Phoenixville Bonsai Shop

[Christian Beyer]

Our first deal as official real estate investors- this one has potential to be one of our best for a long time.

After scouring the local market for a few months my brother stumbled upon a small 'For Sale' sign in the window of a Bonsai shop. We had been in talks with another duplex owner in downtown Phoenixville but his $320K asking price and our $20K in private startup cash weren't a good match. This new duplex was owned outright by the widow of the shop owner, and she agreed to seller finance the property for $95K. We offered 20% down with a 10 year balloon payment. We inherited an upstairs tenant paying $600 in rent which covered the mortgage and expenses. 

With the bonsai shop owner leaving, we decided to do a full renovation of the downstairs shop. We had an additional $17.5K in private lending come to us after we made the deal, and we budgeted that for the reno. 9 months and $30K later (as the story always goes) we had a tenant moved in and ready to pay rent. The tenant came to us after seeing the space (and a sign in the window) and she wanted a build to suit salon put in. She turned out to be an amazing tenant. One year after purchase the place was renting for a total of $1,675!

Better news yet- the owner who still held the mortgage asked us to pay early in exchange for a discount on the remaining balance of the mortgage. We negotiated 12% off the remaining balance, took out a refi on the property after it appraised for $200K (!), paid her back in full AND got to use the remaining equity pull to purchase an additional 2 properties- a duplex and single family in town.