Converting a Mechanic Shop/Garage to Restaurant/Retail Space

[Gary Kumar]

Hello,

I've been looking at real estate in Milwaukee and Madison. Im interested in knowing the process on possibly converting existing garage/mechanic shop space into restaurant space. I've seen some businesses that have done this in the past where it was an oil change business and it was converted into a coffee shop or restaurant. Most Likely we would have to buy the property with a loan and get a construction loan for the upgrades to convert. What would something like this possibly cost? Any information helps. 

Thanks 

[Chris Mason]

This will cost more than you think. Environmental reports...

[Marcus Auerbach]

That is one of the most expensive and difficult conversions you can attempt. 

Step on is decontaminating the site, probably busting out the concrete floors and if necessary the soil under it. You won't get financing until you pass an environmental phase II.

Then on to part two. Building a restaurant is shockingly expensive, especially the kitchen, ventilation and fire suppression. And you also have to jump through a lot of permitting hoops and redtape, depending of what you want to serve: take out, dine-in, beer&wine, liquor - all different licenses. Even in brew-city Milwaukee. 

You will have to get the alderman on board (politics..) and then the neighbors about hours and parking..

It's a cool project, it feels like you make an impact on the community, but I would only do that if I had too much money, nothing to do with my time and looking for a proper challenge.

[Chris Mason]

Quote from @Marcus Auerbach:

Building a restaurant is shockingly expensive, especially the kitchen, ventilation and fire suppression. And you also have to jump through a lot of permitting hoops and redtape, depending of what you want to serve: take out, dine-in, beer&wine, liquor - all different licenses. Even in brew-city Milwaukee. .

 This actually got me thinking of the best restaurant deals I've seen. They aren't toxic wasteland to eating establishment conversions. 

Rather, it's the restaurant that just went broke. One recent example, the seller purchased the building and dumped $500k into making it their dream vegan organic non-GMO ethical [bla bla bla, and so on, and so on] eating establishment. Only problem, they didn't do their homework, this wasn't an area where that sort of thing is actually sufficiently in demand to support that restaurant, at the prices they needed to turn a profit. Reading between the lines, if they were open to a concept shift, they weren't open to it soon enough to make the pivot before running out of money.

So my buyer picks it up for a tad under what the seller paid for it, a few years ago, before the $500k in upgrades. And is walking into a turnkey ready to rock building, the seller (whom I am presuming is now broke, but that may not be the case) even left the tables and chairs behind, all ready to have plates full of unethical inorganic genetically modified red meat dipped in butter placed on them. 

@Gary Kumar as you drive around this area, are there not shuttered/abandoned restaurants or bars? I think that might be the more plausible value play.

[Ronald Rohde]

Budget $300/ft for conversion, plus land acquisition. How much will that rent for on exit?