Four buildings, the numbers, and the mistakes.

The seller financed the entire purchase. Not twenty percent — all of it, with no cash to him at closing.

He said yes because I already had a signed lease. He was not being asked to carry paper on an empty building; he was holding a secured note against contracted income. That is a completely different risk and he understood it immediately.

The tenant is also funding the renovation — a commitment north of $150,000 into a building I own. In exchange they got a rate that reflects it. The caution: the rent still has to make sense on its own. You are trading rent for capital, and that trade only works if the rent stands up the day that tenant is gone.

The tenant paid half rent through the construction period.

On a build this size you carry construction debt for months with no income against it. That gap is the scariest part of the whole structure and it is where these projects go wrong. Half rent during construction covered a meaningful part of that carry.

Why would a tenant agree? They wanted the building, the timeline mattered to their business, and I asked. It cost them something and it bought them certainty their landlord would not run out of money halfway through. Nobody offers this. You have to ask.

Nothing clever happened here, which is exactly why I teach from it.

I found a company that needed space in that market. I got their specification. I found a building that matched. The lease was signed before I owned the building, contingent on my acquiring it.

Then I took three documents to a bank — the purchase contract, the lease, and a pro forma — and the arithmetic did the work. The bank was not evaluating whether I could fill a building. They were reading a signed lease from a company with real credit.

I skipped the Phase I environmental. It felt like a small line item on a deal I already wanted.

Then we found out the site had been a gas station. By then we owned it. All of the leverage was gone — we could not renegotiate, could not walk, could not push the cost to the seller. Under CERCLA the current owner is responsible regardless of who put the fuel in the ground.

It cost about $12,000, and every dollar was avoidable for roughly $1,500. Here is the part that still bothers me: nobody hid it. It sat in the historical record the whole time. We just never looked.