On Sep 3rd 2020 we closed on a 120k sf glove factory built in 1890 in a small NY town.
Has 45k sf of self storage inside and had $14k a month of net operating income at closing.
Let's breakdown this deal.
A THREAD on creating $2 million out of thin air in 18 months...
👇👇
First saw the property on Loopnet in mid 2018. I ignored it. Who wants to try to operate a business in an old factory in a dying NY town.
A few months later I reached out. Broker sent me financials. They were good. $24k a month in revenue and $10k in expenses.
So I visited the property. It was old. Needed a new roof. Full time manager. Only accessible to customers 9am-5pm M-S. No autopay. A lot of folks paying 1/2 market rent.
I loved everything about it.
But I knew they were going to have trouble selling this thing no matter the profitability, so on July 1 2018 I made a low offer. $750k + seller pays for new $250k roof + $20k in environmental work.
Countered at asking price + $100k credit towards roof.
I ignored the response.
Broker called me back mid September of 2018. Make another offer, he urged.
I knew it was a good biz so I got more aggressive - $1MM + seller pays for roof / environmental.
Declined. Countered with $1.2MM but they'd give me a new roof and do the environmental.