Chris Prefontaine and Jessica analyze a $321,000 mixed-use property with a commercial kitchen, studio apartment, and separate house, all on one deed and free and clear. The seller wants owner financing. They plan to find a buyer who'll run a food business and live on-site, then call the seller to nail down the monthly payment and term length.
Chapters
I want to start a business. I have no credit. I have some cash.
This is a seller who has a commercial building. It was a restaurant that was only open for 6 weeks. It's just a kitchen, and on top of it is a living quarter. It's basically like a studio. On the same property and parcel deed is a 1-bed, 1-bath house. That is currently rented out by his cousin, I believe. And then he has 3 other properties. All of them, the house and the one bed, one bath are on the same deed. All the other 3 houses are on separate deeds. Well, so it was listed with a realtor and didn't sell. He was trying to sell all of it together. Then once it expired is when I met him. And then at the time I was working with Steve who said it wouldn't be a good fit for us since it's a commercial property. So I just kind of let it die to see if he would, if he could sell the commercial and then we could potentially work with the homes. And as I was following up with him recently, it had listed with a realtor again and still didn't sell. Now instead of selling them all as a whole, he just wants to sell the business and the one bed, one bath house that are on the same deed. And so we're just trying to see if we could make something work. It's free. All of them free and clear.
Okay, so I— did you guys see that I blew it up?
Yes.
Yep.
Okay, um, so the yellow building, that's the commercial, and then the one behind it is the house.
This one?
Yes.
So these 2 are the ones he wants to do together. Are they already separate deeds? If you— I'm sorry if you already said that.
Those are the same parcel, same deed.
Okay, um, Do we have numbers on these 2?
Numbers for what he wants to purchase?
What he wants to purchase. Is he— he's free and clear? Package?
It's free and clear. Both— all of them are free and clear, and he wants $321,000 for those 2.
Do you have comps for just the house, hypothetically?
Not off the top of my head.
Okay, so I think I would just treat it— I'm just spitballing aloud with you guys. I think I would treat it as— I don't know what's around this. So that's my next question. But I think I would treat it as a regular deal. Regular. But your niche audience for this is someone that wants to operate a business and live there, clearly. Right? Yeah.
He said he got a lot of feedback, like a lot of interest in the business itself, but people didn't want all of it. They just wanted the business to the left of it right there. Is a gas station. And then, yeah, right there.
Huh. Okay, so what is this zone for? I'm very curious.
Oh, he said there's no restrictions, that you could do whatever you wanted to tomorrow. There's no— it's in the, um, county, not the city, so it's not as regulated.
All right. I mean, down the road, if we put this up— excuse me— on a purchase and sales, we're going to want to have a contingency to look into the town because I've— in the most rural areas, I've never heard of it being like wide open, do whatever you want, right? So that's side note. So I don't know, Jessica, I wouldn't do anything else with this but look at what— how many bedrooms in this house right here?
It's just a 1/1.
1/1.
It's like 780 square feet or something around there.
I think my only conversation with him would be, look, I Based on being on the conventional market, we do have a totally different market. This is totally unique. So let me take it to market, see what I can do. Is he more prone to an AO or owner financing? From your conversations, do you know?
Owner financing. I haven't talked with him about an AO. It's always been owner financing.
No, it's good. I'd rather do that and then go there as a backup. Unless I'm missing something, the only thing left would be comp the house like you normally would. See what that building— I know it's hard, but look around, see what else is available for rent, businesses like this? Just ballpark, if you put your buyer hat on and try to probe around online and see what's for rental on that type of building. Not as easy, but you'll get a rough idea on the math. And then do you have any clue what he wants monthly if he was to owner finance?
Mm-mm.
Okay.
That is something we have— I haven't gotten back into. I know we talked about that initially, But I don't remember what that was. And I haven't gotten into those deep conversations because I didn't know if it would even work since it is commercial.
I don't think you have anything to lose as long as you set expectations that you're just going to take it to your different market than the realtors have and see what it brings. I just don't want to set high expectations for you or him. Right. Were we going to call him today anyway, this afternoon?
Yes.
So why don't we just plan on doing that at 4, at least a prelim chat. I have a 4:30 interview, but we can at least get him on the horn and I'll ask him the questions I'm kind of asking you. Like, I'm just going to focus on, unless someone has some feedback differently, I'm just going to focus on, okay, you want $321,000. It's $321,000, right? You said?
Yes.
Yeah. Okay. So if we can get you to that, what's the bare minimum you could take monthly? Because this is totally unique and we're going to try and make it work, but we got to be like aggressive with the monthly. What would that be for you? We get that number. In the meantime, we look at comps.
Okay.
That's it. And then we can take it to market if he's open. We'll see how open he is tonight.
Okay.
That's all I would do. But that helped me to get my head wrapped around it versus blindly calling him when you were gone. Yeah.
Yeah, that makes sense.
Okay. Can anyone else think of any other questions or things that I might have missed? Length of term, obviously. My only concern would be the 1-1. Yeah, big time.
I'm looking for—
we're looking for just a business operator in that business. Can there be any residential, or is there now?
Uh, where the business is? Yeah.
Is there street traffic? Because like, is there like—
yeah, yeah. Yeah, I'm just thinking in front of it is a busier road, and then beside it, uh, there's houses and stuff over there. Yeah.
Okay, so right now if you walk to the building— you haven't walked to the building yet, right?
I have.
You did? Down— what? Explain it to us. What's up and down before we jump off of it?
It's just a completely open kitchen, basically brand new. Uh, they have like a window where you walk up and can order. Inside is just the kitchen, and then upstairs is the, um, It's very— it's all open. There's a small bedroom. It's small, obviously. Bedroom, living room, kitchen, bathroom, closet.
All right. So we have on the property, we have the 1/1 and then we have this big— this little studio apartment. Like a studio.
Yeah.
Yeah.
Yeah. Studio. Yeah, basically.
Yeah. I just think in the rent-to-own world, maybe I'm being too optimistic, that there might be that out there in the rent-to-own world. I want to start a business. I have no credit. I have some cash, or I have a business. I need another. Okay, I don't know. I think we try it. I would again. Just we will tell them tonight. No expectations. This is odd. As you know, you couldn't sell it yet, but I we think we can expose you to more, and we'll try it.
Okay.
If you by chance, Jessica, had the number for the house later, if you don't, it's okay. It would help me a little bit, go a little further with them.
I can look it up between now and then.
Okay. And then we'll tape— we'll record the call and we'll put it on the script channel so these guys can hear it.
