First Commercial Office Space Buy and Hold

[Kyle Simmons]

Investment Info:

Office Space buy & hold investment in Murrysville.

Purchase price: $105,000
Cash invested: $25,000

This is my first purchase in my rental portfolio LLC. I also am an insurance agent so I will be the anchor in the building. I have two additional leases signed for $500 each totaling $2100/month. I will have one additional space that I anticipate getting $400/month for totaling $2500/month in rent. I found private money investors to purchase building cash and fund about half of the renovation. The remainder will come from me personally. I just purchased mid October and should be up and running first couple weeks of January! Photos to come.

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

I own an insurance agency so I wanted to own my own building rather than rent. I currently pay $700/month for rent. Once I'm done BRRR'ing this commercial property my PITI will be between $900-1000. I will also collect total of about $2000-2500 in rents/monthly.

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

I found this deal in March, it has been up for sale for nearly 2 years. Originally asking for $189k in 2018. Building was purchased for $103k in 2003 by prior owner. I had it under a owner financing agreement at $110k and owner got cold feet and bailed. They were in negotiations with another buyer about 2-3 weeks later and I found two private investors to lend me $105k to swoop in and buy cash.

How did you finance this deal?

I got two private investors at 65k and 40k 11% simple interest interest only payments for 24 months . I also got one additional private investor at 15% 10k simple interest for 12 month term. I spoke with a bank and should be able to cash out refi relatively easily in a few months. I anticipate the property appraising for a minimum of $150k but most likely 175k +. Cash out refi and pay back my investors. I negotiated no prepayment penalty as well.

How did you add value to the deal?

I brought about 5k to the table to close and will contribute about 15k in renovation costs as well. Me personally occupying the space gives my investors some level of security knowing the property will not go completely vacant.

What was the outcome?

Only 1 month into this deal, was just excited to get it up on my profile!

Lessons learned? Challenges?

knock on wood, nothing challenging has popped up yet. I'm sure I will run into some hurdles soon. I did do two single family residence renovations for a rental and my own home recently so I'm using those lessons to maneuver this renovation as efficiently as possible!

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

I have a real estate agent/flipper I use for reference and I also used a real estate attorney for all of my personal notes and closing.