FDJAKE,
Hey you ^(^^*( smarta$$. Keep being lucky and sharing about it because I think it is starting to rub off on some people and I could use some more luck =p.
I’m just curious. If you don’t want to answer and keep it a secret, that’s fine. No biggie. But, how did you market that service centre that you flipped for twice as much within a year? Maybe I’ll learn something new here. I take it that it was vacant when you bought and sold it since you did $10K of work?
No it was not vacant. There was a guy in there that had beat up cars and trash and oil and just about every kind of auto part strewn around the building. It looked like a beat up junked out building when I bought it even though some of it was built in 2005. I asked him(prior owner/tenant) to leave and he did. Of course he left me lots of stuff to clean up.
From there I just followed FDJake’s advice on how to make the building more attractive from the road. I didn’t market the property at all really, the property did it for me. It is on one of the busiest roads in Raleigh. After I fixed it(paint, asphalt repair/seal, and no more trash) up it they taxi company across the street contacted me and asked what was going on with it. I hadn’t even put up a sign yet. We haggled a bit on price but I had another guy who wanted to lease it from me too so I went from being scared to death of what I just bought to having options with 10K dollars worth of work. Pretty cool. Could have held on to it but I have bigger things in mind and need the cash to make it work.
I’ll be sure to keep you in mind if that happens rookie,
Thanks!
Dave…
John was just L U C K Y!!!
For those who care…
Take a minute to re-read John’s ORIGINAL POST on this property…You’ll notice I mentioned that the BUILDING itself would become a BILLBOARD as people drove by everyday and WATCHED it being transformed. I explained that EVERYONE of my commercial properties had either been LEASED or SOLD because of TRAFFIC and INTEREST during the REHAB!!!
I’m sure DAVE will just write that off as having NOTHING to do with John’s sale…But the FACT is…JOHN’s LUCK wasn’t LUCK at all…It was FOLLOWING a predetermined, SPECIFIC plan right down to COLOR CHOICE for that building, making sure he seal coated the ENTIRE parking area and striped it and how to get the best price on that seal coating. Even TRIM colors were not left to CHANCE. We also discussed various lease options and I provided John with a template of the triple net commercial lease I use with my tenants. ALL SMALL DETAILS…that added up to BIG profits. But DAVE knows more than I do…Heck I thought Ford cutting costs by standardizing various small components on their cars added to their PROFITABILITY…
But now thanks to DAVE…I know BOTH John’s commercial building flip and FORD’S turn around were just me being LUCKY!!!
I don’t know what to make of it. Probably doubling the rent is what sold it for double.
I’ve got a vacant commercial building on a busy street. I told my lawyer to keep stalling the foreclosure in the courts. I can’t sell it for what I bought it for after lowering the price a bunch of times, even though the building across the street sold for three times as much a month ago vacant. The only difference is the other building has parking.
I’ve repainted the front. I’ve spent a fortune cleaning it up. It’s passed the electrical and it’s still not selling. In fact, several people from out of town have asked why it’s so cheap? I can’t make any sense of this place. Vacant commercial buildings are one of my stuck points right now, that’s why I asked.
I think the last line is your answer.
JP
That could be it, but then again, it’s in downtown and 90% of the buildings in downtown don’t have parking. This property isn’t unique from most of the buildings on the street in that sense. It’s surrounded by parking meters, public parking garages or pay lots.
Become the 10 percent.
“I DON’T KNOW WHAT TO MAKE OF IT. PROBABLY DOUBLING THE RENT IS WHAT SOLD IT FOR DOUBLE.”
Ah, NO DAVE…That DOUBLE RENT…Was an OFFER made to JOHN by an interested tenant BEFORE he even FINISHED the rehab. JOHN never rented this building.
It was at THAT POINT that John asked me for the triple net lease I use.
SO…John had 2 offers on the table…ONE to BUY at DOUBLE his cost, and one to LEASE for multiple years NET, NET, NET at a HUGE increase from the previous tenant.
He SOLD…and by the looks of it!!! He ain’t standing around HOPING to get LUCKY!!!
Just wondering why didnt he do the second option and then the first, add value with a nnn tenant and sell for even more.
because he was smart and took the fast turnover and wasn’t greedy…pigs get slaughtered…
Im going to assume he sold at the top then.
Sold at the top???
If the “top” is a 100% return on a $200,000 investment in ONE MONTH…Yea, He sold at the top!
John is very smart, he’s been watching his local market for a long time (in addition to actively investing in it) He noticed a NICHE that wasn’t being filled. HIGHER end homes that needed work and weren’t selling because of that. By selling that commercial building so quickly he was able to roll the profits right into another property which should make him another $60 to $75K.
So…2 deals…and a PROFIT of OVER a QUARTER MILLION DOLLARS!
“He wasn’t greedy…Pigs get slaughtered.”
No truer words have ever been written!
I still have to disagree that adding value through placing a long term good credit tenant in his building and then selling makes him a pig.
I still have to disagree that adding value through placing a long term good credit tenant in his building and then selling makes him a pig.
gaulkin,
Forgive me for my clearly sarcastic tone…But are u blankin kidding???..John in NC made %100 in one month…Why would he risk that kind of return/exit for a good credit tenant…Is it me ???..Do you take into account that he made %100 in ONE MONTH…Did it ever occur to you that maybe,just maybe he is going to make %50-%100 again with the profit he took…Had he done it your way and took the good credit tenant what would that have achieved???..He gets to collect some BS rent every month …vs taking %100 gains in ONE MONTH and having the oppurtunity and the capital available to do it again…You cant even compare being a landlord to taking a %100 ROI in ONE MONTH :banghead
I should of been more specific, i ment the practice in general. Im not saying there is anything wrong with what he did. One hundred percent in one month is an amazing deal for him and he should be proud of it.
ps. you mis read my post, i said put in a long term good credit tenant which adds value to the property and then sell it for an even greater price.
Hold on here. I don’t know where the one month came from or the double the rent. Both of those are not true. If you click on the public record I posted, and click on deeds, you will see I owned the property just shy of 3 months. It also took me about a month and a half to close on it. So I spent a total of 4 and a half months “working” on this property.
I never doubled my rent because I never had a tenant in it. Rookie said it best with his last post, I sold it because I had a chance to double my money very quickly and move on. The guy who bought it was leasing a building across the street with only two garage bays, and he wanted to double his taxi cab business. He made the mistake of telling me he would have to re-write his dispatch if he moved more than a mile away. Did I get lucky? I don’t think so. I never even had a chanced to advertise it for rent, let alone for sale before he found me. I had a deal in the works that was even better than this one in my opinion,but I wasn’t able to sell this one fast enough and it got away from me.
I don’t know that I will make as much as 75K as FDJake said on the home I’m doing now, only time will tell! I have Masonite siding on it that is costing me a pretty penny to fix. I knew it was there when I bought it, but my realtor is saying homes this nice must be perfect and at least 10% under market to sell quickly.
Ok just wanted to clear this up a bit.
John
You have to keep in mind that your end buyer will probably need financing, and in this market, they are going to have more trouble than if you sell it so an “owner occupier” like I did. See it’s much easier to finance the building if you are running your own business out of it, rather than purely as an investment. Sorta like owner occupied vs investor loans for residential.
Thank you for the clarifications.