Residential to Industrial

5 Replies

Investment Info:

Single tenant 15,300 SF Industrial in a submarket of Albuquerque, NM

I started investing in 2013 in SFRs.  I would buy them distressed, fix them up, tenant them and put long term debt on them.  As we all know the market for SF has been on fire recently.  I wanted to cash in on the equity and trade up to a larger property.

Purchase price: $1,250,000
Cash invested: $50,000

What made you interested in investing in this type of deal?

Industrial has a lot of benefits

Rise in Ecommerce - For every $1B increase in online sales, 1.25M SF of industrial is needed

Last Mile Locations - lots of this product is well located.  It is basically a covered land play.

Purchasing below replacement cost

Sticky tenant base - most leases are 5 year term and go longer

How did you add value to the deal?

The building was in great shape, I was able to structure some creative financing.

I bought it vacant.  I did some simple things (painted the purple columns, cleaned up the yard and swept the parking lot)

How did you finance this deal?

Seller Financed Deal 

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I have some really great market specific agents and title agents that I work with on a regular basis.

What was the outcome?

I was able to 1031 2 homes in to this building.

We just signed a 5 year lease with a tenant.

I increased cash flow by 500% over the 2 homes I had before.

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