Lewes Office Building

[Craig Beebe]

Investment Info:

Office Space commercial investment investment.

Purchase price: $565,000
Cash invested: $65,000

We bought this building for my own office space and long term appreciation, I am my own tenant on a NNN so I don't want to earn a lot of cashflow on this deal.

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

My wife and I were interested in securing an office building that met our requirements to serve as both an office and small residence to maximize the amount of cash we could invest into our business. This building met our requirements after looking for a year.

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

Originally my wife drove by and saw a for rent sign, she called and the owner was interested in selling.

How did you finance this deal?

Private note, 20 year amortization, 5 year balloon.

How did you add value to the deal?

I negotiated the financing, secured the permitting, worked through the regulatory process to get the conditional use permit, GC'd some repairs, and operate the company that is the tenant that pays the debt service, taxes, and maintenance.

What was the outcome?

Purchased, still own, have no intention of selling unless someone offers me a stupid number.

Lessons learned? Challenges?

The original financing was challenging because the building was zoned residential but had been used as a commercial building with a conditional use permit for over 30 years. Banks didn't know what to do with it. Because we spent money up front in good faith to make the building work for the banks with no expectation we would get it back the seller stuck with us and ultimately we were able to negotiate a private note to finance the building.

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

Yes, the agent on the other side Kim Hamer is excellent. We own a brokerage and my wife ErinAnn Beebe handled our side of the transaction, she is excellent as well.