Completed/Sold 5 new construction condos in Salem Massachusetts.

[Eric Sullivan]

Investment Info:

Condo commercial investment investment.

Purchase price: $950,000
Cash invested: $1,100,000
Sale price: $2,950,000

Previously a 3 family from the 1700's. We tore the building down and built 5 new construction townhouse condos (each unit is 2 floors). We dug out the basement about 2' to get proper head height. Per historic we had to retain the chimney so that acted as a feature component throughout most of the units. The property also has 5 off street parking spots. We installed a 20' steel beam to open the back section with two 18' wide garage doors on either side.

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

Condo development opportunity in the heart of downtown.

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

It was brought to us off market by one of the agents we work with in the area.

How did you finance this deal?

Commercial loan from a local bank. 75% LTV, bank covered all hard construction costs. We brought acquisition funds, soft costs, and interest carry to the table.

How did you add value to the deal?

Turned 3 units into 5 units.

What was the outcome?

We sold each condo individually to end users.

Lessons learned? Challenges?

The challenges that come with dealing with historic properties and the towns they are located in. The property was to the lot line with easements on both sides so attention to detail is critical always.