Bought an Office in Ontario CA instead of leasing!

[Alicia Ortiz]

Investment Info:

Retail buy & hold investment in Ontario.

Purchase price: $380,000
Cash invested: $76,000

Single Office Building in Ontario CA

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

Our prime business is Health Insurance, and we were looking to lease a third location. After reviewing leases on the area, we decided to change our strategy and start buying our own offices.

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

The property was listed on the MLS, and the price was recently lowered from 400 to 380k

How did you finance this deal?

We put $76k down and the bank finance the rest.

What was the outcome?

Since it was owner occupied, we could take advantage of a lower interest rate, and we increase the lease amount to $7k, which is way over market price.
Instead of leasing, we buy.
We get to receive a way higher rent on the LLC corporation, and deducted as a rental expense on the S-Corp (insurance business), so double benefit

Lessons learned? Challenges?

Learn to effectively evaluate your properties before buying! The cost of the property seemed good, but we could've gotten a better deal if we had the knowledge.