REB 131: The Deal I Could Not Pass On!

Sometimes you have to take the leap, even if the timing isn't right.

Transcript

SPEAKER_00 0:02

Hey everybody, welcome back to real estate bites. This is episode 131. So um might notice I'm in some new digs here. This is the new office. This is a this is a deal I couldn't pass up, guys. Um the new office here on Colorado Avenue in Sheffield Village, back inside the community where I live and operate, um, and coach, etc. Uh, so super excited to be here. But you know, I tell you guys, the story behind this, I just opened this brokerage in June of last year, and I had rented this spot uh in Avon Lake in Learwood Plaza and was thrilled to absolutely be there. Uh, you know, I uh had looked, I was looking deep into Cuyahoga County, right? Southern Cuyahoga County. Um, toward a place in Westlake, toward a place in Elyria, you know, so I was all over Lorraine and in Cuyahoga County. Um, and then I found that place in Learwood, uh, the little 1200 square foot spot. The price was right, the location was fantastic, the amount of traffic that would come through, uh, or at least come in front of my storefront every single day was incredible. So I was just thrilled to be there, and then and then I saw this place, right? I saw this place come online, and I had to go and check it out. Um, I had no intent of moving, right? I I had no intent of uh I had planned on being there at Learwood for the at least the five-year lease that I had signed with the landlord. Uh, but I saw this place and and I had seen this place come online before. I mean, it was on the market well prior, and I remember looking at it thinking, man, that that would be great to have my office there, very close to home, in the community where I live and play. Um, you know, and uh, but it just really wasn't in the cards. Um however, when I saw this one come back online at a much reduced price, I mean it was it was $23,000 less at list price than when it originally listed quite some time before that. And I I couldn't pass it up. I so I came and I toured and you know, I took a look at it and I thought, you know what, if I could even get it a little bit less than what they're asking, and they were asking $72,000 at the time it finally came on. They started at 95, got all the way down to 72 after the last time it come on the market. I put in an offer at 65. We finally negotiated to 68, and I was in. Um the place next door to me just sold for 110. So the equity in here is incredible to realize. Now you can see here, um, when uh you take a look behind me, I got a lot of work to do, and uh, but I had to get. I mean, the the scary part about this deal was I still have this contract, I still have this lease until June of 2030 with the owner and landlord at Learwood. So I had to find a subtenant, and I got under contract to purchase this place before I ever even started advertising the sublease over at Learwood. And then, of course, once I found a prospective subtenant at Learwood, I had to get permission from the landlord for them to come and operate their business there. So the way things worked out though, man, it was just incredible. I uh two days before I actually closed on the deal to purchase this business condo, the subtenant showed up, found the place, was thrilled, wanted to write a posit that day. Ultimately, we gathered enough information from her and the hair salon that she's going to put in the old place, the old place at Learwood, right? I just bought what used to be a hair salon and turning it into my broker's office, my brokerage office, rather, and she is moving into what used to be my brokerage office and turning it into a hair salon. Uh, but you know, had to gather the right information from her to present to the landlord for him to say, okay, it's a go. And uh the way things have worked out is incredible. So, you know, I was, I'm not gonna lie, I was I was a bit nervous and scared that I was gonna have these, you know, first of all, a mortgage here and then my rental payments there, and trying to figure out what do I do, you know, what do I do to try to make sure that I'm not just bleeding all that money all the time. But it just worked out perfectly. And uh still have some work to do. As you can see, I've got, you know, shelving over my shoulder here that I've got to put up. That ugly file cabinet behind me is gonna go. Uh, this door to my right doesn't even have a doorknob. Uh, so there's still a lot of work in here, but I do have a fully functional office for the uh the place. I mean, the other thing was, you know, I spent 40 grand last year to open the the business and the last office, and it was another 35 opening this one, and that was with me doing the work. I did not, I couldn't afford to pay a contractor again to come do this build out. So it's been all myself as well as a couple guys helping me. Um, a couple guys within the brokerage. My father's been an incredible help. He has been here a lot painting and uh, you know, doing work. And uh at 75, thanks, Dad. I appreciate it. You uh you kind of busted your tail, and I know it was not terribly easy, but had to do all the work ourselves this time, um, putting these floors in, painting, getting it ready. Uh, there was all the demo work, of course, you saw in the slideshow before. This was an operating salon, and there was a lot of wash stations, etc., to to tear out. I still have to get my plumber in here to cap off a lot of water lines that are no longer necessary. Um, but yeah, hadn't hadn't to do all the work myself. In the meantime, you know, um trying to make sure that the old place is cleared out because, you know, possession, the the new subtenant took possession just uh last Friday. So it was just a week ago that we finally moved in here full time. So the mad dash to get this work done. I mean, I was here at 4:30 in the morning at least twice a week, painting, cutting, putting in flooring, putting in, you know, uh quarter round, whatever. Well, all the stuff that we had to do to get this thing built. Early, early mornings, getting this work done. Um that in addition to actually running a brokerage and and you know showing houses, showing properties, showing commercial properties, analyzing commercial deals, um, you know, running a business. Uh, it's been a very hectic, very hectic month. But we're in, we're thrilled. And again, I I couldn't pass this one up, guys. This is uh this is the new home for a long time to come. And uh just wanted to come on this week and share a little story. Uh, and uh that that was that was the main topic for today's real estate bites here. So that said, let's get into some stats. Let's take a look at what's been going on in the local marketplace here. So here are uh once again, you know, I'll cover this uh for new viewers or people who don't necessarily know, but I take these statistics from the MLS. Um, these are only for Lorraine County. Uh yes, counties, markets differ. Like Lorraine County is the fastest growing county in Ohio. Um, but when you look at these stats, they they really bear out very, very similar to other similar counties, such as Medina County, Huron County. You know, the the counties that have big metropolitan areas, you know, Cuyahoga, Summit, um, the these, you know, Franklin, the metrics are a little bit different, but from what I see, the trends that I look at when I look at this set of statistics every Friday, they they pretty much carry not only throughout Northeast Ohio, but the whole state as well as the Midwest. And so let's get into it. Um, I look at median values for most of these things because when you're looking at a median value, it really eliminates the outliers in your data set, right? So let's take a look here. There were 407 single family uh and condos for sale this morning. So that's what's available in the market in Lorraine County. Only 407 units. Inventory, in my opinion, we're we're in an all-time low demand phase as well. So we still have all-time low inventory, however, all-time low demand. But the reason why prices continue to re remain flat is because of the inventory. That is the story, guys. I mean, even with all-time low demand, the reality is there are still people out there who want to buy a house and they want to buy a nice house. And so when the nice house shows up, uh, there's still a competition for it. Um, I just showed a house yesterday to a guy who fell in love with it. He calls me this morning, says he wants to write an offer, went under contract last night. I mean, it's it is a tough market for buyers still, even with all-time low demand. I do think that low demand has caused prices, and we'll look at this a little bit deeper here in our stat line um in a bit. But I think it's caused prices to just sort of level off. But it's it's still a hard row for buyers. It is still very much a seller's market, in my estimation. There were 81 closings last week. So we you saw this 45, that was low. I think our all-time low since I've been tracking this for a little over two years was right around 36, 37. Uh, so we had uh 45 closed the week prior and 81 closed this past week. The median square foot of homes sold last week was 1,707 square feet. Median sale price was 280,000. The median square foot value was $174.05 per square foot of the homes that sold last week. So this is where I'm talking about looking at prices and how that they are, what are they doing? What's the price action doing? So I thought we were gonna see a large correction from Q4 2025 to Q1 2026. And you can see at the end of Q1, the average median square foot value was $167.60. And that was actually an increase from Q5, Q4 2025. So much to my surprise, I saw these low numbers hit the 158s, the 160s, 157, 160. But there were enough weeks where we saw 183, 182, 178, right? 170, that the average median square uh foot value actually increased by 41 cents when I thought we were going to see a correction. So now we start off Q2, right, with some decent square foot values already, 175.19, 174.05. Um, as the selling season picks up, I expect to see this number increase. All right. So what we did see though was a big correction from Q3 to Q4. Remember, we at when Q3 wrapped up, it was 175.54 a square foot. Then we are down to 167.19. That 41% appreciation or 41 cent appreciation per square foot happened in Q1. And I think we're gonna see this number grow. And I think by the end of the selling season, we're gonna have numbers to rival this once again, if not exceed it. All right, the big sale of the week was oh, I'm jumping ahead here. Median days on market were 30. And then the interest rate on the 30-year note was 6.32 percent this morning when I checked these stats. So we st we still remain, you know, we we were bumping up there. We got to 6.62 three weeks ago, um, but it's starting to correct and come back down towards that 6% mark where we bounced between 6% and 6.25 for most of last year, and it looks like we're headed to those levels again here. Um, the big sale of the week was right over a million dollars in Avon Lake. This was on Royal Troon, it was new construction, and there were no pictures. So nothing fancy to show you this week, but that is a wrap on episode 131. Just wanted to show you a little story about how I ended up here in this new spot. Super excited to get going here in my community um and in this place where I actually have ownership equity. And uh um, so that's a wrap episode 131. Thank you guys for joining me as always. Look, if you like this stuff, snap that QR code, share this show with friends and family, keep coming back week after week. As always, take care of yourselves, take care of one another. I love you, people.