Comedian-turned-banjo player Steve Martin had a joke early in his career about how to become a millionaire. “First,” he would state in a serious tone, “get a million dollars.”

There are, of course, many other routes, including real estate. Conversely, real estate investment can be a quick road to losing $1 million or all that the speculator has to lose.

There are various types of real estate investments, just as there are a variety of stocks, bonds and or savings accounts.

In Nashville, with its current growth and projected bump Amazon’s arrival in Nashville Yards and the Ernst and Young on Music Row will bring, the rental market should be stable. As is always the case, location, price and condition should be key factors in the decision.

Condominiums with strong homeowners’ associations and updated mechanical systems and appliances offer the novice, non-DIY types a safe window into real estate investment.

There is a relatively new means of investing in real estate that has become popular, although it is more complicated. Legal and accounting advice are highly recommended when considering this option.

The new kid in town is investing in real estate through an SEP, or simplified employee pension, which is an IRA or individual retirement account for a self-employed person.

After the Recession-induced crash, flipping came into vogue and is still all the rage. But there are fewer and fewer opportunities, as the flippers are several years into their invasion and bad houses are becoming more difficult acquire.

The prevalence of “We buy ugly houses” and “We pay cash for your home” signs indicate that technique continues to produce unwitting, naïve sellers.

It should not offend a seller if a buyer purchases a home with the intent of renovating the house and selling for a profit. That situation does not define the transaction as a bad deal.

If the house is lacking in some of the important areas such as master bath and kitchen, it’s a prime candidate for flipping, even if it is otherwise pristine.

When the feedback from the showings reflects the need for updates, sellers have the option of making the updates and repairs themselves in hopes of reaping financial gain on that investment. If the seller has neither the time, the financial wherewithal nor the expertise to oversee the project, the seller should take the money and run. Let the investors have all the fun they can.

More often than not, there are cost overruns causing budgets to be exceeded over and over, the completion of the work is delayed thereby accruing more costs as far as interest payments and insurance, and the property sells for less than the new owner had hoped.

And there is always the possibility of fire, flooding, or wind damage.

Additionally, as Hunter S. Thompson once said, “There’s also a negative side.” His quote was not a reference to real estate, but it fits, nonetheless.

The advice of most investment bankers and wealth management experts is to invest long term. The same is wise for real estate.

If financing is involved, the borrower should be able to make the payments if the property is vacant. For this, many investors and lending institutions assume there will be a 25 percent vacancy rate.

Investors should research the time that would be required to liquidate if the need arises. Developments with several sales each year normally experience greater appreciation than those in which there are no sales. A development with no sales during a three-year period does not necessarily indicate that the owners all love their properties. The lack of sales could be that conventional financing is not available on that development for some reason.

There are property management companies and individuals that can alleviate the stress of collections, repairs and complaints. They usually earn their fees, but they blow through thousands of dollars – the owners’ dollars – in repairs if they are not competent.

Allowing a third party to pay a property owner’s mortgage and taxes is a sound practice, especially if the property is appreciating. With relocations aplenty, renters are coming.

Sale of the Week

Perhaps someone on Music Row should contact Steve Martin to have him amend his joke. There is another way to get $1 million, or at least there was. The condominium at 917 Silkwood Circle sold last week for $345,000 after being purchased for $88,915 two years ago.

Located in a development known as the Enclave at Harpeth Village, some of the owners paid even less the year before and could make $100,000 on their investment.

Tax records show the seller at 917 Silkwood invested $16,000 as a down payment. It is safe to assume there was little if any renovation performed since the units were new. Consequently, the seller had a tidy return.

In response to Mr. Martin’s question of how to make $1 million, the answer would have been to buy 16 units in the Enclave at Harpeth Village.

Molly Mitchell Copeland of the famous Copeland real estate family was the listing agent. She is the wife of Brad and sister-in-law of Brian. The Copelands have won Realtor of the Year and rookie of the Year honors, as well as having led the local, state and national Realtor organizations.

Molly is affiliated with the family owned Doorbell Real Estate, a relatively new, progressive, tech-savvy firm that was opened by Brian Copeland last summer. All of the Copelands cut their real estate teeth at the firm formerly known Village Real Estate Services, which has taken the PARKS lead and is now VILLAGE.

Just to show there are no hard feelings when this sort of spinoff happens, the renowned Andrea Franden of VILLAGE represented the buyer in this transaction. In two short years, Franden will sell this condo for at least $445,000 if the new owner is so inclined.

Richard Courtney is a licensed real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at [email protected]