Big Deals Can Exit The Rat Race!

[Jared Garfield]

Investment Info:

Other commercial investment investment in Falcon.

Purchase price: $3,000,000
Cash invested: $1,000,000

Colorado Springs is one of the hottest housing markets in the United States. Home values here have had massive increases over the past several years as the city has been ranked among the top 5 "Best Places to Live!" The average home price in this area is about $350,000. We are entitling 829 acres into approximately 220 lots. About 25 Acre land will be a small commercial/mixed use portion, with the balance an equestrian community 2.5 acres and finished homes selling from $335,000-$400,000.

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

Buying land at agricultural pricing at rates that foreclosures were going for 15 years ago made this property a no brainer. It had enough water rights to be able to have our own water treatment plant as well which will be a nice income generator for many years to come. Being able to provide affordable housing on 2.5 acre lots when everyone in the area is getting stuck right next to a neighbor made this more green and more sustainable which I love! We will roll profits into apartments 4 income

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

A very good friend brought a realtor who specializes in this type of project, her buyer had been working on this for several years and fell through and so we were able to step in after most of the water rights were secured. That really speeds the deal up and saved us a lot of costs.

How did you finance this deal?

We used private money, but were able to get some financing from other land owners that joined the project as an assemblage.

How did you add value to the deal?

We were able to improve the zoning which immediately brought a huge value increase, as well as having the legal water rights. The land had been foreclosed and the seller didn't realize pumps had already been installed.

What was the outcome?

We are currently putting the funding together for $750,000 to do the engineering of roads and the water treatment plant. Then we will either sell the development once it is shovel ready, or start phase one and develop the homes. We want to take the profits and buy apartments that we can re-position and use the cash flow for passive income.

Lessons learned? Challenges?

Going through the engineering, site planning and zoning process is always a good learning experience. Working with CCIM land planner experts and developers that have tons of experience in these types of projects is also really important. Having the right teams that are well connected, and in the West, the importance of WATER!

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

Yes, glad to give referrals to anyone looking in the Colorado Springs area, or in Huntsville, Birmingham, Montgomery, Atlanta, Kansas City, South Bend, or the Florida Panhandle where we have done a lot of cash flow turn key investing.