Buying Commercial property

[Jesse Reynoso]

Investment Info:

Retail commercial investment investment in Rapid City.

Purchase price: $150,000
Cash invested: $15,000

Purchased a 7k sq ft office building with a 7k sq foot basement. Owner financed the deal. Originally Owner was asking 200k but the building needed a new roof. They lowered the price to 150k and I flew out there and installed a new roof for under 20k. The building cash flows at 50% capacity and I am having the vacant spots upgraded in order to get higher rents. Building was appraised for 325k. And it is a beautiful place to visit.

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

I have been wanting to invest out of state for a while now and this just fell in my lap. My brother in law rents a space in the building and he told me that the original owner passed and his children did not want to manage this building since they lived out of state.

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

Found the deal through my brother in law and the building was in need of some remodeling and a new roof so there was room to negotiate.

How did you finance this deal?

Owner is financing the deal with only 15k down at 4% interest

How did you add value to the deal?

Added a new roof and am currently renovating the vacant spaces.

What was the outcome?

The building cash flows with only 50% occupancy and will turn the basement into storage spots to generate more rental income.

Lessons learned? Challenges?

The pros and con in working with family to manage and renovate this building .