Now that we’re closed on our last building, it’s time for another project. This time we have come to terms on a mixed use building with 3 apartments and a main floor commercial flex space. If everything goes to plan this should close at the end of March.
The plan for this building is what we refer to in commercial real estate as “stabilization”. At the moment, the building is 50% vacant. And the tenants occupying the other 50% are not paying market rents. We were able to pay a lot less for this building for that reason.
Our plan to stabilize the building will be to renovate the apartments as needed and rent or renew spaces at market rent. We will renew the commercial tenant with terms that will bring them up to market rent by the end of their new term.
Then we’re going to add additional income sources in the building. There is a clean and well-lit basement with will be perfect for adding coin laundry as well as storage units for each apartments. There is a larger storage space in the rear of the building not currently being rented. And we will be looking at adding vending machines in the main lobby.
With all of this done, we’ll have 4x’d the cash flow of this building and thereby massively increased our equity. Then we’ll finance it with a traditional loan, pull all of our initial capital out, and move on to the next one.
Want to learn how to do this too? Let’s chat!