The former Salvation Army building at Davenport's 6th and Harrison streets has been purchased for $1.3 million by Arsenal Properties, a Chicago-based real estate investment firm owned by Chris Salazar, a 2016 accounting/finance graduate of Augustana College.
Salazar, whose company owns more than 100 units in the Quad-Cities, said he plans to put a "solid amount of money" into the building, brand it as The Foundry, and rent its 32 apartments as market-rate units.
"We're going to make it pretty nice," he said. The opening should be in about six months, and he is targeting millennials with "affordable luxury."
The five-story brick building at 307 W. 6th St. was constructed in 1895 as an apartment house, according to online records of the Scott County Assessor's office. The Salvation Army used it to house homeless families from about 1990 until this past summer, closing the building because it changed the way it helps people, instead placing them in scattered sites such as motels or apartments.
A meal site and health clinic also were located in the building.
In addition to "the Sally," a nickname for the Salvation Army building, Salazar also acquired five vacant parcels south to 5th Street that he will use to provide 60 parking spots, he said.
"The first time I walked through, I saw the value," Salazar said of the building. "It's well-located, and I hadn't bought anything in the downtown before."
Salazar, who grew up in the southwest Chicago suburb of Plainfield, has been active in the Quad-Cities for several years, putting his first duplex under contract when he was a junior in college, where he also was quarterback of the football team.
With silent partner Kevin Runsky, he founded Arsenal Properties in October of 2016. Prunsky is an entrepreneur who founded a waste management firm that he sold for a healthy profit, then reinvested in American manufacturing companies in need of capital, according to the website arsenalcp.com.
Arsenal Properties owns 13 single-family rental homes in Davenport, according to online records, and numerous properties in the Illinois Quad-Cities, including Rock Island, Moline, East Moline, Silvis and Milan, for a total of 110 units, Salazar said.
And he's now pursuing his largest deal yet, a 120-unit apartment complex in Davenport, he said.
This is a lot of activity in a short period of time, but that doesn't surprise people who know him.
John Delaney, chairman of the accounting department at Augustana, had Salazar as a student in several classes and "it was pretty apparent he was a go-getter from the start," he said.
"He's very industrious, and he was pretty determined he was going to make real estate his thing," Delaney said.
"He's very analytical; he knows his numbers. But he also has the soft skills, being able to talk to people and to network. And he's not afraid to stand up in front of people and make a presentation."
While it's not unusual for Augustana graduates to start their own business, "Chris sort of short-circuited that whole process by starting it while he was still in college," Delaney said. "He's going to do big things."
That certainly is Salazar's goal.
"Using aggressive growth strategies ... Arsenal focuses on acquiring distressed real estate, adding value, and repositioning the properties to generate high returns," according to the website arsenalpropertiesllc.com.
As an example, the company bought five four-plexes on Davenport's Schuetzen Lane in November of 2017 and, after rehabbing, sold them.
"This was another successful value-add project," according to arsenalcp.com. "Arsenal executed its value-add business plan, raising rents $208 per door on average and realizing a 4X return on equity after the sale.
"This deal is a prime example of Arsenal capitalizing on opportunities where others do not see how to add value. Not only was Arsenal able to push rents through cosmetic updates, they succeeded in decreasing operating expenses through more active management," the site states.
Although the property was sold to investors in California and Connecticut, an Arsenal company continues to manage it.
Another property Salazar is renovating for sale are The Ritz apartments, a vacant, 20-unit complex near 14th Street and 38th Avenue in Rock Island that he purchased in May.
He intends to turn the "pretty distressed" units into "nice apartments" by April, he said.
A 'mind shifting' book
Where did this drive come from?
Salazar refers to the book "Rich Dad, Poor Dad," as "mind-shifting."
Written in 1997 by Robert Kiyosaki and Sharon Lechter, it advocates the importance of financial literacy, financial independence and the building wealth through investing in assets, real estate and starting and owning businesses. It was a New York Times bestseller that was both praised and criticized.
Salazar found it on the shelf of an area bookstore during spring break when he couldn't afford to go on a trip, as many of his classmates did.
One of its takeaways for Salazar was "how to do real estate deals without any money."
Salazar said he probably would have gotten to where he is today without the book, but "it would have taken me quite a bit longer."
Kate Howard, a Quad-City Realtor has worked with Salazar said he is "leaps and bounds ahead of me and his peers when we were his age."
When she first met him, she thought he "was awfully young to be buying these properties."
"But then I realized that he had a massive plan, and I quickly learned I wanted to help support him," said Howard, who works for EXP Realty, a cloud-based real estate brokerage that started in California.
"He has a lot of contacts and that's not easy because first, you have to establish credibility. He has done that very quickly. He's a self-starter with determination. With his nationwide networking, he's bringing money into the Quad-Cities."
Salazar said his plan is to "accumulate hundreds of more units in the Q-C before expanding to another market."