Industrial other investment.
Purchase price: $2,675
Cash invested: $400,000
Leased commercial building to create a much needed small engine repair shop & commercial landscape business in Panama City Beach, Fl. Sold my condo to pay off initial investment / start up costs; hurricane Michael hit 11 days later. It's been a wild ride, especially losing both grandparents and husband having a stroke, but we are still here and going strong with clients from all over the county bringing their equipment to us for repair!
What made you interested in investing in this type of deal?
Husband owned a landscape company and we couldn't source high quality equipment or get it repaired locally at a reasonable cost or in a timely manner. We decided to fix that.
How did you find this deal and how did you negotiate it?
A local realtor helped us find the right spot on a main hwy with 55k cars / day (Back Beach Road / Hwy 98). Our landlord needed to get rid of the space; we locked into a 3 year lease right away when we heard the negotiated price.
How did you finance this deal?
Home equity line of credit and $50k cash secured a $250k equity line through bank for inventory.
How did you add value to the deal?
SWEAT equity, years of business background & expert marketing, owning our own landscape company thus identifying with our customer's own pain points, connecting in the local community through chamber events & real estate organizations, and WORK, WORK, WORK.
What was the outcome?
Still in business and now profitably after a hurricane, stroke, deaths, theft... now that we have survived a hellacious opening with everything going wrong around us, we are MUCH wiser with a strong CPA and poised for growth with solid numbers for years to come.
Lessons learned? Challenges?
Growing too fast and in the post hurricane chaos we were in caused some severe cash flow issues. There is very low profitability in retail so we have focused on the repair and services ends now. You can't prepare for the challenge of a Cat 5 Hurricane; you just have to work your way through the aftermath of it. I should have leveraged my initial credit & capital better structuring the debt in a different way.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I am now a realtor myself learning to analyze deals & running comps like a champ doing over $4M in sales in the first year! With a deep passion for our community and helping others, my goal for the next several years is to improve the connections in our area to create better knowledge and resources for realtors to help others achieve success here as well!
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