Revitalized downtown, Liquor on the bottom, build lofts up top

[Brandon Singer]

I'm looking at a off market building in a suburb of Orlando. This is a thriving downtown area with many restaurants, bars and boutique shops. The building currently has a "hometown bar" and a liquor store. It has a second story that I'm interested in building loft apartments in. The building was originally built on 1920. How many loft do you think I can comfortably fit info 4050 sqft on the second floor? Any type of cost estimate for lofts? I'm just starting to explore this. I will soon find out how much the bar and liquor store are currently paying for rent and see if this is a worthwhile endeavor. I have commercial financing lined up for another deal I'm working on. I will hopefully take down one of them if the price is right but I would attempt to utilize owner financing on this as well. Comments and recommendations welcome.

[Joel Owens]

Make sure with your lofts that your cost estimate for rehab and what the city or county wants for compliance are in the same ballpark.

A building that old might have a ton of surprises such as illegal additions, grandfathered permitting but as soon as the use changes you have to bring up to code, knob and tube wiring, asbestos, galvanized pipes, lead based based, out dated electrical panel for today's demands, and on and on.

Check what type of leases are in place downstairs NNN,gross,etc. and if the tenant has to disclose monthly sales and how strong the guarantee is on the lease. Check for any annual increases in rent and early termination clauses. Make sure the rent on the leases is not above market so that you will have a trade down in income if the tenant leaves.

Lot's of other things but this should get you started.