Commercial BRRRR in KCMO Crossroads

[Lucas Taylor]

Investment Info:

Other commercial investment investment in Kansas City.

Purchase price: $725,000
Cash invested: $315,000

Contributors:
Logan Freeman

In the vibrant Crossroads Arts District, this 1903 built commercial building that had been owner occupied as a hardware store. My rockstar agent, Logan Freeman, got a lead on it off market. Negotiations took months because it was owned by two sisters who weren't on speaking terms. I was able to get a construction loan to finance the purchase and $800k rehab expense after Logan was able to show the appraiser the ARV would be at least $1.6m, and get a letter of intent from a prospective commercial tenant. We are currently in the process of rehabbing this property to be a total of 7400 square feet of commercial space, and two - 3 bedroom apartments.

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

Already owned a mixed use building on 39th Street. This building was larger and in a great area of the city. Potential to have a great cashflow property in the hottest area of KCMO

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

Logan Freeman got a lead from his consulting business.

How did you finance this deal?

Commercial Construction Loan from Derek Bailey at Great Western Bank.

How did you add value to the deal?

Created four different options for the sellers: Lease option, seller finance, cash offer, bank financed. Brought the money needed to get a construction loan, which cost us much less than hard money. Analyzed numerous scenarios to help determine best use of the building.

What was the outcome?

TBD! In rehab now...

Lessons learned? Challenges?

Relationships 100% closed this deal. Treat your team well; be reliable, and predictable. They will bring you deals and solutions if they know you'll take action.

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

Real estate agent/partner: Logan Freeman
Financing: Derek Bailey, Great Western Bank
Construction: Kendon McBee, Full Swing Construction
Architecture: David Grimes, Shelter 24