When I got into commercial investment, it wasn’t for the material things. I worked in construction for a number of years and had seen Commercial Real Estate Investors and Developers with their expensive suits, fancy watches, and imported cars but none of that really had any appeal to me.
What I wanted was a bit simpler. I wanted time to enjoy my life. I wanted to be able to set up something for my children. I wanted financial freedom. But, there was a problem. In construction, retirement at the age of 60 came at a pretty high price.
Everyone in the construction industry knows that you’re going to need surgery on either your shoulder, your back, or your neck if not all three by the time that you retire.
I didn’t know how I was going to accomplish my goal of financial freedom until a man by the name of J. Scott Scheel gave me a gift. It was a gift that I used to buy my life back.
Before meeting Scott, I tried starting my own business as a subcontractor. What I found was that every time a job ended instead of sustained growth, you were essentially starting your business over from day one.
After a few years of being my own boss, one of my foremen asked if I’d like to consider working with him to flip houses. So we started our flipping business through buying homes throughout Illinois and flipping them for profit. At the time I was doing okay. The banks were open and they were writing loans on assessed value instead of the actual purchase price which was pretty common back in 2005. But, it’s not something that you see all that often post-recession.
We were making money, not as much as I would have liked to, but enough money that I was starting to see some positive cash flow.
Then, one day, my partner and I decided to broaden our horizons by going to a Real Estate Wealth Expo event in Chicago. After sitting through a couple of presentations on how to increase the profits of our house flipping business, I decided to listen in on a seminar about Commercial Real Estate Investment.
This is when I met J. Scott Scheel and the Commercial Academy. Scott was teaching not just about how the commercial side worked but he was warning everybody in that room in 2005 that the market was due for a correction. He advised each and every one of us that if we wanted to really invest and be successful in Commercial Real Estate that this was the time to do it.
I was thinking to myself “Yes, this makes total sense!” And, before he finished with his speech, he pointed to me in the audience and said. “This guy gets it.”
Oh I got it. As soon as we got home I told my partner that we had two options: Either we were going to sell off all of our residential properties and work together to invest in Commercial Real Estate or we were going to split up the portfolio and I was going in on it alone.
He didn’t want to take this next part of the journey with me. So, after a lot of deliberation on who would take what, we parted ways. I was lucky that I broke off when I did as the lender which we had been working with had to put a cap on our credit line.
I started off running. I purchased Scott’s software, his coaching subscriptions, and went to the seminars. I probably evaluated over 100 properties in my first two months and only sent in about 10 which I thought would work with my current situation.
With the coaching of Scott and his team I bought my first commercial deal which was a set of apartments in Davenport, Iowa. It was in a rough neighborhood, but I wasn’t planning on investing in these properties long term. I wanted to get in and get out allowing me to keep my liquidity before the market came crashing down.
Luckily, through the combined efforts of the local police department and some other local investors, we were able to clean up the area which allowed me to net about $100,000.00 when I sold it three months after purchasing it with next to no money down.
Once I started to build up my cash reserves, I started to look for bigger, better deals. I used one of Scott’s techniques which was a direct letter campaign to owners who may be looking for a way out of a sticky situation which helped me find my second deal. It was a mobile home park in Colona, Illinois that was built in the 50’s and was passed down to a group of grandkids who didn’t know how to make it work. After reviewing it with Scott and his team I had my plan for success.
When I bought the mobile home park, the sellers carried back 90% of the financing in a seller financed structure. Scott and his team worked with me to parcel off two lots at the front of the property, which we were able to change the zoning on allowing us to build out two commercial spaces one of which was a gas station/truck stop.
The real value of this property came with restructuring the utilities from liquid petroleum to natural gas. Once that was complete, we doubled the lot rents and the tenants didn’t even blink now that we reduced their utility bill.
In 2007, just before the market crash, I sold off the mobile home park component for a profit of nearly a million dollars, but, based on Scott’s advice, I was able to keep the two commercial lots for their annual rent since they were owned free and clear.
When I look back at that deal I still can’t believe it was only the second property I had purchased. In 18 months I’d made my first million, and I wasn’t stopping with this one deal. I knew that there was so much more I could do and so much more I could accomplish with the team I had supporting me.
In 2008, per Scott’s advice and the continued support of the Commercial Academy, I was buying up foreclosed commercial properties in multiple categories all across the Midwest. My eldest son even got involved, purchasing his first 40 unit apartment complex back in 2009.
It’s been over a decade now and when I look back all I can think about is the freedom that commercial investment has afforded me. By finding the right individual with a wonderful team behind him to guide me through my investments and create a strategy, I’ve been able to buy my freedom.
That to me was the greatest gift that anyone could have ever given me and it’s something that I get to share with the people I care about. I relocated myself and my wife to Florida and have gotten to set up each of my children with their first homes. I get to take my grandkids on family trips to places I dreamt about when I was a kid. And I get to work with other investors to make their dreams a reality, the first step of which is by telling them to attend one of Scott’s trainings. It is truly life changing.
Kickoff 2019 with the start of your Commercial Real Estate Career! Take your first steps towards financial freedom and attend our upcoming Commercial Property Academy Live Event March 1-3 in Orlando, FL. Learn More.