Office Space buy & hold investment.
Purchase price: $400,000
Cash invested: $20,000
7000+ square foot commercial building - 4 office spaces and 1 studio apartment.
What made you interested in investing in this type of deal?
It was a value-add opportunity in the sense that the rents were significantly under market and all tenants were on 1 year leases.
How did you find this deal and how did you negotiate it?
One of the clients for my insurance agency owned it and we began talking about his interest in selling it.
How did you finance this deal?
A mix of seller-financing and bank-financing.
How did you add value to the deal?
We knocked out walls to turn 4 small office spaces into one large "conference room" specifically for one tenant. We began getting $1,000 more per month from just that one space.
We also raised the studio apartment rent by $50/month.
What was the outcome?
We still own the property today and it's cash flowing nicely!
Lessons learned? Challenges?
Cap-ex on commercial space can be pretty high, very important to put a large amount aside for random things!
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