Key Takeaways:

Transition to commercial: Matt moved from student housing to commercial to reduce headaches, work with business owners, and gain more control over value via NOI and cap rates.

Deal source & story: Found the property on Crexi, often written off by investors. Former owner retired, left the building ~70% vacant but already subdivided with good bones (1989 build, mostly cosmetic issues).

Location & upside: Building is next to Lowe’s, effectively leveraging corporate site selection. Strategy is forced appreciation via lease-up at market rents and then refinancing at a conservative ~9% cap.

Financing structure: Purchase price $240K, fully funded with private money (family + local investors) at ~10% interest, 2-year term, interest/principal deferred, no prepay penalty—pitched as a safe, bond-like investment.

Due diligence wins:

Held $5K in escrow for seller’s junk; used itemized cost estimates (with AI help) to justify keeping it, then bartered with contractors to clear it at no out-of-pocket cost.

Verified floor plans and discovered a tenant had taken an extra 1,000 sq ft; renegotiated to increase rent (to ~$2,000/mo) and convert to triple net.

Main risk: Timeline to stabilize and refinance within 2 years; Matt wishes he had negotiated an extension option with private lenders.

Support & underwriting: Leaned on mentors, local brokers/appraisers, and the accelerator community (notably Chris Thorndike) to stress-test rents, cap rates, and long-term exit strategies.

Tax strategy: Pushed to close on Dec 30 to enable cost segregation and bonus depreciation for that tax year.

How to replicate:

Don’t ignore Crexi/LoopNet—good “hiding in plain sight” deals exist.

Target Boomer-owned businesses where owners are retiring and want to sell or walk away from their real estate at low prices.

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