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An Inherited Property Pays off Big Time

I inherited a piece of land in Canada that was zoned for commercial purposes. I did not know what to do with it until a real estate developer asked me if I would like to sell it. I could have taken the easy way and just sold it for a nice profit. However, I inquired about the plans for the property, and it was going to be developed into a retail space. An anchor store already wanted to do a long-term lease. I looked into construction financing in Toronto to find out if I could swing having the property developed.

All it really took was a lot of phone calls, a couple of trips to Canada, filling out a lot of forms and making sure every one did their part. The anchor store had specific needs for its retail space. The rest of the development would be a mix of small, medium and larger retail spaces. The commitment for a little over 70 percent occupancy after construction was enough to get started on the project. We reached 100 percent retail space leasing commitment before we broke ground. The architectural firm made some adjustments to accommodate another non-competing anchor store. Two anchoring retail outlets committing to leasing space meant I could get pretty much all the construction financing in Toronto that I needed. To make a comparison, it would be like a home center store and a major department store saying they will lease space if you build. Lenders do not have a problem providing financing for a sure thing.

The profit structure for the long term is going to net my wife and I a whole lot more than if we would have just sold the property. It is weird owning a property like this and it being so far away from where we live, but it is a learning experience that is paying off. I could never have done anything like this with my own resources. It was the land and the commitment to lease retail space that got the project going. It was gong to happen no matter who actually owned it. I am happy we held onto it.

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