from tenant to landlord
You would think that anyone who is busy running small businesses would be crazy if they were involved in different industries at the same time.
You\'re basically right.
For anyone other than Warren Buffett, running a plumbing company and a coffee wholesaler has been around for a while.
But who wrote that steep monthly rent check for the office or storefront didn\'t think: \"I made the landlord rich.
I should be a landlord too.
Apparently a lot of small
Business owners have carefully purchased the company\'s stores or offices.
But bolder entrepreneurs are working hard.
Winning Business Intelligence and intimate knowledge of the surrounding community is a more complex adventure: buying commercial properties.
The idea is to fix it, rent it out and get a financial return --
Maintain your original business at the same time.
There are no regrets among the three adventurous entrepreneurs.
\"You can\'t be hurt by dirt,\" says Stuart Paer . \" He was enthusiastic about an investor who had not yet been burned.
Paer owns a mattress company in N Red Bank. J.
And two buildings in the bustling urban area (
And the house he rented to the tenant). In Fargo, N. D.
Jeweler Brad Wimmer was so happy buying and repairing the building that his brother and partner complained that it took up too much of his time.
Ashok Soni started an Oriental Company
A carpet shop near Orlando 17 years ago, but now carpets and floors have become tools to help him and his son Amit expand bad storefronts, warehouses and even front rollersskating rink.
\"We sell carpets and flooring, but actually we are in the real estate business,\" said Amit . \".
Don\'t hit your head when you enter the back showroom of the Red Bank sleep store, 43-year-old Stuart Paer squeezed a small table on the wallto-Wall mattress. A low-
Stairwells and air duct looms hung above the head, which annoyed Paer.
\"People are afraid to come back here,\" he said . \"
But Paer, a big, burly man
There is nothing to do about the post-hair and Goat Beard.
This building is not his. -
His property elsewhere is booming.
\"I\'m making money when I look at you,\" he said . \".
Paer opened a mattress chain in northern New Jersey in early 1990 to sell for \"millions\" and decided to start over.
He had seen articles passing through the revival of Red Bank, a small town of 12,000 people near the Jersey coast, which he began investigating in 2000.
He was immediately moved.
\"It was a rainy day,\" he said. \"I still see people walking around with shopping bags in their arms.
\"After a few more visits, he has a better understanding of retail geography.
\"The southern end of wide street is dead.
I don\'t want to be there.
The west side of Broad is for the children.
Skateboarding and Starbucks are here (Charts)were.
But the east side of Broad is not the same: there are lots of parking lots and I see wealthy adult women walking up high.
The store over there is over.
Paer rented 2,000-square-
In a corner shop on the east side of Broad, the sleeping shop\'s walking space is about $4,000 a month, and then there is a real estate defect.
\"Having this store is the dream of every retailer,\" he said . \".
He pestered the landlord for a while and then took a more efficient approach --
He provided a lot of money.
Other potential buyers bid $900,000, Paer said. \"I offered $1.
2 million, let him keep an office on the second floor belowmarket rent.
He eats like a shark who has eaten meat.
\"Then, he said, he was lucky.
\"Two weeks after I closed, a couple came.
They want to rent my shop. I said no.
They came all the time.
Finally, I said I want $10,000 a month.
$50 per square foot.
The price was around $30. They agreed. Unbelievable.
The couple opened a family.
Furniture store in Chelsea House.
Paer agreed to move his mattress business to town.
A few months later, the man who sold the Paer building moved out of the second building --
Now Paer rents it to stockbrokers for $5,000 a month.
The rent he got from the furniture.
The owner is now $10,000 a month and has added $2. 5% a year.
The monthly home mortgage is about $9,000, and there is an additional $1,000.
The bottom line, says Paer, is: \"I make $60,000 a year in this place.
\"The sleep shop and its four employees moved 500 yards away to a busy National Road in Red Bank.
To Paer\'s surprise, sales were 35% higher than Broad Street, at about $1.
5 million last year. Why?
\"There are a lot of cars on the road, and the traffic lights let people get stuck in front of the store.
I turn the light on and the phone number is visible.
People noticed and came back.
\"He had considered buying his new location from its owner, but Paer was not the only one with a real estate fever.
\"This guy wants too much.
He paid $600,000 three years ago and wanted to triple it.
\"Instead, he took some of the money he bought a mattress a few years ago --
Chain store, Paer bought another building on one of the main roads to Red Bank for $525,000, with a storefront downstairs with an office on it.
\"I\'m under pressure --
\"He washed it and made sure it had a good roof,\" said Paer . \" He spent another $11,000 to renovate the interior. A small phone-
The office upstairs is the service company.
A shop that sells luxury clothing and food for pets, Paw Palace (yes, pets)
Took up the space downstairs.
\"Dog boutique pay below --
\"But I like pets,\" said Paer.
This is a stable year. round business.
I don\'t want something seasonal.
I want to spend $1,500 a month looking for a new tenant, plus a lot of my time and energy.
\"In the face of rising interest rates and falling consumer confidence, Paer remains optimistic about the future of Red Bank.
\"Traffic is good, new buildings are still rising, rents are still rising,\" he said . \"
This is a bustling town.
\"Making money on commercial properties is not always fast and easy. In Fargo, N. D.
The real estate victories of brothers Brad and Randy Wilmer have been going on for a long time.
Fortunately, their day-to-day job is to run the family business Wimmers diamond, which started in 1919.
Their grandfather and father rented 41 years of space at the jewelry store in the heart of Fargo, but in 1980, brad, 52, and Randy, 57, bought two adjacent buildings at several doors down the street to relocate.
Cost: $65,000 for a building on Main Avenue and Broadway corner and $40,000 for space next door.
At first, both buildings had tenants, so they could not take over the corner until 1983.
\"We fixed the upstairs of the building next door and rented it as an apartment,\" Brad said . \".
There is a handicraft shop downstairs.
\"The rent paid for it, but no house prices soared to a very high levelfive about.
The problem is: a decade ago, a shopping mall was opened in the outskirts of Fargo, and businesses were still leaving the city center without a rush.
The brothers decided to pay their bets and also opened a second store in the mall.
\"We did a good job in both of these places,\" he said . \" He pointed out that the income of Wimmers was about $3.
3 million people per year, with 20 employees, \"although there are two employees in the mall store --
Our business is in our thirties.
Six years ago, however, the center of Fargo began to improve.
City officials created the Fuxing District and provided owners with matching grants of up to $25,000, which had spent so much money to repair their buildings.
The city also suspended property taxes for five years in the region.
Wimmers jumped in and stripped off the old 1960
The facade of the times, they can restore most of the beautiful bricks below.
They spent about $300,000 on these buildings, including an overhaul of the interior.
The neighbors did the same.
\"There\'s a woman here who makes a lot of money selling her business to Microsoft,\" Brad said . \".
\"She has done it in hotels, bars and restaurants.
Others are in the restaurant.
Wimmers said their efforts and the work of other owners are being rewarded.
\"In the first 20 years after we bought these buildings, we couldn\'t get five cents more than we paid for them,\" Brad asserted . \".
However, over the past three years, the value of their property has risen to about $600,000, more than the $200,000 they spent on the purchase price and subsequent renovations.
Brad enjoyed the fix.
He bought the third building, adjacent to the two buildings owned by Randy.
\"I like demolition.
\"I like to take the old stuff and fix it,\" he said . \".
Overall, he spent over $400,000 on new purchases and repairs.
Luckily, he found the tenants right away, and their rent exceeded the new mortgage.
Even if there is an uncertain AmericaS.
On the economic front, Wimmers believes the property market in Fargo will remain stable.
\"The value of the whole city is on the rise,\" Brad said . \".
\"I\'m looking at a few other buildings.
But my wife said I had finished the renovation for the time being.
Ashok Soni moved from Canada to Sandford, Florida. .
Part of the reason is that the weather in South Florida is more like his hometown of Delhi than in Montreal.
But Soni also learned some expensive lessons about real estate during his 14 years in Canada, and he is eager to start again.
Soni, 58, a certified public accountant, began importing and selling fashion clothing for junior students in Montreal in 1975.
He soon began to buy abandoned buildings, and later began to buy undeveloped land.
Eventually, with a bank loan and taking advantage of some of the real estate he bought earlier as collateral, he owned 30 buildings in San.
The Lawrence River and several hundred acres of camp.
Alas, in early 1980, interest rates rose to more than 18% and property values fell, and Soni had to return many of his buildings to suppliers who funded them.
He said his assets were worth nearly $15 million at one point, but are now shrinking to $1 million.
When he first arrived at Sandford, a suburb of Orlando, he bought a small building for $250,000 and opened an Oriental Hotel --rug store.
He also began to buy commercial properties again, adhering to his golden rule: always buying at half the price of value (
Based on his intuitive estimate of the cost of replacing a building).
Amit, 21, his son and partner, says it\'s not as difficult as it sounds.
\"My father\'s place to buy carpet shops is one of the busiest intersections in the area,\" Amit said . \".
Three years after Sonis moved in, the state began to widen its crossroads.
In the past few months, nearby retailers have suffered road closures and traffic jams.
Changjian, several owners are eager to sell.
Soni\'s carpet shop was able to withstand the economic slowdown, and he bought two dilapidated buildings next door at a bank auction for $400,000.
This is about half the value set in the tax assessment a few years ago.
\"When the building is over, he has three buildings in a great location,\" said Amit . \".
They used a building as a carpet warehouse and another one for rent to check
A music store that clears about $80,000 a year.
There are other smart purchases next.
Ashok bought a $380,000 car for $20,000-square-
Roller with feet not working
Skating Rink on land where the highway is to be built.
\"The owners live far away and don\'t realize that the new highway will raise house prices,\" he explained . \".
After Sonis won the zoning difference, a charter school turned it into a classroom and paid an annual rent of nearly $200,000 (
More than half of the purchase price).
When the school went bankrupt
A few years later, Sonis was temporarily unable to find tenants who used the building as a warehouse, wholesale carpets and artwork.
Another private school decided to move in.
It will pay $15,000 a month for rent, more than double the $6,700 a month that Sonis ships the building.
Not every purchase is a dunk.
My father bought a tired shopping center in 1989 and couldn\'t find enough tenants at all;
The other rents are low and he is losing money.
Solution: fill it out by yourself.
Ashok thinks the mall is too big and the location is not right.
But hardwood floors?
He reached an agreement with a Swiss manufacturer to ship containers of goods filled with laminate flooring directly to the shopping mall (
25% of retail costs).
Soni turned one of the unrented spaces in the center into a warehouse, storing some floors, and the other into a floor retail center. (
Amit said Sony\'s flooring business paid the family\'s real estate division a continuing market rent. )
Once Sonis fills up some space, other tenants are willing to move into the empty shop there, and the place is gradually filling up.
\"Shopping centers now earn $300,000 a year,\" Amit said . \"
\"The value of shopping centers has risen.
We make money on the floor.
\"The son did not stop.
They bought a former metal in November.
A manufacturing plant of $27 per square foot.
\"We stole it,\" said Amit . \"
\"We bought it for 50 cents.
\"While similar industrial property rents in the neighborhood are around $1 feet, new highs
25 miles from the hotel and a huge Harley motorcycle
The Davidson showroom being built across the street will attract a large number of potential shoppers to the area, pushing up real estate value.
Amit estimates that they can sell warehouses for three times the price, but they hate to sell them.
He said: \"You finally handed over 15% of the profit to Uncle Sam . \"
They believe that the better way is to add value to the property and borrow according to the equity when needed.
Shopping malls, ice rinks, carpet shops and adjacent buildings, as well as metal products
According to Amit data, fab warehouses and some undeveloped land are worth about $15 million.
\"We estimate an increase of 20% last year,\" he said . \"
\"Sometimes it doesn\'t go up at all, but Orlando\'s average annual growth rate is close to 10%.
\"If others question how long this growth will last, Sonis will not.
\"The per capita income in this county is very high.
\"Per capita income and a lot of people move in,\" Ashok said . \".
He wants him to have investors so he can buy more properties.
Is Amit concerned that he has leaked too many secrets about how his family does business? \"Nah,\" he says.
\"Most people don\'t have the courage to do what we do.
You have to jump in.
\"Small in tears-
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