-themed petting zoos of the world.

If you want to buy one, do some research. Seek out local newspapers online, refining your search to uncover stories about struggling parks, foreclosures or decisions to sell.

Keep your focus as local as possible so you understand the market potential. You'll undoubtedly come across online sites and listings looking to sell equity shares in Russian and Eastern European amusement park startups and franchises. Even if they are legitimate, the price is high and prospects risky.

Don't assume only big parks are out there. The marketplace includes smaller, indoor locations in malls and at strip malls. They may be little more than arcades, but the right one could prove a potential opportunity.

To find opportunities, keep up with the trade publications and such professional organizations as the International Association of Amusement Parks.

Among the listings we came across in our search was an amusement park for sale in Nebraska. Established in 1980, it includes go karts, water slides and miniature golf. Total assets include $24,000 of inventory, $821,000 of equipment, vehicles, fixtures and furnishings, and buildings and land valued at $500,000. The asking price is $1.1 million.

We also found a 15-acre dinosaur theme park in Michigan that once featured a train ride, fake volcano and 35-foot waterfall. Included in the $548,000 asking price: an arcade, gift shop and 100 fiberglass dinosaurs.

On a far larger scale, earlier this month it was reported that NBC Universal -- or more accurately Comcast ( CMCSK) -- may need to shell out upward of $1.6 billion to buy the 50% stake in Universal Studios Florida theme parks private investment firm Blackstone Group ( BX) is seeking to sell by a June deadline. Failing to do so would open the door for private equity investors.

Strip clubs
Naked women, check. Beer, check. Cheesy DJs playing Motley Crue. Check.

If the above define your idea of either a good time or a great investment, consider buying a strip club.

To be sure, there are not many mom and pop strip clubs left these days. Many are owned by chains with recognizable brand names.

Be prepared for a fight, though.

Cities and towns typically want no part of these establishments and can be counted on the use zoning restrictions and their power over liquor licenses to keep you from raising your shingle. Be prepared for the added cost of lawyers to get the deal done. Buying a club may take being a partnership

One online site offering advice to would be stripperpreneurs is not to fall into the trap of thinking of this as a real estate transaction, not a business deal. Among the questions to ask: Are accounts receivable included in the sale? Are there liabilities on the books? Is the liquor license transferable?

Golf Courses
From an investment standpoint, golf courses are a much different beast than traditional real estate. Houses, apartments and commercial real estate can, of course, fluctuate in price and occupancy. Golf courses have the added challenges of greater maintenance needs and rely on revenue streams less quantifiable than a monthly rent check. Unseasonably rainy weather? Your ROI takes a hit.

The economy has also been unkind to the industry. Industry statistics show fewer people playing fewer rounds, a byproduct of recession-era belt tightening and the ongoing need to attract younger aficionados.

The courses, clubs and surrounding land are not always bought by one deep-pocketed entrepreneur. Many are sold to partnerships and private companies. Financing is often by such specialists as Textron Financial, and other Wall Street investment houses are increasingly among the players -- in both senses of the word.

What's out there to buy?

CB Richard Ellis' Golf & Resort Group has brokered $750 million golf course deals over the years, including master-planned golf communities and golf resorts, private country clubs, daily-fee golf courses and raw acreage for development.

Among the available properties it represents:
  • With an asking price of $4 million, the Cathedral Canyon Golf & Tennis Club in California's Coachella Valley, between Palm Springs and Rancho Mirage, the deal includes the long-term leasehold for the golf course as well as 10,000-square-foot clubhouse, maintenance and practice facilities and 10 hard-surface tennis courts.
  • San Diego's Mt. Woodson Golf Club, with an asking price of $4.8 million, is along the base of a 2,884-foot mountain peak. The course was designed to take advantage of "unique elevation changes, numerous rock outcroppings and mature oak trees."
  • Black Bull, "an award-winning, master-planned mountain golf community," is a 483-acre development planned for 378 custom and developer-built club homes. Trustees of the U.S. Bankruptcy Court directed CB Richard Ellis to solicit overbids to the $8.1 million "stalking horse offer" (a selling price reached by testing the market at auction).

Funeral homes
You won't find a Sunday morning open house at the typical funeral home. In keeping with the overall atmosphere of these establishments, offerings will surely be a bit more discreet.

The reality, however, is that there is brisk business in the buying and selling of mortuaries, funeral homes, crematories and even cemeteries.

Unlike churches, which are increasingly being bought for condo conversions, most funeral home sales are business deals.

Once again, reading trade publications, magazines and contacting trade organizations will help find leads. There are also specialized brokers, such as New York-based American Funeral Consultants, that specialize in funeral home transactions. Among the services brokers can offer is crafting an Earnings Before Interest, Depreciation and Taxes Report to value the business and negotiate a price.

Railroad Stations
Love trains and railroad stations? With old-school rail service a thing of the past in many communities, these terminals and station houses do occasionally find their way into the open market.

Research can help find one, or at least reach out to the network of like-minded aficionados. Sites such as the Railroad Station Historical Society can be a starting point.

Local real estate agents may be able to help. Because many stations have been out of service for years, they have already been repurposed by restaurants, coffee shops, galleries and hardware stores. Added expense may be needed to restore some of the historical flourishes, but the sites themselves are not all that rare, and many are listed through traditional brokers.

On a larger scale, sites including the shuttered Michigan Central Depot, designed by the same architects as New York City's Grand Central Terminal, are available for private development. The Detroit station, spared from a wrecking ball, may soon undergo renovations.

As for turning a railroad station into a living space, the cable channel GHTV recently featured a one-time depot in Vermont that has since been listed with an area broker for $199,000.

-- Written by Joe Mont in Boston.

>To contact the writer of this article, click here: Joe Mont.

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