After 15 Real Estate Transactions, I can finally say I hit a homerun
I wanted to share my latest deal, along with some motivation for anyone out there just getting started or feeling like they're not progressing fast enough. Over the last six years, I've been building my real estate portfolio, learning more every step of the way—whether it be from hands-on experience, doing deals, listening to podcasts, or reading books. Most people can agree it's a very slow process to build a portfolio, working to accumulate more units and reach financial freedom. I want to share my most recent deal because I believe it is a true testament to how the small wins and knowledge gained compound over time, resulting in the hockey stick of exponential growth.
Back in April of this year, I purchased a 5-unit commercial property after only investing in small multi-family properties prior to this. I saw the potential in the deal and knew that if stabilized correctly, it could become one of the best properties in my portfolio.
I purchased this property for $200,000. The anchor tenant in the property was a state agency whose lease was ending, and they were moving to a new location. The bank I normally worked with didn't want to finance it due to this tenant leaving since they accounted for 50% of the monthly rent. I acquired this property with a 20% down payment and an 80% seller financing note with a 2-year balloon to allow myself enough time to stabilize it and get longer-term commercial debt on it.
Over the last 7 months, I was able to raise the other 4 units to market rent and lease out the larger 5th unit to another state government agency on a multiyear lease. I also got the taxes reassessed and cut by more than $7k per year, due to the tax assessment being overvalued compared to my purchase price.
I just went through the process of getting a 25-year commercial loan put on the property with my usual lender. The new appraised value came in at $300,000, which allowed me to take out a loan for $200,000 to repay the seller financing note and get back all of my down payment. They also increased my line of credit by another $40k due to extra equity within the property that I can now use to acquire more units. So, I was able to get almost all my cash out of the deal, besides some closing costs and legal fees for the tax assessments. The property now cashflows $15,000 per year after all reserves, and I created $100,000 of equity in less than a year on this deal.
I share this because six years ago, I didn't have a clue about real estate or how to invest. It's because of communities like this and the education they provide that I was able to get to this point. It definitely takes time, and not every deal will be a home run, but if you continue to learn and grow, anything is possible.
Amazing story and great win!
You did alot of right things to make it work, and that could have only been done by putting in the work!!
How did you find the new anchor tenant?
Quote from @Obed Calixte:
Amazing story and great win!
You did alot of right things to make it work, and that could have only been done by putting in the work!!
How did you find the new anchor tenant?
Thanks Obed,
To find the anchor tenant I worked with an agent I 've worked with on a few deals in the past. I lease out all my own residential units at this point. But due to this one being the first commercial property I purchased, I knew it would be helpful to leverage their network in the commercial space.
Smart!
I look forward to hearing more great stories like this in the future.
Wow That's is great. Can you tell me any good sources how I can possibly find these deals in Florida ? I would love to get my feet wet with a deal. I've been in the restaurant business way to long these 8o our work weeks are catching up to me lol
