First Commercial Property

[Scott Stephens]

Investment Info:

Retail private money loan investment.

Purchase price: $95,000
Cash invested: $79,000

Commercial building now being used for my wife's Skin Care business.

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

Location, Location, Location

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

This property wasn't on the active market. The building had sat vacant for 10 years. I decided to call the owner one day to see if they were interested in selling. They said they were. Location and square footage of building on a flat useable lot was perfect for our intended use.

How did you finance this deal?

Private money loan. Had access to hard money at a decent rate, Wanted to employ myself to fix up the building. Focused on finding a cash only purchase.

How did you add value to the deal?

The deal took two years to complete. Stuck with it and celebrated in the end by proposing to my wife by spray painting "Will You Marry Me," on the front of the building.

What was the outcome?

2 year escrow, 1 year re-model, doors open and business is good.

Lessons learned? Challenges?

This property was not zoned for commercial use when I went under contract. A General Plan update would allow for a conditional use permit but it was unclear when that would happen. I was persistent and recieved a letter of good faith from the city. In the end I had to buy the property in a leap of faith. In the end the city worked with me and granted me legal non conforming use and allowed the project to go forward. No one ever said real estate was without risks.