Commercial Warehouse Building

[Dan V.]

Investment Info:

Industrial commercial investment investment.

Purchase price: $415,000
Cash invested: $48,000

8,500 square feet freestanding commercial warehouse building

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

It's right across another property that we own. Flex spaces are good investments nowadays and commercial space is easier to manage.

How did you find this deal and how did you negotiate it?

Door knocking. We made an offer more than a year ago but the seller chose to sell it to an owner-occupant with a lease option. The tenant did not exercise the lease option so we offered to buy it again and we got it.

How did you finance this deal?

Combination of bank and 2nd lien seller financing.

How did you add value to the deal?

We updated the electrical and made repairs to the building. The appraisal came back good as well so we got instant equity and bank agreed to a lower downpayment.

What was the outcome?

We raised the rent (still under the market) and kept the current tenant.

Lessons learned? Challenges?

Keep communications open and know the market. The tenant was initially opposing the increase in rent but we stuck with it since we know that the raise was reasonable and even with the new rate, it is still below the market. We also offered to make some repairs to make it more justifiable.

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

We made a direct offer and used our local real estate attorney