We turned a non-ideal property into a $338K profit over just 2.5 years.
Located at 5805 S. Archer Avenue near Midway Airport, this high-traffic spot (20,000+ cars daily) sat in a strong demographic area with 80,000+ people nearby and an average income of $83K.
At $52 per square foot, the numbers looked promising.
Finding Opportunity
Despite targeting industrial buildings, this retail-automotive site caught our attention.
The owner, Bob, had run A-OK Automotive for over 30 years and was ready to retire.
He needed a confidential deal with a fast close and short leaseback.
We structured a 90-day close with a 6-month lease, knowing we'd have an empty building afterward.
After studying comparable properties, I confirmed auto use still had strong demand in the area.
While quick-service restaurant brokers dismissed the lot as too small for major chains, I trusted my instincts.
We moved forward using hard money: 20% down, 11% interest, 2 points, with a 12-month term.
Win-Win Solution
The turning point came when Ricardo, Bob's general manager, expressed interest in leasing the property.
The challenge? He lacked capital for equipment and startup costs.
We solved this by:
- Purchasing Bob's equipment for $25K
- Financing it to Ricardo at $2K/month
- Securing a 10-year lease at $7/sqft NNN with 3% annual increases
Financial Restructuring
During the 6-month lease finalization period, we invested approximately $80K in critical improvements, including replacing half the roof and tuckpointing the building.
Once the lease had seasoned, we refinanced through Heartland Bank, pulling out 90% of our basis and dramatically improving our cash position.
The Profitable Exit
A year later, we listed the property for $1.4M.
While we received offers around $1.2M, we initially held off.
Ultimately, Ricardo himself purchased the property for $1.2M, using SBA financing through Heartland Bank.
Thanks to our contract structure, we avoided broker fees on the sale.
The Bottom Line
- Total timeframe: 2.5 years
- Net profit: $338,000
- Key strategy: Patience, creative structuring, and win-win terms
Finding deals like this requires consistent outreach. I break down the process in my guide to off-market deal sourcing.
Conclusion
Real estate success comes from solving problems at the intersection of people and numbers.
Sometimes you gain equity, sometimes experience—but the best deals deliver both.
