What’s Better? Flipping Real Estate Or A Medical Patent? Let’s Take A Closer Look.

Medical Patents Broker Inc.
By Kenneth Pearce, President

🏢 Real Estate

There is no doubt that in the United States, real estate is a gigantic industry. Current estimates indicate it accounts for 11% to 13% of our GDP. That’s number three in the Big Dance.

I have listened to people swear by real estate, saying, “It’s the best investment there is. There is only so much of it, and it doesn’t move.” A close friend of mine, who has since passed, was a member of a syndicate that bought land well in advance of where they believed a new interstate interchange would land. Those were long-term flips, but they were incredibly profitable for my friend.

There are many kinds of shorter real estate flips marketed today. Several times a year, someone I don’t know offers to pay cash for my home—no questions asked. Sometimes, those offers are even addressed to my father, who died more than fifty years ago and never lived in the county where my home is located. Those pitches prove that outdated mailing lists can live forever.

🏥 Healthcare & Social Assistance

The Biggest Dog in the U.S. economy is healthcare. It’s number one, commanding a whopping 17% to 18% of GDP. That’s a lot of zeros behind the numbers.

How does a medical patent flip align with such a massive medical economy? It serves as the absolute foundation for healthcare advancement. Still, just because healthcare is the largest segment of the economy does not guarantee that an invention will actually reach the patient. Lots of zeros without execution is still zero.

⏳ The Medical Patent Lifetime

Similar to a patient, the remaining life of a medical patent decreases every single day. If you want to pull off a successful quick-flip of a medical asset, it must be pitched with pristine information and data. No puffing allowed.

The Sweet Spots For Flipping:

• A) No FDA Certification or Approval: Ideally, these medical inventions need at least 15 years of patent term remaining (with the potential for Hatch-Waxman extensions down the road) when the medical patent is purchased.
• B) 510(k) Certification Pathway: For devices tracking a standard 510(k) pathway, the asset should ideally be acquired before there are fewer than 12 years of patent term remaining.
• C) Clinical Trial Phases: For medical inventions still navigating active clinical phases or studies, it requires a strict, case-by-case determination of risk versus reward.

📈 Improving Your Odds on the Medical Patent Flip

• Get in the Game: Some FDA interaction is always better than standing entirely on the sidelines.
• Look Ahead: Some forward-thinking about CMS reimbursement is better than waiting until the end.
• Capitalize: Adequate capital is always better than running on empty.
• Disrupt the Market: Secure a 510(k) and build the team necessary to outrun prior similar devices and change current hospital buying protocols.
• Utilize Media: If you can afford it, leverage major media to advertise. It seems like half of the broadcast ads on television today are medically related. Potential deadly side effects are listed, yet the sales just keep rolling on. Pain, illness, and the fear of death are great motivators.
• Be the Big Fish: It is easier to dominate a small pond. For Class III devices or Phase I/II studies, looking for the road less traveled can render amazing results.
• Prove the Concept: Creating a valid proof of concept makes it much easier to offload the patent to a larger company equipped to cross the finish line, or to other investors looking for an even shorter quick-flip.
• Proximity Equals Value: As a general rule, the closer a medical patent’s invention is to actual patient use, the more valuable it becomes.
• Unlocking Future IP: After a quick-flip, the new owner has the opportunity to discover new uses and better structures for the invention, which can generate entirely new medical patents.
• Split the Portfolio: With newer medical patent portfolios, an owner can flip one asset to generate immediate cash flow and hold onto another for long-term value.

🎽 The President’s Viewpoint

As to whether real estate or an IP portfolio is better for a flipper, it depends entirely on the market at that time. Both types of assets can sink, or they can soar to new heights. Barring an earthquake or a sinkhole, land rarely changes much.

One time, I did a quasi-flip on a home I lived in for a few years. I made many of the improvements myself. It was hard, grueling work that ultimately yielded a profit of only a few thousand dollars. It was a learning experience for me. No more flipping houses.

For Medical Patents Broker Inc.’s clients, I prefer a better strategy. I want them to receive a healthy, sophisticated return on investment for listing with MPB—and allowing us to initiate the flip.

However, I am told that a medium-sized office building in today’s Manhattan, in better than average condition, can fetch about $200 million. Still, a cure for most cancers could foster a multi-billion global market.

Which one do you think is better?