My First Commercial Property!

[Tanh Truong]

Investment Info:

Retail commercial investment investment.

Purchase price: $5,050,000

This was a property I found listed on-market but marketed very poorly. It was neither marketed on Crexi nor LoopNet, but solely on the broker's website. After analyzing the property, I put in an offer and eventually got it under contract. The brokers were unsophisticated to say the least, which was a great thing because we got a great deal! The worst part was not getting the requested items in a timely matter. As a result, we were under contract for over three months!

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

Mentor and Mindset

How did you finance this deal?

Syndication

How did you add value to the deal?

Lease up, creating an out-lot, and capex

What was the outcome?

Numbers:
$1.1M raise
$1.005M DP
Initial COC: 18%
Proforma COC: 26%

Additional upside:
Creation and selling of an out-lot: $500k
Increased valuation: $2-2.5M after 3 years

Lessons learned? Challenges?

Lots of attorney paperwork. Due diligence is very important in larger properties like this. You also have to review the lease in detail because all leases are different.