So, let's get started by taking a look at a property right here in my hometown, Salem, Oregon.
It's a multi-tenant mini strip mall. The owners are liquidating their assets and this is one of their last. As long as I can remember, it's attracted problem tenants. None have stayed long, and one, in particular had some real potential, but the business owner screwed it up.
At any rate, it's a 5 unit complex. I wrote about it recently to my LOS Members (if you are not familiar with my LOS Program, you should be. Shoot me an email: Jerry@JerryJonesDirect.com to learn more). Here's what I wrote:
Hey Everyone,
For about two or three years now I have been watching a deal unfold before me. It's now, I believe, time to act. Sometimes these commercial deals take a lot of time to wind-up, and create a "ripe-for-the-pickin'" opportunity.
One of my long-time trusted commercial brokers, Dave Shuford, whose handled everything from leases to sales for me, has been managing a small "mall" (I use the terms loosely) with 5 or 6 tenants that certainly has had its struggles. For one, the parking is very limited and that has been an issue. The owner's are an older couple living on the Oregon coast, and it's time for them to cash out and enjoy life.
Oddly, two weeks ago, one of my yellow letters to out-of-town owners generated a call from the guy. His name is Lee Clemens. We talked for a bit and he let me know about his mall. Before we finished the conversation we found we had a mutual friend in Dave, my commercial broker. Dave incidentally, he says, has the property listed (I knew this to be the case.).
Before I go further, let me tell you the DOWN side of this property investment:
1) Minimal Parking
2) No giant anchor tenant (It's really not conducive to one anyway due to parking)
3) Deferred Maintenance. There's a good chunk that COULD be done, but not necessarily right away.
Now, here's the positive:
1) Mgmt in place (Dave)
2) Tenants in place (all spaces are currently rented, however, 2 SMALL spaces with minimal rents will become vacant soon)
3) LOCATION, LOCATION, LOCATION. This property is absolutely in the path of progress and is located on South Commercial Street, just past the City Offices, Town Hall, Library and...a HUGE re-development project that has broken ground and is under construction with roughly 60 units of commercial and residential condominiums.
4) Sales price is LESS than the tax assessed value which means one of the first things I would do is file a property tax appeal. If you were on last week's call you know this means there is an opportunity to reduce yearly expenses and increase the profits.
5) There is a rent increase upside to increase revenues. However, this will come with tackling some of the deferred maintenance.
The strategy here is buy, hold and let the rents cover a chunk of the expenses, and as time passes (5 yrs or so?????), we'll be gobbled up in the re-development process, which is literally just down the street a few blocks and cashed out.
There will be some feeding of this building. BUT, it's the long-term gain that is enormous.
So, all this said, I am looking for a group of folks that want to go in on this deal and purchase it via an LLC.
Based on interest levels, I plan on having a conference call for this property mid-next week.
if you are interested, please email, fax or call Melody. Her email is melody@jerryjonesdirect.com. Phone: 503-339-6000 and fax is below.
I have a guess that the interest level will be high.
Also, the minimum investment into the LLC that holds the property will RANGE from $20,000 to $30,000 or more. I just don't know yet. Purchase price will be in the $400,000 to $450,000 range. Again, I have not even started the negotiations, so this is just a prelim email to gauge interest.
Let me know if you are interested and we'll get you the call-in information and times for next week. Thanks, Jerry
If you'd like to follow along and gauge the success/failure of this coming together, stay tuned. We'll see what happens.
I'm also reviewing a small property over in Depoe Bay on the Oregon coast. It's a .41 acre lot. More to follow later on.
Now, go make an offer(tm)!
~Jerry
For about two or three years now I have been watching a deal unfold before me. It's now, I believe, time to act. Sometimes these commercial deals take a lot of time to wind-up, and create a "ripe-for-the-pickin'" opportunity.
One of my long-time trusted commercial brokers, Dave Shuford, whose handled everything from leases to sales for me, has been managing a small "mall" (I use the terms loosely) with 5 or 6 tenants that certainly has had its struggles. For one, the parking is very limited and that has been an issue. The owner's are an older couple living on the Oregon coast, and it's time for them to cash out and enjoy life.
Oddly, two weeks ago, one of my yellow letters to out-of-town owners generated a call from the guy. His name is Lee Clemens. We talked for a bit and he let me know about his mall. Before we finished the conversation we found we had a mutual friend in Dave, my commercial broker. Dave incidentally, he says, has the property listed (I knew this to be the case.).
Before I go further, let me tell you the DOWN side of this property investment:
1) Minimal Parking
2) No giant anchor tenant (It's really not conducive to one anyway due to parking)
3) Deferred Maintenance. There's a good chunk that COULD be done, but not necessarily right away.
Now, here's the positive:
1) Mgmt in place (Dave)
2) Tenants in place (all spaces are currently rented, however, 2 SMALL spaces with minimal rents will become vacant soon)
3) LOCATION, LOCATION, LOCATION. This property is absolutely in the path of progress and is located on South Commercial Street, just past the City Offices, Town Hall, Library and...a HUGE re-development project that has broken ground and is under construction with roughly 60 units of commercial and residential condominiums.
4) Sales price is LESS than the tax assessed value which means one of the first things I would do is file a property tax appeal. If you were on last week's call you know this means there is an opportunity to reduce yearly expenses and increase the profits.
5) There is a rent increase upside to increase revenues. However, this will come with tackling some of the deferred maintenance.
The strategy here is buy, hold and let the rents cover a chunk of the expenses, and as time passes (5 yrs or so?????), we'll be gobbled up in the re-development process, which is literally just down the street a few blocks and cashed out.
There will be some feeding of this building. BUT, it's the long-term gain that is enormous.
So, all this said, I am looking for a group of folks that want to go in on this deal and purchase it via an LLC.
Based on interest levels, I plan on having a conference call for this property mid-next week.
if you are interested, please email, fax or call Melody. Her email is melody@jerryjonesdirect.com. Phone: 503-339-6000 and fax is below.
I have a guess that the interest level will be high.
Also, the minimum investment into the LLC that holds the property will RANGE from $20,000 to $30,000 or more. I just don't know yet. Purchase price will be in the $400,000 to $450,000 range. Again, I have not even started the negotiations, so this is just a prelim email to gauge interest.
Let me know if you are interested and we'll get you the call-in information and times for next week. Thanks, Jerry
If you'd like to follow along and gauge the success/failure of this coming together, stay tuned. We'll see what happens.
I'm also reviewing a small property over in Depoe Bay on the Oregon coast. It's a .41 acre lot. More to follow later on.
Now, go make an offer(tm)!
~Jerry
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