I Bought a School (How Did This Happen?!)
Have you ever had a dumb idea that you thought was amazing—until you realized it wasn’t?
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Those who said yes likely didn’t follow through with the idea. Well, I did.
Let me tell you about the most interesting real estate purchase I ever made.
It Started With a Story in the Newspaper
I can get erratic at times with purchases. This comes from my background in wholesaling.
As a wholesaler, you can take chances and then let your end buyer take the risk. Well, this purchase I was the end buyer—and man, was I taking a risk.
Before we get started, let me provide the backstory.
My wife and I were looking through the local newspaper. On the first page, there was an interesting article detailing how a local school district needed to sell or raze a turn-of-the-century school building.
I paid it no mind, but my wife is a property scout when it comes to real estate bargains. Her first comment was, “This is a very attractive-looking building. We should buy it.”
No comment on what I was thinking. It’s the wife though, so I said, “Oh,” and didn’t give it much more thought.
“Why would she have found the article interesting?” you may be wondering.
Our family not only is involved in real estate but we also operate a successful non-profit about 45 minutes south of Chicago. It’s in a midsize, working-class community called Kankakee. She saw the former school building as an opportunity to help with the agency’s expansion into providing daycare services.
I have to say my wife, my mom, my brother, and my sister-in-law can always find ways to help people. I, on the other hand, enjoy helping others, of course. But my head is always focused on real estate.
Then My Wife Twisted My Arm
I figured since the school district had to sell or raze the building, it must be in serious need of repair. See, this is how it always happens. She throws out an idea, and I can’t help but to analyze it. My mind is just wired that way.
This was her first step in getting me to show interest. Verrry clever, Mrs. Maloney.
She spoke with the school district, inquiring about the building and gauging how they were receiving offers. The whole time she was working on this I had no clue. (Dumb husband…)
The school district was going to do a blind auction. But one of the school officials slipped and stated there were no offers on the table (so my wife says).
By then, she had pulled me in the building. Just from a walkthrough, it looked solid.
Then My Whole Family Peer Pressured Me
I couldn’t do what I would normally do in this instance—run numbers, create my exit strategy, create a rehab budget. You know, all the typical things a fiscally sound individual would do on a project. This was completely different and out of the box.
A day care?! What were we going to do with a day care?
The other four (wife, mom, brother, and sister-in-law) said, “Fill it with kids. Let’s continue to help the community but in a different way.”
My wife and sister-in-law had experience running a daycare, and they saw the opportunity where I couldn’t see it. Mike (my brother) was on board once he evaluated the potential and did his research. I was still focused on the exit strategy and potential rehab and holding cost.
But eventually, they won. I decided to do it.
I focused on financing and the building rehab. They followed the pro forma they created for child care equipment, marketing, staff, and other essentials.
I Got on Board and Dove In
As scared as I was, I went to the blind auction. My wife was right; it was only me there.
So then, I really began to panic. “I’m the only one trying to buy this thing?! There has to be something the inspector and I missed.”
Suddenly, my investor senses kicked in. I had the thought that since I was the only one there, we could probably get the property cheaper.
I submitted the bid, left the auction, and drove straight to my new project—because I knew we were going to get it! And we did.
Now We Own a School
I’m glad we made this purchase. My sister-in-law runs a very, very profitable daycare. Once we purchased this property, it expanded even more.
When I’m in town, I always stop in on school days. I like to see the children playing on the playground and to witness how this place created jobs within the community. The kids are happy, my family is happy, and the property and the business are very profitable.
Fortunately, everything worked out.
What would you have done in my position? Do you have any crazy real estate stories like this?
I’d love to read them in the comments below!