My second Investment property was a vacant bar/tavern in a small town that had gone out of business, right on the frontage road of a 4-lane US highway. It was purchased as a partnership with my uncle. We were going to buy this property and get it ready to run a bar and restaurant. Then, we were going to be owner operators of the business.
We made the offer and purchased the property for $73K on a contract for deed in 1990. We each put up as I recall something like $5K for a down payment.
I was 30 years old at the time. The building was about 100 miles from my house. I continued to work my full time job.
My uncle and I worked quite a bit getting ready to open the restaurant. I was there every weekend cleaning, tiling, etc. It had a sleeping quarters in the back, so I could work long hours and get up early and work some more.
We picked a name, got tax ids and many licenses, developed a menu, worked with suppliers to get inventory, and did all of the things that a normal startup business would do. Since I had already had 15+ years in the hospitality business, I had a pretty good idea on the basic plan of attack, but it was a lot of work. It was my first real experience as an entrepreneur.
We rebuilt the actual bar, buying a section from another place that was going out of business. The guy just asked “How many feet of bar do you want?”, after you told him, he got his tape measure and chainsaw out, and the rest of the work was your own.
We did a total remodel of the kitchen, in order to pass a health inspection. We closed up windows, lined the walls with the glossy fiberglass liners you see in kitchens, tiled the floor.
We hired a contractor to remove a concrete block wall in the main restaurant area, to open up the floor plan.
I went to multiple restaurant auctions to purchase equipment to run the business. It was a great plan, and it fell in place perfectly.
On 7/1/1990, at precisely midnight, our liquor license took effect. We opened up to a large crowd of local people that we ready to party and spend money at the new place in town. After only one hour, it was closing time by state law. It was a great hour.
We ran the business successfully for five years. I learned the benefits of owning a business, taxes, depreciation, business write offs, etc. It was a great place to learn, but the amount of money and cash flow was limited.
And that leads me to my third property. In the summer of 1994, I traded my equity in the business and restaurant building to my uncle and partner, for the equity in his home. I remained on in the business for another year as bookkeeper and doing other back-office work like payroll. It was a great deal for my uncle; the house was getting too large for him and had a lot of deferred maintenance. It was a great deal for me, as I needed a larger place. He had lived there for 30 years; it is still where I live today. Property values have climbed quite a bit since then, and I like where I am living, so it has worked out well.
Have you purchased a property? Maybe multiple properties? What was their purpose? Investment? Vacation spot?