Distressed Seller Value-Add

[Shirley Yousefie]

Investment Info:

Retail commercial investment in Hagerstown.

Purchase price: $750,000

This purchase is two separate properties in Hagerstown. One is a restaurant plus a residential apartment on the upper level - fully leased. The second building has 4 commercial units on the main level with residential apartments on the second and third levels. 2 retail tenants in place at time of purchase and 2 added since. The residential portion has been vacant for decades prior to purchase, currently in the process of planning the build of 9 apartments.

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

Long-term wealth generator.

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

A lender I've previously worked with owned these properties with a partner who was the hands on operator. Unfortunately the partner passed away and the lender was not able to manage the property alone and was only in the deal as a passive investor. He brought it up and I agreed at the terms he came with, he needed to sell quick to payout the partners children as well so he priced to sell.

How did you finance this deal?

The lender who brought the deal also financed it.

How did you add value to the deal?

Property came with 3 tenants who just about covered all the two buildings expenses. Added retail tenants to 100% occupancy last year. Currently planning the construction of 9 residential units above the retail units.

What was the outcome?

Cash flowing properties with the additional income of a 9 unit residential build on its way.