Updated about 5 years ago on . Most recent reply
Commercial Office Condo Construction
Investment Info:
commercial investment investment.
Purchase price: $740,000
Sale price: $1,350,000
I did this twice on 2 different identically designed commercial office condominiums. I built these properties from the ground up with 35% equity in the deal using none of my own money. Took 12-14 months to complete.
What made you interested in investing in this type of deal?
Cash flow! The ability to receive individual parcel numbers for each condo allowed me to do contract sales on each which in return generates $1000/month income with no Tenants.
How did you find this deal and how did you negotiate it?
Found commercial land by a motivated developer who wanted the last piece of property sold so that they could move onto their next deal quickly.
How did you finance this deal?
65% LTV Conventional Construction loan that converts to permanent financing after completed build.
How did you add value to the deal?
Constructed the units, managed the projects and parceled out each of the units with the city.
What was the outcome?
Sold on a contract for deed receiving all my equity as down payment and extreme cash flow for the next 10 years.
Lessons learned? Challenges?
How to manage commercial contractors, work with developers for property acquisition, How to properly owner finance a deal for max cash flow. The benefits of depreciation and how to use it to offset income tax consequences.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
No, I am self educated and read a truck load of books I purchased off of Amazon.