Hello everyone!
This is my first BP post and thought this was as good was as anywhere to jump in. I have owned Queen's Pizzeria in downtown Mesa AZ for the 7 years (2010) after managing it before then. 5 years ago (2012), my wife and I decided to purchase a triplex a few blocks away for our restaurant. We did this instead of buying a house for ourselves. We planned on living in one unit and renting out the other two units as a form of additional income. Our target rent was $425/month (currently up to $675) for one bedrooms, but after we start marketing the property, we noticed such a high response to the property that we decided to look for a fixer upper.
We found a 2800sqft former office building that was last used as a mortgage company before falling into foreclosure. This property had a number of major issues including being completely strip (no kitchen or bathroom fixtures, missing backdoor, and no HVAC) property is also located on a busy street. The building was originally built as a home in the 40's and was converted to commercial office sometime in the 90's. We lived in the building and slowly worked to turn it back into a home. It was a challenge not having a shower or kitchen until we put them in. Made us realize how many things are need to make a place livable and what buyers will expect. We bought the property for at auction for $70k and lived there for just over 2 years to save on taxes. We finally sold it for around $180k.
While we had this remodel going on at home, we began to notice the downtown area was do for redevelopment. Light Rail was in the process of extending through the area and we knew our rent for the building was going to eventually go up. My wife was getting ready to leave her corporate job at Vanguard. The whole time she worked there we saved as much as possible in her 401k. By this time I was on friendly terms with the owner two doors down who owned his building and the one in between us. The renter who had the space between us was unable to continue through the light rail construction and I saw my chance. I went over and convinced the owner to sell me the building and carry the note. I was still in my 20's and in 2013 loans were difficult to come by. I offered 20% down and we agreed to 4% on a 12 year note. My wife and I pulled everything out of the 401k and rolled the profits from the sale of the house into a purchase and total remodel of the property. The building was never a restaurant and need extensive work to make it useable as one.
After going through all of that, we was felt ready to keep pushing for more and greater things. Some of the deals we've gone on to do, include purchasing the 5 units next door to our triplex, all of them on Center Street with flexible zoning. We also bought another building on Main Street and are in the process of restoring it to its historical beauty.
I apologize for such a long post. I have been a regular reader of BP for over a year. I'm excited to finally be posting!
