Commercial - Single into Grand-Slam

[Matt Smith]

Investment Info:

Large multi-family (5+ units) commercial investment investment in Kenedy.

Bought a single screen theater in a small town and flipped it a year later for 50x.

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

This was the deal that would put my movie making aspirations on the map...not! My plan was to buy this single screen theater, fix it up, and begin my theatrical movie distribution business. The problem is that the theater was in very bad condition.

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

I was passing through Kenedy (population about 2500-2800) in 2008, or 2009. I noticed this cool old theater called the Rialto. I dug into research thinking maybe there's a chance I could make a movie and show it in this small town theater, only to wind up buying it a few years later.

How did you finance this deal?

This was a cash purchase deal.

How did you add value to the deal?

I advertised on the marquee for the year that I owned it. It was used to promote my website. Needless to say, all the traffic, low as it was, was from this small town area.

What was the outcome?

There was an oil boom in the region that directly impacted the real estate. An investor made an offer a year later and I was able to 50x my investment.

Lessons learned? Challenges?

If you're passionate about real estate investing, you'll probably see value and have ideas that no one else will understand. That was my experience with this property. Friends and family advised not to buy it, because they wouldn't buy it. The look on their faces a year later after I sold it was bitter sweet priceless.

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

No agents were involved in this deal.