Investment Info:
Other commercial investment investment in Lewes.
Purchase price: $864,000
Cash invested: $1,500,000
Boutique Hotel. (Holding)
12 luxury condominiums (sold)
6 commercial spaces (5 sold) (1 holding)
What made you interested in investing in this type of deal?
Survival. I moved to the middle of nowhere and needed a job. I had been a landlord (from flips and renos) and figured it wasn't much different than running a motel/hotel.
How did you find this deal and how did you negotiate it?
Driving around looking for properties in relatively undiscovered areas. I bet everything I had and made the owner a good offer. He refused for three years. I just kept coming back to him every six months or so. He finally accepted in principle but the lawyers kept screwing up the negotiations. I got him to just sit down, the two of us. In fifteen minutes we made the deal. I ended up making millions on the redevelopment.
How did you finance this deal?
Bank (ugh!) Three stage development selling off pieces to finance the next stage.
How did you add value to the deal?
I run better companies than the next guy.
What was the outcome?
Retained 33% of the building including hotel, 2 condos and 1 retail unit
Lessons learned? Challenges?
Too many to list. Survived two stage four cancers during construction and afterword. Learned I knew much more than most of the people I was hiring (and firing).
Never take a partner who doesn't have 50% invested personally. Banks are thoroughly untrustworthy if times get tough. Litigation is how most people do business. Don't be afraid to fight.
Don't fight town hall. If they don't want your investments walk away.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Absolutely not. Fired the agents, the builder and my attorney. Talentless Vampires, every one of them.
