The Story of Open House Austin

[Kristina Modares]

Investment Info:

Other commercial investment investment.

Purchase price: $240,000
Cash invested: $56,000

Click to see before & after pics and more details on the deal
https://imgur.com/gallery/D15hm5h?fbclid=IwAR0ffVwiwnYjifiBNAjq8LzaxVeaBpF3O5lXAsglnZ06CRjnDINl8biDzg4

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

I was looking for an office space and wanted to explore my options so that I could separate my work life and my home life. The prices for buying or renting commercial property in Austin were high, and it didn’t make financial sense for me to spend that much on something that I’d only be using a few hours a day. I was beginning to give up on finding an affordable commercial space when I stumbled upon this building.

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

It was on the MLS for over a year! We looked into the property and found it had opened permits that the seller didn't want to deal with so we used that as a negotiation tactic to knock off $59K!

How did you finance this deal?

My business partner, Steph and I were able to finance it via a small bank in Texas. We 30% down and we me, her and my dad each put in $25K. The rest of the deal/renovations were funded by Steph and I

How did you add value to the deal?

Trash clean up...there was so much trash!!
Closing open permits
Re-pave the lot
Adding parking spaces
Three 50 amp plugs for food trucks
Exterior Paint
Interior Paint
Garage Door, install. Our contractor had to bust through a cinder block wall to create the opening
Business sign
Security system
Office furniture
Awning
Deck
Fence around property
Interior/exterior lights

What was the outcome?

We now have an office, community event center and rent out our back patio to 2 food trucks!

Reno Cost: $56,000 So, that puts us at $240K (sales price) + $56K (reno cost)= $296,000. If we sold our property today, we believe we could sell it for at least $500,000.

Lessons learned? Challenges?

Steph and I formed this partnership, bought the property and tried to start a new real estate team together and hire a new employee while trying to project manage this whole project...it was a very stressful time but I'm not sure if I'd do it any other way now. I learned a LOT from some of the mistakes we made. We wanted to do it fast and I think that's what happens when you try to go too fast, you can get burned out...luckily I was able to take 2 weeks off after our launch party!

[JD Martin]

Super cool story and pictures! I enjoyed following along - does this building pay for itself or are the food trucks just a little offset?