Short/Medium-term residential Investment

[John Doehler]

Investment Info:

Other buy & hold investment.

Purchase price: $50,000
Cash invested: $60,000

Still waiting on the structural engineer's assessment, so I can get the general contractor to give us an estimate for doing the work, so I can get financing. It takes time, but this is a great location and a really awesome property. I met another investor there that's putting in a micro-brewery/restaurant with a music venue behind the restaurant. His business is less than 2 blocks from our building. Luckily, our time-lines for completion are similar.

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

Cash-flow, long-term wealth creation, excitement in making money rehabbing an historical building. Our building is #20 on the Historical tour of Williamston, NC.

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

Luck. I found it on the Internet, but I'm not sure if it was Zillow, LoopNet or Crexi. It was a cash deal and I paid asking price.

How did you finance this deal?

Cash. We also paid to fix the roof/roof structure and gutting the building. All-in is about $110,000 (cash).

How did you add value to the deal?

We're still working it, but we gutted the building and will build three offices, two apartments and one storage/laundry area on the first floor. The second and third floors will each have four apartments.

What was the outcome?

Still working on it...

Lessons learned? Challenges?

One challenge is the time it is taking for getting everything needed to move forward (structural engineer, general contractor design, financing, etc.). Since its a small town the permitting process has been relatively easy.

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

"So far, we're working with a general contractor, a commercial roofer, the county inspector and a commercial mortgage broker.