All Forum Posts by: Tyler Graffigna

@Jamie Rose - Thanks! The numbers were just on the retail condo and the basement (which was a separate condo that Peet's uses for a walk-in, dry storage and trash room). Also, the hard money loan for renovations, tenant improvements, and carrying costs was $1.1M.

These numbers are inaccurate as they represent my investment in the project and not the deal numbers. I updated the numbers in a new post as BP doesn't allow for the deletion of posts and we have since sold the property.

Investment Info:

commercial investment investment in Oakland.

Purchase price: $680,000
Cash invested: $210,000
Sale price: $4,000,000

Historic retail space sees new life as a flagship coffee shop after 30 years of vacancy following the closure of Doggie Diner.

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

I knew the property was distressed and what the future plans were for the neighborhood. I also owned a residential unit in the same building so I believed that developing the space would help increase the value of my residential unit.

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

I was referred to my partner by a mutual acquaintance. I told him I was looking to invest in the Uptown neighborhood of Oakland and he knew someone who was looking for an investor. It turns out we sat on the same HOA board together and it took a mutual third party to bring the two of us together.

How did you finance this deal?

I used my retirement funds for my initial investment and I used a small cash deposit and a promissory note to buy out one of the partners on a subsequent round. The builder/developer carried the note for the acquisition and we used a hard money loan for the renovation.

How did you add value to the deal?

I was the investor and provided financial and legal guidance. The big value add came when we secured the tenant. A signed lease agreement from an A-credit tenant was all that the hard money lender needed to lend us the money for the renovations.

What was the outcome?

We leased the property to Peet's Coffee for 20 years NNN. Sold property one year after tenant took possession at a CAP of 3.875%.

Lessons learned? Challenges?

Things can and will go wrong with every deal whether it's time delays, partner disagreements, or funding challenges. I learned to focus on solutions instead of lamenting the problems. The more people I shared our challenges with, the more solutions came our way from sources we did not expect.

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

We used different agents for the acquisition, lease and sale. Each one had different strengths. Collier's International helped us find the perfect commercial tenant. Preserve Capital West helped us find the perfect buyer who was in the early stages of a 1031 exchange.

Investment Info:

commercial investment investment.

Purchase price: $400,000
Cash invested: $400,000

Private investor in vacant retail renovation in an historic landmark building. Project required ground floor facade restoration.

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

I knew that the acquisition price for the property was below market value and that the ownership needed private financing to complete their due diligence and renovations. With the right commercial tenant, I believed there was an opportunity to double my investment.

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

I discovered this deal over a casual conversation I had with someone I had met through Rotary. I told him I was looking to invest in the neighborhood and he referred me to the owners who were looking for a private investor. I had to hire an attorney and together we worked on the terms of the investment.

How did you finance this deal?

My first round was all cash and the second round was through assuming a loan and guaranteeing a promissory note.

What was the outcome?

We ended up signing a national A-credit tenant to a 10-year NNN lease with 2 5-year options. The CAP rate on my investment starts at 15% and increases to 25% over the next 15 years.

Lessons learned? Challenges?

You have to listen to what the market is telling you. The original plan for the space was an upscale bar/lounge. It ended up being a coffee shop. The quickest path to financial success was to pivot to becoming a commercial landlord vs. being an owner/operator.

Investment Info:

Single-family residence other investment.

Purchase price: $220,000
Cash invested: $25,000

2500 sf full-floor apartment had been on the market for 3 years when we discovered it.

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

Worked with a local real estate agent. Needed to hire an attorney, translator, and engineer to negotiate terms and perform due diligence on the property.

How did you finance this deal?

Acquired an ARV loan in Italy for 50% of the ARV. Only needed 20% down to close on the property, but all renovations will be paid for out of pocket.

Lessons learned? Challenges?

You can't plan for everything that will present a challenge. Some fees will be a little more, some will be a little less. Once I had money at risk, I found that it is more important to be committed to seeing the project through, rather than bailing out because an unforeseen obstacle presented itself.

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

The attorney we used is fluent in both English and Italian and has offices in both the US and Italy. We used a mortgage broker in Florence who was recommended by our attorney. He was also fluent in English and Italian and was able to get us a non-resident loan.