Purchasing a building not for sale

[Jessica A.]

I've recently moved to a quaint and growing small suburban town. This town has great restaurants, shops, etc. However, it is missing a coffee shop where people can meet and gather, stop in for change of scenery for those who work from home, or grab iced coffee on a Saturday morning.

I've found this building that has been vacant for over 3 years now. One of the owners has passed, but his wife is still alive. I also recently found that they have not paid their taxes in almost 2 years.

This is one of the few small stand alone 1-story building in the downtown area (land is about 20 x 100). It also appears to have significant water damage (previously a laundromat of some sort). 

How can I go about making an offer to the widow that is fair? I've drafted a letter, but I'm unsure how to make sure I'm not overpaying for this building. Similar commercial building that is operational and leased is being sold for $375K.

Thanks in advance!

[Kathy Henley]

@Jessica A. You are ambitious! What is your intention with the property? Will you be the proprietor who brews coffee and wipes tables? Or own the property and attract the tenant? Well then, one must have a way for the property to pay for itself. Property owners must consider the commercial tenants' business income to judge if their tenancy pays the bills. If you are to be the coffee shop owner, write a business plan. If you are to be the Landlord, write a business plan of owning the property. What are the costs to put the building into service? Work backwards to determine the value you could offer the current owner.  Fair is defined as what you both agree on. She is an owner with a problem. You want to help her solve her problem AND not go in debt doing so.

Your first letter may not even mention a price. It might be a letter of intent, that you intend to buy the property after you find out some things and ask her help in doing so, like an property inspection. This might lead you to a conversation or three. After each session, write up a summary of what you think you heard. Ask for expense costs during their ownership and seek outside help in determining current market conditions of your area. Gather info and study the coffee business. Can your vision work with a coffee brewing tenant? This letter could eventually be the purchase and sale agreement, ironing out the price and terms.

Base your offer on facts. What is the cause and repair costs of the water intrusion?  Don't overlook the seller's help in financing the sale. Maybe she would like to be paid in installments, mailbox money. But I might be getting too fancy for your first buy.