Writing a proposal and timeline for purchase of building

[Javan Bowsher]

I am new to Commercial investing, but I had an idea recently to turn an older movie theater that had gone out of business into a rock climbing gym. I have approached the owner of the building and she would be interested in selling, but would like me to send a proposal over. Is that similar/the same as submitting an offer in residential real estate? And is the timeline for commercial sales different, as compared to residential?

I have hired a consultant to help with a market analysis on whether the market can support a climbing gym, and I am waiting for those results before I submit any offer to the seller. Should I also wait for that analysis before I approach investors about potentially investing with me on this deal?

Sorry for my ignorance, I’ve spent a fair amount of time educating myself on residential real estate, and not so much on commercial, but this idea really excites me, and I’d like to try and see if it could work!
Thanks!

[Russ Kitzberger]

A proposal could mean different things to different people.  It could mean anything from a letter of intent to a contract.  No commercial deals are not similar, unless you are taking the property as is. Commercial deals take alot longer, require different due diligence, and more frequently can stall or fail, particularly when novices are involved.

With commercial deals you usually have a period that you can do your due diligence, then a deposit that is non-refundable, then time for closing.  The type of adaptive reuse project you are describing might take months or years to plan depending on how busy your engineers, planners, zoning attorneys,  and general contractors are in your market. So, yes I would anticipate, under current circumstances, the owner might want some assurances before locking the property up in a contract.

"Should I also wait for that analysis before I approach investors about potentially investing with me on this deal?"

Many people, would want the investors in place before spending time on the project.  This seems like an owner-occupied project that would best be suited for SBA or similar financing.

I work with alot of small businesses and startups, this would be a big project for most startups without experience.  Not impossible, but you will have $10k-40k into soft costs before a hammer is swung.