We bought a grocery store for $850k, converted it to self storage worth $13.5 million

[Clint Harris]

Investment Info:

Other commercial investment investment.

Purchase price: $850,000
Cash invested: $3,200,000

Want to see what buying an old abandoned grocery store for $850k, and converting it to a Class A climate controlled self storage facility wirth $13.5 million looks like?

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

Massive forced appreciation means that at stabilization we are usually sitting at 30-35% LTV, meaning we can refi to pay out all investors and ourselves without selling the asset. That means no Capital Gains, which means tax free. We keep the assets and allow them to continue to cash flow, thats the Nomad way.

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

Vacant for 15 years, been for sale for years, MLS

How did you finance this deal?

Capital raised through 506(b) syndication, friends and family

How did you add value to the deal?

Asset class conversion, when you change the asset class, you change the formula by which the asset is valued.

What was the outcome?

$13.5 million 5 year stabilized value

Lessons learned? Challenges?

Asset class conversion combine with vertical integration is key.