Art of the Deal
negotiating to buy Elks building
Elks building could
become apartment complex
(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.
by Don Ward
the proposed Titan
Investment plan, the former
Elks Building will maintain its
front facade for historic
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,
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
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
by Jenny Eggenspiller
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 its 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 dont 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 whats happening behind walls I cant see
behind until after Ive closed on the deal, said Searp. Although
Im 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
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
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.
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