One year after first deal feedback appreciated

[Eric K.]

I can't believe it has been a full year already, but here's how my deal broke down and I would like some feedback, as I'm gearing up to do another Real Estate deal. I'm looking at Residential this time however.

First off, I didn't go in trying to do Commercial Real Estate investment, but it is what happened. I was looking for a spot to put in an Ice Cream store, and stumbled upon a 7000 sq. ft. commercial building in my smaller downtown.

It is on the corner in the heart of downtown. 3000 sq. ft. was already leased at 2000 a month. I subdivided the front half and leased out 2000 sq. ft. at 1650 a month.

There were some complications and the roof needed to be redone along with some other issues to get everything up to code. In the end there was a sizable amount of work done. New roof, new heating/ac, new windows etc.

After the improvements I had limited capitol left, and opted to just lease out the final 2000 sq ft. at 1550 and forgo the Ice Cream store all together. The leases are not NNN, and I certainly could get more from the back 3000 sq. ft. but I can't negotiate a new price until the existing lease expires.

Gross: 60,850
Building Cost: 300,000
Renovation: 120,000
NOI: 18,000

I learned a lot and got very involved in the community, which has been a blast. However, the biggest downside was how much of my own capital I had to put into it, and the fear of not being able to find a tenant. I was very relieved when the last space filled.