Let’s Talk About a Roller Rink Project | Ep 13

James: Welcome to the Furlo Capital Real Estate Podcast, where we dive into the intricacies of real estate investing. And our mission is to equip people to invest wisely, not only in properties, but in people so that together we can build our wealth while improving communities. I'm James, and this is my wife, Jessi.

Jessi: Hi.

James: Hey, here we are. Here we are. Recording another show. So we are going to talk about properties which is super fun. Specifically, we're going to talk about a couple of deals that we're looking at. And yeah, well, we're just gonna talk about one. It's what we're going to do. Cool. And I think it should be, it'll be fun.

And, cause I love talking about it. You love talking about it. Yup. And so, well, it's my most

Jessi: favorite.

James: Let's talk about it. Not theoretical,

Jessi: actuals.

James: Yeah. Yeah. So I'm going to so this one that I want to talk about is kind of a fun one. It's a different one. And I am very much at the beginning stages of it.

And I'll describe some of my frustrations as well, but we'll get there. So drum roll, it is a roller rink.

Jessi: Okay. It's this, it's this one.

James: Yeah. So so.

Jessi: Okay. Let's clarify. It was a roller rink.

James: Okay. What would you say? It's currently

Jessi: not operating as a roller rink. It hasn't for years. It's an

James: abandoned building.

Jessi: It used to be used as a roller rink and now has, but, but it has a wealth of possibilities.

James: Yes. Yes. That's why you like it. So yes, I do. So it is a little bit North of town. That's about five minutes north. It is. It's a former roller rink is what it was. It's 6, 400 square feet on the first floor. And then there's 6, 400 square feet of an unfinished basement.

The outside looks worn and terrible. The roof used to look horrible, but now there's a brand new roof on it. And it is sitting on 1. 3 acres of land right on highway 99 and it's for sale. And so we have kids who go to school further down.

Jessi: And

James: so I drive that road. I drive by it

Jessi: at least once a day,

James: at least once.

Yeah. Twice, if you think about there and back again.

Jessi: Oh yeah, yeah, yeah.

James: Right. And recently there was a sign that was put up saying, for sale. I was like, oh, really? How much? And so I looked it up, it's for a reason, reasonable price. They're asking five 50 for it. And on the sign it said Seller financing. I have no idea what that means,

But anytime you hear that, it's very intriguing. Yeah. So I looked up the history of it. That means

Jessi: creative.

James: Yes. Something

Jessi: creative is willing to be done.

James: Yeah. So I looked up the history of it. Let's see if I can do this off the top of my head. There was an owner who then sold it for, it was like for like 37, 000 or something like that.

Not much. To How long ago? It was a while ago, but they sold it to a roller derby group. Oh, okay. All right. Yeah. I don't remember the dates on this cause I was just kind of, I was just quickly perusing it. And then and then they ultimately sold it to another individual. Okay. For, it's like 130, 000.

30, 137, 000, somewhere like that. And now it's on the market for 550, which is kind of,

Jessi: wow.

James: Tells you where the market's at for what is probably a worse property. Oh yeah. I would

Jessi: imagine it's in worse condition.

James: Oh, a hundred percent. I'll say the new roof piece, which was genuinely like, That was probably a 50, 000 roof job, just because it's big and it's hard and it's two store floors and it's on a, it's on a pitch and

Jessi: all

James: that stuff, which is probably how they're half justifying the cost.

And it's in Corvallis. I've

Jessi: seen a couple of pictures of the inside, but not the basement, I don't think.

James: Me neither. I've, yeah, I have no idea what the basement looks like. Who

Jessi: knows what that means.

James: Is that true? I don't think I looked it up online and they did have some pictures of the basement, but like there were bad pictures that weren't great and

Jessi: dark.

James: Yeah. So the top floor is like, it's a roller rink. And so that's the main part of it. And then there's the way I would describe it as

Jessi: like, it looks like a big gymnasium, but, but like you, like with beams. That are low down. Yeah. So not like a lifted correct ceiling, like a basketball court or something. But there's zero Yeah.

A big insulation.

James: Well, yes, but then there's like, there's that, that the half wall, I guess. There

Jessi: is, yeah. Kind of a kind buffer, like where you have like

James: your seating and you put on your Sure. Your not roller blades. I mean you can't, but your skate's on there may be a kitchen, there's probably bathrooms somewhere.

Jessi: Yeah.

James: I have no idea. Interesting. I haven't been inside, this is probably one of my points of frustration. So I actually reached out to the agent. Mm-Hmm. . And sent her a text message, nothing. And so then today I sent her an email, nothing. And I think I was able to find a potential office phone number.

And so I will probably try that one tomorrow and just be like, Hey, what's going on, is this person on vacation or what's the deal? She, this appears that this agent is based out of Portland.

Jessi: Oh,

James: and I think that might be playing into it. I don't know. I, cause I, Oh, here's the thing. So I actually called first.

And her voicemail box was full. Which I was just like,

Jessi: really?

James: But, you know, whatever. And then I, I wonder, I've actually been thinking about this. I wonder if, like, I'm pretty sure mine isn't full because I keep getting voicemails. But, like, does there come a point in time where it's full and you just don't even know?

You know what I mean? Like, is there a notification you get? Hey, your voicemail box full. You need to clear it out. Or is it just you just stop getting voicemails and you go, Oh, they just decided not to leave me one. You know what I mean? Like, yeah, that

Jessi: was that. Gosh. Now I'm kind of worried that I'm missing.

I mean, I keep getting voicemails. So I'm guessing it's not. Okay.

James: I don't know. I, I, but that's the thought I've had of like, is it possible that it's full and you don't even know? I'm

Jessi: pretty sure. We're going to

James: get this person to benefit. Our iPhones are

Jessi: like the, I'll just get rid of things or just store it.

Cause why not?

James: Yeah. I have no idea. It's one of those technology things that you just try not to think about because for the most part it always works. But anyways, try to get a hold of her. I haven't got a hold of her yet. And my step one will be like, well tell me more about the seller financing thing.

And then I want to get a tour.

Jessi: And I'm

James: like, the tour is the, even if it goes, even if she's like, even if she, I don't want to say it, hopefully she doesn't listen to this. Chances of that are pretty small. But yeah. Even if I like, I hear the terms like, Oh, this would never work for me. I'm like, what are we setting up that tour?

Cause I think it'd be fun to get inside. I think it's fun looking at weird, unique, interesting properties. So the question is, what do you do with this place?

Jessi: Well, we've brainstormed a bunch of different,

James: yeah. Give me your, give me some of your least favorite ideas.

Jessi: Okay. My least favorite ideas are probably like.

Keeping it as a roller rink. It's like well that didn't work. So which I mean, maybe there were other factors And so you're like, okay, we maybe we could revive it. There's some movie theaters

James: that are closed down Like regal just announced another round of bankruptcy. I know regal did back in 2001. There's another one, I think it's in California that just announced bankruptcy, but AMC is doing great.

Yeah. So like maybe do the AMC of roller rinks. I know you don't like that idea.

Jessi: I'm thinking maybe not. Oh,

James: I should also mention there's like zero installation in this place. It's essentially a fancy pole barn. So that's just another like thing to keep in mind here for some sort

Jessi: of sporting thing might be good because.

It's going to be cold in there. It's going to take a lot to heat. It's either

James: going to be cold or it's going to be hot. One of the two.

Jessi: Yeah.

James: Yeah.

Jessi: I'm not a super fan of like turning it into like a workout spot.

James: Okay. Like a gym.

Jessi: Yeah. Gym. I mean, it is just a big room. So I think you could do that, but I, I just don't know if there's like

James: my concern with that idea is that the roller rink is on the second floor and I just don't know how heavy something can get.

I mean, it's got to be fine because they've presumably had a bunch of people going around in circles on it. But like, I'm, I think like gym equipment's pretty expensive.

Jessi: Expensive and heavy. Ah,

James: sorry. That's what I was thinking. I was thinking both actually. But very heavy. And also it's like, just the startup cost I think.

You'd spend just as much on the gym equipment as you did on the property. Interesting. Yeah, yeah. Okay, so you don't like those ideas. Yeah,

Jessi: those are, those are, yeah, maybe.

James: One idea that was thrown out was like a maker space. I've had a couple people.

Jessi: Yeah, that was interesting to me. So a makerspace is like, you have all the tools there, like a bandsaw and a welder and like actual like workshop type of tools.

App printer and

James: a glow forge and yeah. And

Jessi: all the things you wouldn't necessarily want to buy.

James: Correct. And store at your house. That'd be nice to have.

Jessi: But you could like. And you could

James: use potentially the lower basement part or parts of it for storage, like keep your stuff there so you're not hauling it back and forth.

Oh, like

Jessi: a storage locker or whatever. Yeah, yeah, something like that. That could work, yeah. Or you could, like, there's enough land around it, you could put storage lockers around it as well.

James: Oh, I like the way you think.

Jessi: You know, cause I could see that if you're working on a boat or, you know, some sort of table or project that you're like, yeah, I'm not gonna carry this back and forth.

Like, you could just move it. Yeah.

James: And you could, you could host classes, teach people how to use all the different tools, especially some of the more technical ones could be kind of cool. Okay. I have

Jessi: two questions about this. So a how does like a pricing structure work for a space like that? Like, do you, do I pay like a monthly subscription?

I can use it whenever

James: you'd have a membership fee.

Jessi: Okay. So how do I know that like. It's not going to be packed when I want to go work on my stuff. Do I reserve a time slot? That's

James: a good question. I haven't really thought about that. Or do you

Jessi: have rotation of when things are available or something?

James: Because that would

Jessi: be, like, as a maker myself,

James: or

Jessi: artist, whatever, that would be super annoying if I wanted to show up to use, like, the saw or the glowforge. Which,

James: I don't know what

Jessi: that is.

James: That's where you can burn either metal or wood or, it's like what I do with my hats.

Jessi: Oh,

James: glow forge.

Jessi: Interesting.

Okay. So like, if I wanted to use that and I showed up, you can

James: have a CNC machine and it was like

Jessi: busy and someone was like, Oh, this project is going to take me like five hours. I'd be like, this is so annoying.

James: That's a good question. Yeah. Maybe they have some sort of reservation system for certain things.

And I think like if you had like 3d printers, you would want them to pay for the material machines are free. They're available, but like, there's some of the things where it's like, dude, this is like, Got to pay for them too. So it's somehow

Jessi: you'd have to manage and structure. Yeah. And I think

James: part of the trick is to not have a bazillion members, right?

If you only have, like, for example, if you only have 20 members, the chances of it ever being full are pretty low. If you have a thousand that could cause a problem,

Jessi: I guess it depends on how much people, and maybe,

James: and maybe part of the trick would be to create some sort of super, super simple, like membership app that allows you to reserve things.

Yeah. As well. And

Jessi: I could see that, like, like at the library, they have this, they have these rooms and it's like, you don't necessarily have to pay money, but you, it is kind of like available first come first serve, but you know, like the timeframe when it's going to become available again. Yeah.

James: Interesting. And so

Jessi: you can,

James: like

Jessi: something similar to that, or you could block out your time or whatever. Yeah. That's solvable. Yeah. Another idea that I

James: had that I love. Oh, are you still on the makerspace? Yeah.

Jessi: Yeah. The makers, the makerspace is super intriguing to me, but I'm also like, how do you deal with the liability of like people don't know how to use these machines?

Yeah.

James: That's just what an insurance is for. And you have to factor that into the business model.

Jessi: And probably you just post like, use at your own risk. Like,

James: yeah, exactly. Don't have trained

Jessi: professionals here. Some

James: waivers that would have to be signed. And you'd probably have cameras everywhere, just not only for theft purposes, but just for like, so we have, we can document how did he end up cutting off his finger?

You know, that kind of stuff.

Jessi: Okay. Anyways.

James: Yeah. Not

Jessi: typically things you have to think about when you're

James: buying

Jessi: a property.

James: My other option that I love is we sell this house and move in there. No, it becomes our house. No, dude, that'd be such a huge house. A 12, 000 square foot house. No, it would just be a big.

Well, you could like also no insulation, add rooms with insulation. It'd be so fun. We'd be the cool house. Would we? I agree. We're not gonna do it. I love this house and its location, but it sounds cool. So I, so here's here. Okay. All right. So here's what's intriguing. So this is I'm going to like, I'm going to head down a little bit of a rabbit hole.

There are great things about investing in real estate and there are also shortcomings with investing in real estate. And the, one of the issues with say residential real estate is that you're beholden to the market. You can buy, so you can buy a place, you can fix it up, make it better, bring it up to market rates.

Jessi: I do have another use idea.

James: Okay. You can bring it up to market rates. Okay. And then once you do that, now you're just, you're, you're playing along with the market. And in Oregon specifically, you can only increase rents once a year and it's capped by how much you can do. And so your potential income earning, sorry, potential, potential, whatever is kind of capped, right?

So like, let's say for whatever reason you and I were like, Hey, like it would be awesome to, you know, increase our income by like five grand a month or something like that. Some crazy number. There's no amount of hustling that I can do. for our current rentals to increase the revenue.

Jessi: It just can't happen.

You would have to get more rentals.

James: My only choice would be to sell a place, find another fixer upper, add the value that way, and then, and then I could have increased income. But

Jessi: then you have to keep doing

James: that. And then you have to keep going. And honestly, that's part of the, the That's part of the strategy behind a syndication.

That's why you only hold onto a property for three to five years. And the only reason why you're holding onto seven is for whatever reason, those numbers just didn't work and you got to hang on for the market to catch up. Like that's the, that's, that is a shortcoming of real estate. You can't just hustle and grow.

Like for example, if you had a pizza franchise and you're like, man, this is going great. I'm going to open up another franchise and I get it. There are other expenses. There are other complications with it. But in theory, there's like, if I wanted to increase our income, if I wanted to double it, there's a way to do that.

And I could just keep going easily by like doing more of the thing I'm already doing by hustling. Does that make sense?

Jessi: Yes, but isn't that the same as just buying another rental?

James: It's, it's different because, okay, I hear what you're saying. So like maybe within the pizza franchise world Let's say, okay, yeah, that's an interesting point, I see what you're saying.

There's things I can even do within the store to get more income. For example, I can raise the prices. Now, we can talk about supply and demand and whether or not that would work or not. I could change up the menu type. I could add, say, alcohol to what we're doing and get more that way. I can host events to bring in more people.

And you're

Jessi: saying those things are just more limited with real estate.

James: Yeah, yeah, exactly. You can't just add more units. You can't say we're going to do community events every week to get you to pay more rent, but not, yeah, it's just, it's a lot harder. Whereas if you have a business, there are all these revenue generating opportunities and you can, yes, you're limited, but like it's, there's a lot more things you can do.

Makes sense. That's what I'm trying to say.

Jessi: Yeah, that makes sense.

James: So what's intriguing about this one is it is a commercial piece of property. And so it leans more towards the pizza franchise style rather than the residential style, which just allows for some interesting possibilities.

Jessi: Honestly, like if, if I look at it and this, I think this is something we talked about where it's like, you would put this deal together as a real estate deal.

So you're buying the land, the building, and you're setting it up. So that you have a quote unquote resident or client who's

James: a tenant.

Jessi: Yeah. A tenant. So there's, so there's rent to use the space. There's that

James: option. I could buy it and rent it out to someone else who then runs their business out of it,

Jessi: which would be very similar to the real estate model that you're on.

James: That's what we're doing with warehouses. Right. I understand warehouses, but I don't do anything there. Right. I just have tenants and, and we're on leases and they rush up there once in a while and it's a thing. Yeah. So that is, that's totally something that we could do. Yeah. There's another intriguing option, which is saying, well, what if I start a business that utilizes this space?

And the idea that I like the most, and I think is intriguing is to port to become a wedding venue because that's something I've talked to enough people. There's a lot of demand and you can start to add a whole bunch of extras like the pizza franchise to say, Hey, what if we also. Like team up with a caterer or offer chairs and tables, offer a sound system.

What if we add a lawn out to the front so you can do it outside with an Arbor or something? I don't know.

Jessi: well, like the, the biggest thing that, that I feel like even when we were planning our wedding a ton of years ago, 15 years ago it was a thing then too, was like, you don't, if you choose a wedding venue, that's like this commercial spot.

And you, and they offer things for you. You often had to use the things they provided and it like totally limited your, your flexibility or your choice. And so that's, that is intriguing to me to create a spot that's like, you could use this for food, but you don't have to,

James: or. One of my dreams is when I'm old and like quote in real retirement

Jessi: is

James: to be a wedding DJ.

I think it'd be super fun. Like, yeah, people you're making them happy. And I would like to announce for the first time, like super fun doing music. And of course the irony of it is like, I have. Like struggle with hearing, I don't understand like pitch and stuff, but like, I'm just playing pretty like songs.

Like the mixing is easy. Anyways, I think it'd be super fun. Which again, which the problem is, see, what happened is I saw someone else do that and I was like, that is so sweet. And he's like, yeah, that's what I do on the weekends. I help out with weddings and he's able to charge a reasonable price. It was so awesome.

So I'm like, I want to do that. So like, yeah, you got, I gotta be your wedding DJ.

Jessi: No, no, you could be, I could

James: be for

Jessi: this particular price, which is Amazingly reasonable.

James: Or I make it unreasonable if I don't want to do it.

Jessi: True. Make

James: it worth my while. But yeah, those kind of options. So anyways, that would be the thing.

And then you could also hold other types of events there. There is so much space there, too, that one of my other ideas would be to also incorporate a vineyard type of thing into it. Oh yeah. Which I think would help with that wedding vibe, because it It exudes elegance, I think. Does it have to be

Jessi: a vineyard?

No, not necessarily. Like, we went to that one wedding

James: But I got friends who are

Jessi: Well, yes.

James: Veneesh? Vineeters? Viners? What's the term? Vignerones? Is that what it's called? Yeah. Yeah, that. I got friends who are that. I

Jessi: think it's French, maybe? It sounds right to me. Oh, Vignerones? Yeah,

James: that sounds right. Ha

Jessi: ha ha!

Ha! Anyways, does it have to be a vineyard? I know you have friends. Cause we went to that one wedding venue that had like a garden. Yeah. Which also is kind of, kind of nice. Yeah.

James: Yeah. The nice part about a vineyard is I could, I could rent out that part of the land to other people and they would pay for

Jessi: the space of it and they would

James: take care of all that.

That's not something I would have to do. Whereas like if you were doing flowers, like, okay, now we're hiring a company to manage all that or something, which I mean is an option, but. So yeah, that's anyways, so step one is somehow getting ahold of this agent to get a tour, talk about it, and I have another property that I would sell in order to do the down payment for it is kind of how I would afford it.

Jessi: Okay. Last comment. Okay. You don't even have to discuss this. Okay. I'm just, I'm curious. Okay. You should like throw these out and do like a, you know, vote for your favorite thing. Okay. What do you call that?

James: Take a poll?

Jessi: Yeah. Take a poll of like the general masses. Anyways.

James: The general masses. Go ahead.

Jessi: Another idea. A play space. Like, think McDonald's play space, but way better.

James: Okay.

Jessi: Like super cool trampoline slide play space thing. For kids, with a soundproof wall, and there's like people watching them, I mean, it's not just a free for all. And then a little, like, amazing cafe on the side, where parents could go and hang out and talk, and if they wanted to see their kids, they could, but they don't hear anything.

James: Alright, okay, that's an intriguing idea. That does

Jessi: not exist in Corvallis, because Wacky Bounce does not count.

James: No. Well, they don't, they don't offer drinks for starters, do they?

Jessi: No drinks.

James: Yeah.

Jessi: And you're not even allowed to have food except in the party room. There you

James: go. And you have to

Jessi: wash your hands before you go anywhere else, which, I get it.

I get it. Kids are gross. And it's not soundproof. At all.

James: No, it's not.

Jessi: Alright.

James: Intriguing idea. The nice part about the, the wedding venue is it's relatively cheap to get started to, which are like, Oh, and by the way, one of the other perks is if you are running a business like that yourself, when you do eventually refinance, you can do an SBA loan.

And so you get long low, long fixed interest rate,

Jessi: small business

James: association,

Jessi: association,

James: small business administration.

Jessi: Yeah.

James: SBA. Yeah. And so technically we could actually do that with our with our storage facility cause we wholly own it. And so that is an option for that in the future for everyone to refinance, which probably should honestly.

But. Yeah. Yeah. And so that would be what I would do in the future to lock in a longterm thing. And yeah, it would be really well. And so I'm intrigued by that idea, but we'll see. I don't know. I'm going to get a agent and go from there or it's just be a fun dream. All right. Well, if you enjoy this podcast and I really hope you did, cause it's super fun to talk about this kind of stuff.

We would appreciate it. If you would leave us a quick rating, wherever it is that you listen to podcasts. So thanks again for listening and have a great day.