Second property bought!

[Ezekiel Stroupe]

I just completed my second deal a little over a week ago. What a process that began in February. Due to COVID and a bad loan officer it took over six mo the to close on this property.

The property is a mixed use building on the Main Street of a small town. It has 1600sq feet of commercial space, 1,000sq feet of dry storage space in the basement, and two two bedroom apartments above the commercial space.

First lesson I learned: commercial can be unpredictable. With a small portfolio, it was hard to find a bank willing to give me the loan. Even though this property has always cash-flowed and my debt to income is well below typical standards to get approved for a loan. I eventually got a great deal. With this being said, the loan officer continued to drag his feet. The process continued to lag. Eventually, two days before our set closing date, I was denied. The reasoning, no off street parking spaces. I find it hard to believe, but that was the reasoning submitted to me. From there, I pivoted to another bank and secured a deal I was happy with.

I have been completing some remodeling projects in the one vacant unit since buying it. Planning new laminate kitchen floors, countertop, and sink. The bathroom will have a fan installed and new vanity and paint. The rooftop patio is getting a coat of stain and the exterior wall there is being refinished. Holes in plaster have been patched and repainted in all rooms during week one.

With this being said, I have a two year lease secured for the commercial space. A one year lease in the other apartment. The third apartment has a few interested tenants once the remodel is complete.

Overall, the 20 year deal has a monthly payment including principal, interest, taxes, and insurance 1,090. Currently with two sides rented out during the remodeling I bring in 1,125. I am looking to rent the third unit between 700-725. So a total cash flow of 725-750 before maintenance and vacancies are considered.