Janesville Mixed-Use Investment (Retail, Multi-Family)

[Cate DeBates]

Investment Info:

Retail commercial investment investment.

REO property

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

Good buy, cooperative City administration and grant programs

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

Call-in from out of market lien holder for a listing proposal. Negotiated the purchase agreement to offset holding costs instead of listing publicly.

How did you finance this deal?

6-month construction loan

How did you add value to the deal?

Demised commercial spaces and vanilla shelled for repurposed use. In negotiations with a national tenant for 40% of the leasable square feet. Updated apartments and leased within 3 months.

What was the outcome?

Property cash-flows on apartment income alone. Good for a tertiary/small market with little commercial tenant demand. Looking at long term financing by end of April 2022. 13% CAP, 28% ROI

Lessons learned? Challenges?

Construction costs suck.
Find a good property manager and sweat equity partner for smaller flips.
Don't ignore small markets!

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

Coldwell Banker Commercial Fisher Group, MinnStar Bank, Home Sweet Home Remodeling