Questions About This Industrial Property Purchase

[Diane Menke]

I am interested in learning the ins and outs of owning industrial property. 

I need help analyzing this deal. 

15,600 sf of space 

asking price $325K

needs $125K according to the agent (new roof, clean up, paint other) 

tax $8600

ideally the tenant will pay for % or all of build out, maintenance, taxes and insurance. 

looking around this area I do not see rents higher than $2-$3 per year for basic industrial. Also our clear span is only 10'-18' but we do have 1 loading doc and a few bays. 

When I run this through a property calculator, its not such a great deal (cash flow) until we get closer to $200K purchase price. Or am I missing something? 

Thanks!

[Henry Clark]

1.  Look at any EPA or hazmat issues first.  Know what/who has used the building.

2.  At 15,600 your in an "in between" size.  Need to go bigger (not an option) or smaller (2,000 Sqft) units.  Also look at Parking spots, and access to determine potential usage.  This would be a great 5 or 6 unit spot for Contractors (plumbers, electricians, car enthusiasts, etc.

3.  Your clear span is okay if you can take out any walls to make single pays larger.  

4. Door sizes?  14 foot tall and 12 or 14 wide.

5. Gentrification. If this is in Flourtown, looks like a great location to various areas. See what zoning allows for changes. Your back ground shows SFH/MFH. Change this to industrial condos MFH.

6.  This would be a great size for a Craft Beer operation.  Production and bar.

Make the offer at an industrial usage; although you might take to a higher value product.  Not giving you much help from an industrial standpoint, but I like higher value use conversion.  Make the offer "Subject to either rezoning or Special use permit".  Put a redeemable earnest money deposit down to hold the offering.

Love taking coal and making diamonds.  We mainly do Self storage, but are getting ready to do Contractor bays on 4 acres.

Great project.