We bought another KMart! $31.5 million in assets closed this year

Commercial Real Estate Investing
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We bought another KMart! $31.5 million in assets closed this year

Clint Harris
Investor · Carolina Beach, NC · Member since 2018 · 188 posts · 377 votes

We closed on our second KMart a couple weeks ago, this one is in Danville, VA, 1.3 miles from the new $550 million casino thats under construction right now and opening in Q1 2024, big things happening in that town! Here is the quick summary. The property is an old KMart that has been empty for quite a while, 97,500 sf, purchase price and construction cost total $5.5 million. We are converting this property to a Drive-In, Climate Controlled self storage facility with 680 units with a unit density mix determined by the feasability study. Our conservative analysis puts the stabilized NOI with below market rents and occupancy at $938k, and at a 6 Cap, the bank puts a stabilized value on the facility of $12.5 million! Very happy with this project, and very grateful for our Nomad Capital team! Can't wait to be paying out cash flows soon, and then cutting some very nice checks to our investors in a few years! Very thankful for this BP community, and all that we have been able to learn over the past few years from so many people willing to share. On to the next!!!

Clint Harris

Nomad Capital

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Russ B.
Investor · Cleveland, OH · Member since 2017 · 319 posts · 330 votes
4y
Based on the waiting list we currently have at another location across the street (this is an expansion rather than a whole new operation), it will fill as quick as the spots open. In addition, we've been bulking up on staff and training the most senior ones to take over as leads and directors (for those who have the state-required education). The idea is that our existing facilities serve as leadership factories for new ones, to help drive quality and consistency.

There's a horrible shortage of child care in the area, and we're also the nicest facility.. so families are fighting to get in there.

On top of all that, they just built a giant gated resi development right behind building #1, with an entrance a few hundred feet away, and there's talk of a bunch more apartments going in behind building #2.

It sounds like a business owner's dream, but it's actually a bit too much - alleviating this shortage will enable other businesses to grow in the area, which in turn helps us.
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  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    4y

    Hi Clint,

    Hopefully you can make as much money with the property as old "SS" made with it.

    Here's a Video of "SS's" house: https://www.youtube.com/watch?v=k_MRwzItCtM

    0Reply
  • Russ B.
    Investor · Cleveland, OH · Member since 2017 · 319 posts · 330 votes
    4y
    I've thought about doing exactly this business model myself.

    I swear I'm gonna do it, just as soon as I don't have another deal taking priority...
    0Reply
  • Clint Harris
    OP
    Investor · Carolina Beach, NC · Member since 2018 · 188 posts · 377 votes
    4y
    Quote from @Russ B.:
    I've thought about doing exactly this business model myself.

    I swear I'm gonna do it, just as soon as I don't have another deal taking priority...

    Whatever deal you are currently working on, it would have to be an absolute grand slam to beat the margins of a self storage conversion project.  The combination of ECommerce destroying the big box retail industry, but those buildings built in a high residential density area, and with really low demand, has created a perfect storm, but it won’t last forever.  There are a TON of risks, my recommendation would be to partner or invest with someone already doing it.

    0Reply
  • Russ B.
    Investor · Cleveland, OH · Member since 2017 · 319 posts · 330 votes
    4y

    As a pure real estate deal, those definitely are going to punch above their weight.. hence why I'm interested to try one. It seems like a safe way to get a really good ROI.

    In my case, the real estate side is a small sliver of the whole project - our actual business is a daycare / preschool operation.

    0Reply
  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    4y

    Thats exciting! Glad you have the runway to build something like this out from 0. Whats your plan to build occupancy? Timeline to stablization?

    0Reply
  • Russ B.
    Investor · Cleveland, OH · Member since 2017 · 319 posts · 330 votes
    4y
    Based on the waiting list we currently have at another location across the street (this is an expansion rather than a whole new operation), it will fill as quick as the spots open. In addition, we've been bulking up on staff and training the most senior ones to take over as leads and directors (for those who have the state-required education). The idea is that our existing facilities serve as leadership factories for new ones, to help drive quality and consistency.

    There's a horrible shortage of child care in the area, and we're also the nicest facility.. so families are fighting to get in there.

    On top of all that, they just built a giant gated resi development right behind building #1, with an entrance a few hundred feet away, and there's talk of a bunch more apartments going in behind building #2.

    It sounds like a business owner's dream, but it's actually a bit too much - alleviating this shortage will enable other businesses to grow in the area, which in turn helps us.
    1Reply
  • Jay S.Pro Member
    Lender · San Francisco Bay Area · Member since 2019 · 50 posts · 45 votes
    4y

    This is Awesome! Congratulations. 

    [email protected]408-832-8200
    1Reply
  • John M.
    Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 796 votes
    4y

    I am so jealous of this project!  Danville is awesome.  I'm looking for a vacant car wash or multibay garage.

    0Reply
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