There's gold in them thar hills

The media pundits are wringing their hands about how the recent mortage crisis is costing jobs and money, and what the government needs to do about it. I'm having deja vu and am salivating. This is looking something like the Resolution Trust Corporation (RTC) of a few decades ago. Major banking screwup and government solution (disguising a banking bail-out); it's an incompetence fest, begging for shrewd entrepreneurs to capitalize.

I've set a different course for myself at this stage of life, but can't help but noodle out the possibilities. Huge. Pick the less obvious niches and strategies, so you're not fighting over the carcass with the jackels, and count your bucks.

RTC was the government owned asset management company, mandated to liquidate the assets of financial institutions during the crisis of that time, primarily real estate and mortgage loans. Nothing could go wrong here.

It appeared custom made to generate some fortunes. I analyzed the metrics and an amazing stat jumped out at me. Banks now owned more hotels than investors and operators. This was due to massive foreclosures.

The too obvious move was to buy hotels cheap from the banks. The better move was to wait for the RTC to intervene in a deal, and muck it up, and buy the properties from them even cheaper. I did some of that, but it still leaves you investing money and having to operate hotels; no small feat.

The really lucrative opportunity appeared to be property management, and this turned out to be the case. The strategy was to approach banks stuck with all these properties they didn't know how to operate. The pitch was that they couldn't sell them in their current operating condition, so you would manage the properties for them, managing them into salable shape. Of course, you'd use management from your current hotel ops to do this, so you were essentially adding revenue stream without much incremental cost. Almost pure profit.

Some would jump into this market and go one step better. Or worse, depending upon your moral compass. They would hire management for the hotel properties on the bank's dime, but use them for their own properties. Free personnel.

Economic crisis doesn't mean no one will make money. It means the clever ones will make more.