How to make $1M on your first commercial deal

[Mike Sowers]

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $1,380,000
Cash invested: $3,500,000

Converted a warehouse mixed use historic building to 26 apartments with retail below. Used a crowd fund and historic tax credits to fund the deal.

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

Ability to get creative and learn historic tax credits.

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

Bought a junior lien and redeemed out of foreclosure.

How did you finance this deal?

Crowd fund and historic tax credits.

How did you add value to the deal?

Converted office space to apartments. Leased space.

What was the outcome?

Created a property worth $6,000,000 with an adjusted basis of around $3,000,000 after tax credits. Equity created was around $3,000,000.

Lessons learned? Challenges?

Lots of lessons learned. Check out our TV episode.