For one Florida couple, a tough economy opened up the opportunity to purchase their own commercial property.
Although times are tough, there can be a silver lining. This may be the
perfect time to buy your own building, says Mike Van den Abbeel, who
recently purchased the building that houses his Mosaic Hair Studio in
Orlando, Florida. Property prices are down, sellers are motivated and,
with proper due diligence and/or creative financing, it can happen.
den Abbeel and his wife Kiri Wollheim were both stylists with more than
10 years of experience. Before they bought their building, Van den
Abbeel had been booth-renting and Wollheim was at a commission salon.
âWe had been looking to start our own salon but finding a unique retail
site was difficultâwe didnât want a strip-mall location,â Van den
Abbeel says. The building they bought wasnât for sale at the time, but
he approached the owner anyway and started a conversation conveying
their interest. âThat conversation lasted almost two years,â Van den
Abbeel says. âIn the end, we agreed to owner financing with the old
owner still being allowed to work until he retires.â
price for the space was $215,000, the couple put down $25,000 and
renovations cost another $40,000. They are members of a barter company,
so they were able to buy renovation materials on trade.
can be stressfulâVan den Abbeel recommends future owners to remember
the âfive Psâ: Prior Planning Prevents Poor Performance. âWe lined up a
great contractor, friends and family to get the job done,â he says.
âRemember, it will always cost more and take more time than you think.â
Mosaic Hair Studio
Owners: Mike Van den Abbeel and Kiri Wollheim
everything has been easy, though, he says. Monthly maintenance and
repairs can take up time and be costly. âYou need more and better
insurance than if you just rented,â he says, âespecially liability and
building insurance.â And, he says, dealing with local government can be
a hassle, especially if it involves a renovation.
Abbeel and Wollheim donât regret it for a second, though. The mortgage
on the salon is cheaper than what rent would be for a similar building.
Also, the mortgage does not go up incrementally year after year; itâs a
fixed cost. âThere are no building maintenance fees that landlords add
on in addition to monthly rent,â he says, âwhich can sometimes be
almost as much as half the rent.â
And the investment puts the
couple on a solid course for their future. âWe are trying to purchase
the property next door, giving us the ability to build a larger salon
with ample parking and more stations,â he says. âFinancing will be made
easier because we now have equity in our building. Also, small local
banks like to work with owners/occupiers of commercial property.â
Share one of your best salon practices by contacting Alison Shipley at email@example.com.