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This gym owner made $2M & hasn’t paid rent in 3 years
Here’s how you can do it too:
John Franklin
October 06, 2023
What’s up Gym World?
Jared Byczko, the CEO of Myriad Health & Fitness has one of the craziest real estate success stories we’ve seen on Gym World.
In 2021, Jared sold his building for 10x what he paid and got the buyer to build him a new gym where he’ll operate rent-free until October 2026.
Jared's journey wasn’t part of a calculated plan, proving that you can make mistakes in business and still win big if you do a few key things right.
Here’s his story:
Being at the right place at the right time
In 2011, Jared and his business partner Peter opened the first CrossFit affiliate in downtown Indianapolis.
This was a great time to start a CrossFit gym because:
The 2008 financial crisis DESTROYED rent prices for industrial space. They paid $500/mo to rent 5,000 sq ft.
They started with $10k in equipment. People weren’t used to fancy CrossFit gyms.
There was little to no competition.
CrossFit skyrocketed in popularity over the next 5 years.
The gym wasn’t a runaway success, but it grew steadily month over month. Jared and Peter kept their business and personal expenses low, and over time built up a small cash reserve.
At the time, downtown Indianapolis had tons of inventory, and you could buy buildings for a few hundred grand.
They didn’t know it then, but a few years later some deep-pocketed developers would be bidding millions for the same buildings.
But we’ll get to that in a sec.
Buying the first location
Three years after opening, Jared and Peter found an 11,000 sq. ft. space for $385k.
They used an SBA 7(a) loan to buy their building, so they only needed a 10% down payment of $38.5k.
Remember that the amount of money a bank will lend you directly depends on the cash flow your business generates. This article will teach you the formulas banks use to lend.
Their small cash reserve covered the down payment, and their gym had enough cash flow to cover the building loan plus an additional $100k in buildout costs.
Expanding to 3 locations
After moving into their new space the business grew, and Indianapolis property prices increased.
Two years after buying the building, Jared and Peter refinanced and used the money to build a yoga studio and buy a competing gym.
By 2019 they were running 7 different programs, and the business was doing over $100k/mo.
Many gym owners believe more programs and locations means more money. That’s rarely true. That said, more locations almost always come with more headaches. Take it from someone who owned 5 gyms.
Shit hits the fan
Running 3 locations with 3 different concepts seemed like a great idea until COVID happened. It forced Jared and Peter to simplify their operation.
Revenue dropped about 20% in 2020 and another 20% the following year.
They sold the competing gym and refocused their attention on the “downtown compound,” which consisted of the building they owned and the yoga studio they leased.
That turned out to be a smart move…
Buying on the path of progress
Smart gym owners position themselves in geographical areas that are growing and improving. We call this setting up shop on the path of progress.
Jared and Peter accidentally did this when they bought their building in 2014.
At the end of 2020, a NY investment firm started buying real estate around them to build “The Stutz”—a massive community complex filled with retail stores, coffee shops, and condos.
They approached Jared and Peter with a shit deal.
They said no…
The investment firm then threatened to open an Orangetheory across the street.
Unfazed, Jared and Peter continued their business until the New Yorkers returned with a better deal.
They said no…
Then the New Yorkers came back with an even better deal.
They said no…
Finally, the New Yorkers went full Don Corleone and made them an offer they couldn’t refuse.
Here it is:
$2.25M in cash,
a space to run their gym and yoga studio in The Stutz with 3 years of free rent,
a $400k tenant improvement allowance, &
$25k for architectural plans.
BUT GET THIS: Because Jared and Peter had a right of first refusal on the building they leased, they also negotiated a $86k brokerage commission for selling that right to the New Yorkers.
And thanks to delays during the development process, they got an extra two years of free rent.
Not bad for a building that cost them $38,500 to buy just seven years earlier.
Advice for gym owners
Owning the real estate your gym operates out of doesn’t guarantee success, but it improves your chances.
If you want to “get lucky” like Jared, I recommend:
Getting profitable
Keeping your personal expenses low
Buying on the path of progress
Being patient
If you get that right, you can make many expensive mistakes and still do well for yourself.
These days, Jared is functionally retired and focused on being a good Dad.
Until next week,
j