Convert a junk yard to a photography/movie studio

[Roger East]

Investment Info:

Other buy & hold investment.

Purchase price: $300,000
Cash invested: $250,000

Purchased a junk yard, redesigned it as a commercial photography/movie studio, did an extensive rehab and upgrade, changed the use.

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

Saw the upside potential and significant increase in potential revenue stream

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

This was a 1031 exchange, found it through a commercial broker

How did you finance this deal?

Cash from 1031 exchange

How did you add value to the deal?

Added 400 amps single phase, 400 amps 3 phase electrical, added three bathrooms, added two kitchens, added dressing area, added interior walls, fully insulated the envelope, added 25 tons HVAC, refinished all surfaces, paved the parking lot, made entire building ADA compliant.

What was the outcome?

$550,000 invested, current value is $2,600,000

Lessons learned? Challenges?

Find creative ways to add value, do more deals. Challenge was to convince lender to buy into my vision.

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

Commercial broker, 1031 custodian.

[Kyle Kadish]

@Roger East were there any entitlement changes to land use, i.e.zoning changes.