From vagrant infested problem property to gold mine.

[Seth Church]

Investment Info:

Industrial commercial investment investment.

Purchase price: $110,000
Cash invested: $2,000,000

399 Helmericks Ave includes 3 warehouse/shops totaling 60,000 sq.ft. and office space totaling 7,000 sq.ft.

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

I was building a new laundromat in the best retail area of our town when our job site got its tools and copper robbed for the second time. Our crew tracked the thieves footprints and sled marks through the snow to some old warehouses nearby and recovered some of the tools. The vagrants were stripping these old warehouses of their copper and living in them. I thought I could solve the vagrant problem by buying and repairing the buildings.

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

I offered to buy the property from the $28B foreign company which kept them from having to tear down the buildings to mitigate the vagrant problem and also from their obligation to pay the rail road for the long term lease.

How did you finance this deal?

I borrowed $110K from a private lender for the purchase and self funded the repair of the offices. 3 months later, I rented 6,000 sq.ft. of office space to a corporation for $21,000/month + utilities for 5 years with another 5 year option. This allowed me to get a construction loan to repair the other buildings and repay my investment into the property.

How did you add value to the deal?

I found a win - win situation for the corporate owner, the rail road land owner, and the community who were plagued by the vagrants steeling and causing mischief.

What was the outcome?

I rented out all the buildings and made all parties ecstatic. I now have great passive income.

Lessons learned? Challenges?

Find big problems and solve them. Use whatever resources you have at your disposal to help make the deal happen.

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

Being the number one client for your commercial broker makes a world of difference. When they believe you can get things done they will bring you the deal first. Having a lender who believes in you will make your deals 100x easier. Treat lenders and brokers as partners in your team. Be loyal.