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Art of the Deal

New investment firm
negotiating to buy Elks building

Former Elks building could
become apartment complex

By Jenny Eggenspiller
Contributing Writer

(July 2012) – Archie Searp, a partner in Titan Investment Group, had never been to Madison, Ind. prior to November 2011. His partner, Jodi Funke, had grown up in neighboring Switzerland County, but had not been to Madison in some time. Their company, Titan Investments, which focuses on property management, is located in Florence, Ky. When the two learned of an apartment complex for sale in Madison in late fall of last year, neither of them could have imagined that less than 10 months later they would not only own and have renovated much of that complex but also be on the cusp of buying a second property in the city and tackling a project the community has been struggling with for the past five years.

Elks Building

Photo by Don Ward

Under the proposed Titan
Investment plan, the former
Elks Building will maintain its
front facade for historic
preservation purposes.

Searp and Funke heard through friends that the Hereford Apartment Complex was for sale. In February, they closed on the property.
Since that time they have completed renovation of eight units in the property and are continuing the renovation of the entire complex, which has been renamed The Greens of Madison.
“We are changing the climate of The Greens, the physical property as well as the management of it,” said Searp.
Titan Investment Group currently manages more than 200 apartment units in Indiana and Kentucky, as well as a number of single family dwellings. Because of their knowledge of multi-family property rentals, they began looking for additional locations in Madison to purchase quickly.
“In order to have full-time staffing, you really need to be at around 125 units. The purchase of The Greens put us at 79, so we immediately began looking around for another property to get us closer to that number,” Searp said.
The partners found another location they were interested in quickly, but negotiations did not produce a sale.
It was while applying for building permits at Madison City Hall for the renovation project happening at The Greens that the pair first learned of the Elks building on West Street.
“We told them who we were and what we do, and they probably gave us a handful of other opportunities in town to check out,” Funke said.
They followed up on the leads they were given but, Searp said, “It was easy to see early on that the Elks building was a hot button issue for the community. We saw this as an opportunity to show the community what we can do, and that we can be good landlords and property owners.”
Searp said he thinks the motives behind their interest in the property have been somewhat misunderstood. “Will this project be an income generator for our company? Sure, but typically we do not take on projects with this few units. Since we have the property on the hill with staff, logistically, it created a synergy for our company that we could make work.”

Jodi Funke and Archie Searp

Photo by Jenny Eggenspiller

Titan Investment partners Jodi
Funke and Archie Searp have
invested in renovation projects
in Madison and hope to make the
Elks building a multi-family dwelling.

Ultimately, Titan Investments hopes this project will open the door to other opportunities in Madison. “We thought this was a small enough project at $500,000 or $600,000 that we use this to start a relationship with the city. If this goes well, we hope to pursue other development projects here that we are already investigating.”
According to Searp, Titan Investments will use the Elks project to “evaluate how well parties can work together in Madison.
“There are really four parties in this case,” Searp continued. “The historical group, the city, the seller and, of course, ourselves.”
Searp and Funke have developed plans for the Elks that will include a minimum of eight units, four on the first floor and four on the second. “If it’s possible, we would like to do four in the basement as well,” Funke said.
The units will all have two bedrooms and one bath, along with a washer and dryer hookup. At this point, the partners are unsure of whether the units will be rentals or if they will pursue selling them as condominiums. They do, however, have basic estimates for cost. Rental units will be in the range of $650 per month and should the units be sold as condominiums, they are planning to ask around $79,000 to $80,000 for them.
“People keep questioning how we are planning to take this project on for such minimal cost, but what they don’t understand is that this is basically all new construction,” said Funke. The pair has committed to maintaining the front facade of the building for historic preservation purposes but is already sure that they will be replacing the roof ReBarr Construction recently installed. Titan Investments is basing its construction estimates on primarily new construction for the amount of square footage for the building.
“I would much rather have a building like this one than one where I am guessing at what’s happening behind walls I can’t see behind until after I’ve closed on the deal”, said Searp. “Although I’m sure some things will change once we get in there, this is pretty straightforward”, Searp said.
Although they are moving forward with as much planning as possible for the Elks building, according to Funke their access to the property thus far has been “very limited by the current owner.” Although they are still pursuing the purchase actively right now, the deal is far from complete.
According to Searp, approximately a month ago was the last time he or Funke had any communication with Carolyn Barr, who owns the building. At that time, Searp and Funke met with Barr, her attorney, and an attorney representing Cornerstone Society to review the contract of sale for the property.
“We all were together in the same room that day, and we left saying that we all agreed on the meat and potatoes of the contract,” Searp said.
According to Searp, the attorneys agreed to “red line” the contract to make minor changes to it, and have it ready to sign within “two to three days.” Since that time, Searp has been calling the attorneys “every day” to check on the status. He has been discouraged with no response from Barr thus far.
“There is a walk away point for us and, unfortunately, I think it may be very close,” Searp said.
Titan Investment was planning to start construction on the Elks building by June 5 and, according to Searp, that was made clear to Barr and her attorney in their meeting to review the contract of sale. “I would say we are at the point that the failure to respond to our efforts (by Barr) has become unprofessional and disrespectful,” Searp said. “Time is money for us. too.”

Back to July 2012 Articles.

 

 

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