The Property
The Mike Watson Institute partnered on this property with a group of MWI students in Phoenix. These successful students are Wayne Hyatt, Martha Holmberg and Irene Kutz.

This property is a great example of simply finding a property that is not living up to its most dense use or highest and best use. You can find great properties like this in any market and any market condition.
The property is located on a major road in Phoenix, just South of the main East-West freeway I-10. The zoning is C3 for the highest commercial zoning, so it opens up many options for commercial properties.

The Find
This was a Non-competing method. We were contacted by an agent that knew us and aware of our interest in purchasing property in the area. The agent contacted us prior to listing the property in hopes of a quick sale for their client. We made it a win-win deal and purchased the property before it was listed.

Current Use
Property was a neighborhood bar. The existing building is 2,346 square feet on a 1.3 acre lot. We knew this was not the properties’ highest and best use!

The Technique
Getting our name out there amongst other agents in the area and letting them know we are investing agents and may be interested in their client’s properties. We knock on doors, send out letters, talk to other agents…follow the MWI program as Mike has laid it out.

Highest and Best Use
Refurbish the current structure and build two other new structures of 3,200 sf and 8,750 sf for a total of 14,296 sf of C3 property. The lease rates in the area range from $2/sf/month to $2.50/sf/month. Projected cash flow from leasing is about $31,000/month. See the architect’s conceptual site plan, in the image above.

Acquisition Price
Acquisition price of $390,000. Sale price of $625,000.

The Contract
The buyer is using a 1031 exchange to buy the property and has plans to develop the property according to the architect’s drawing we had developed.

The Result
The short-term plan is that we are offering the property as a future commercial property suited for adding building space for lease or purchase.

Our long-term situation had three options:
1. Build out and keep as a rental
2. Sell as a whole (14,296sf)
3. Sell partials as commercial condos.

Our marketing target was either a builder/investor or a small business owner in the area that would purchase the property, locate their business in one part, and lease the other buildings to other businesses to pay for the investment.