Humboldt, IA · Member since 2013 · 58 posts · 5 votes
ok so here is the dilemma. In my town there is a property up for sale. It's located right on the main street in our small town where there are other similar buildings. The downstairs is a business front and the second floor is a super upgraded two bed one bath 1200 daft loft with no current renter. I've been interested in buying it and leasing the business area and renting the loft. The problem is they want 119900 for the building but the business currently there is closing and there is no one renting the loft. I need advice on where to go with it. In my head I feel I could easily get a renter to pay $600/month for the loft but finding a business to lease the bottom is a little more difficult. With a conventional loan I'm looking at a $800 mortgage. Depending on zoning I've also thought about just rehabbing the bottom to be another apartment but of course that would cost a substantial amount of money. Any thoughts?
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
Smallish town, main street store fronts can stay vacant for a very long time! Probably why the owner is selling.
Why not see if you can find a tenant that can't or won't buy, then you buy it.
Conversions around here, store to residence don't really do well as it still looks like someone lives in a store. Takes a special tenant to enjoy that.
No idea of what it's worth but the price will probably come down when it's empty. :)
Mount Vernon, WA · Member since 2012 · 52 posts · 22 votes
12y
What are the spec's on the property? What is the current use of the building?
I have had good success buying, rehabbing then renting this type of building arrangement for small owner/operator restaurants, especially in outlier communities.
I would look to get a 25% discount when it goes vacant.
Humboldt, IA · Member since 2013 · 58 posts · 5 votes
12y
This is the property listing.
http://commercial.century21.com/listing/617-sumner-ave-humboldt-ia-50548-REN008974124
As you can see the current business is a computer repair shop. my initial thoughts where to convert the area into a small cafe. I'm not sure what the costs would be to buy equipment and bring the place up to code. The loft is gorgeous so I'm not sure what else i would need to do to improve it. I plan to take a closer look at it this week and do a walk through. If I could find a tenant that would rent the loft and run a business in the bottom that would be even better.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
A café with an upstairs living unit can be a good combination, many small operators will live upstairs.
Having the idea is one thing, but food service is a highly regulated use, about the only thing worse would be medical.
Not all, especially older buildings will have sufficient plumbing or electrical to meet the requirements. Check with your building regs, they will probably know the building and can tell you would need to be done before make an offer. :)
Humboldt, IA · Member since 2013 · 58 posts · 5 votes
12y
Thanks I'll do more research on the property. Depending on repair costs and what I could get from rent will be a big factor of course. Most of the commercial buildings for sale nearby are averaging 80k-140k most have apartments but none that I've seen have such a nice apartment as this one. If I could get the building for under 100k and find tenants really quickly it just might be possible to get a decent return. I would be applying for VA loans and I know how strict they are with standards. It will probably take a lot of investment before I could even get the VA to agree