All Forum Posts by: Stewart Beal

@Darian Lupton congrats on Grad School, although I don't care much for Spartans lol.  Come see me in Ypsilanti MI when you get into town.

2 options, if your city has it online, it is super easy, you can look up every single owner of every single property in the city.  Many cities in Michigan have this.  2nd option is to FOIA your local municipality for the information which I did one time, the city gave me a list of 1,000 owners.

Big win today! In June 2019 I purchased the Ridge Center in Ypsilanti, a 6 suite office building on a prominent corner E. Michigan and Ridge Road. The purchase price was $250,000 and I paid cash as it is very difficult to finance a vacant office building. We invested $30,000 into the building, leased up all 6 spaces, received an appraisal for $500,000 and executed a cash out refinance for $325,000 obtaining all of our original investment back plus $55,000. The loan is w/ Union Bank in Bowling Green, OH, 4% interest, 10 year term, 20 year amortization. I was looking for lower interest rate and more cash out and was offered 5%, 4.5%, and 4.25% from 3 banks, but no one was looking to get aggressive on office space, but 4% will do just fine. On to the next one.

We use Rent Manager Software with Paylease so residents can ACH the money into our bank account, if the resident does not have a bank account they can use CashPay where they go to a Kroger or Walmart give them the cash and they put it in our bank account.

I use the city/county databases and mail letters to owners, if you mail a 1,000 you will get 4 or 5 deals right away to look at, but the owners keep those letters and you will get calls years later as well.

Class B areas, aggressive screening and  high tenant quality, 90% are in 1 City, Ypsilanti, MI.  The rest are short drive.  

The Power of Real Estate & My Favorite Story From My Career: In 2008 the foreclosure crises was beginning and I started purchasing foreclosures in Ypsilanti, MI, I made an offer on just about every one that hit the market and I was on a roll. Back then, people would list distressed deals on craigslist so I would check craigslist every day and make offers on those as well. Eventually toward the middle of 2009 the deals on craigslist in MI were gone but craigslist had a feature that said here are some deals near you and there was a 63 unit apartment complex for sale for $630,000 in Toledo, OH. The price really excited me and I contacted the owner immediately who happened to be Fred Warner from California, a relative of the Warner brothers. I offered him full price which he accepted, he told me that Huntington Bank was going to foreclose on him if he didn't sell. I told him I wanted to take over his existing loan and he said sure so I approached Huntington, I met with the bank and they said I could take over the existing loan if I put up a $250,000 cash repair reserve which at the time I did not have, we went back and forth for a month but they refused to remove that requirement to the deal. I told Fred Warner and Huntington, sorry no deal, and I turned my attention to other deals. 3 months later I was in Lansing, MI looking at a deal when my phone rang, it was a banker from Huntington Bank, they said that they foreclosed on the property, they owned it, but they forgot to pay the water bill, the water was shut off and all of the residents were in the bank lobby screaming and yelling, Huntington Headquarters is within walking distance to the property. The banker said, look, if you go pay the water bill, you can come to the bank and pick up the deed to the property, the property will be yours. I called the water department, they said they would turn on the water for $4,200 so I drove from Lansing to my office in Ypsilanti and picked up a check, drove to the water department paid the $4,200, and then drove to the bank and they signed over the deed. And that is how I bought a 63 unit apartment complex for $4,200. The complex appraised for $1,800,000 in 2020.

Who loves old hardware stores? In 2018 the owners of ACE Hardware in downtown Ypsilanti, MI informed me that they planned to retire and close the store because their real estate broker informed them that the building could be worth more vacant than occupied by an ACE Hardware. I said no, you can't close, you are a important institution in this community, please please find a buyer. 6 months passed and they called me again, we can't find a buyer, we are going to have to close the store. I said again, no, ACE Hardware can not close, something must be done. I put together a investor/partner team, recruited my wife Kathlynn to manage the business, applied for an SBA loan through a local bank and worked hard to convince the ACE Corporation itself this store was worth saving. In early 2019 we acquired the building and the business, the 2 owners were very happy because they were adequately rewarded for the 30 years they each put into the business and were proud that a fresh new crop of staff were hired to continue their legacy. My wife Kathlynn recruited 8 new excellent staff members and retained the best of the existing staff. In 2019 the store celebrated its 95th anniversary and everything was going great. Then in March, Covid-19 hit, our heads were spinning, do we close now? Will the community support us? The staff responded splendidly, everyone pivoted, put in all the safety protocols and as the big box stores struggled with safety and their supply chains, customers supported our ACE in record numbers, sales boomed through curb side service, online ordering, special ordering. Today was the ACE Corporation annual convention done virtually this year, the CEO of ACE Corporation gave the opening address, and with tens of thousands of people on the virtual call, he recognized Ypsilanti Ace Hardware in the great City of Ypsilanti, MI as a new leader representing the ACE Hardware brand. We are so proud of what we have done, it is the greatest thing I have done in business saving this store and all credit is given to the team: ACE Hardware Corp, the SBA, the former owners, my partner/investors, the Ypsilanti community and extremely loyal customers, University Bank, my wife Kathlynn, and the amazing staff of 9 who keep this business running every day. Oh, and it was a good real estate play, just got the new appraisal

Tell us much more, what is you experience, how much cash savings are you working with?

I have used Rent Manager made by London Software for 18 years, I am a big fan.  The guys at Appfolio always are trying to get me to switch but it is much more expensive.