Development opportunity questions

[Damian Baynes]

Hi Everyone,

So in thinking about it over the last few months and researching, I would definitely like to invest in an apt building as my next real estate investment. The plan I have is buy an existing building that needs some TLC so I can add value to it. Recently I came across a large, vacant building that was previously a branch of a utility company and now it's for sale. The bldg is huge and zoned for mixed use. 15,000+ sq feet. Up to 75% of that can be used for residential from what i understand but I would research more if I can get a zoning variance. My question is would you advise someone like me to pursue a deal/project like this, considering I have zero background in development? Especially one like this where it is a conversion? What steps would i need to take as far as due diligence to figure out if the deal is eve worth it? Thanks in advance for the feedback.

Damian

[Dylan W.]

Damian

I would not recommend something like this for your first deal. The building code and zoning issues could eat a new investor alive, and may not be readily apparent in the due diligence process. I would recommend a value add play on an existing poorly managed or maintained apartment complex. That will give you a similar upside with risks that are easier for a new investor to manage. Best of luck in your investing.