Mixed-Use Commercial Opinions

[Nicholas Smith]

Newbie here.. I am interested in a property that is in a great location.  Commercial first floor with 3- one bedroom apartments on the second floor.  The building is on main street within a growing community and faces the town courthouse and a park where concerts and festivals are periodically held.  The gross monthly income is $2250 with room to increase.  I am thinking I can get the building for $140-160k.  The plan here is to hold the building and, down the road, if/when the main tenant leaves, convert the first floor into a small bar w grill to be owner/occupy.

Issue: over the past three years, the current owner has spent $28k on upgrades, improvements, repairs (bringing building up to code, ADA compliance, sprinkler work, window installs). Am I correct to assume that the bank will take this into account when figuring NOI vs loan amount? If so, there is no way that this building's NOI history supports the commercial loan. Any thoughts on how this works, and advice/suggestions are appreciated. Thank you!