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Updated about 10 years ago on . Most recent reply

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49
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Kyle D.
  • Palm Harbor, FL
3
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49
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TripleNNN lease (church) possible redevelopment

Kyle D.
  • Palm Harbor, FL
Posted

Hey all,

I know a re-development/purpose of a building is a little out of my league right now but I was thinking about the overall deal and it seems like I am still net+ cashflow even at closing, until I get some more experience under my belt and maybe can partner with someone.

Details:

$220K 10,000sqft building currently rented tripleNNN for $26K/yr.

Here is the pitch: " At $21.45 PSF, this property represents a potential re-development opportunity. The underlying land is zoned RM-16 and the property is located in an area that would support low cost housing, affordable, independent living, assisted living, and/or daycare. It is believed that the site could be approved for up to 25 beds as an ALF."

My thought is I can get a loan on $180k 30yr for around $940/month ($11k/yr) and put the money aside to then eventually fund a down payment on development of an ALF building.   Of course this is pending inspection to determine when things such as a new roof, hvac, anything else that would cause a spike in expenses.  

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Bill Gulley#3 Guru, Book, & Course Reviews Contributor
  • Investor, Entrepreneur, Educator
  • Springfield, MO
12,877
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21,918
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Bill Gulley#3 Guru, Book, & Course Reviews Contributor
  • Investor, Entrepreneur, Educator
  • Springfield, MO
Replied

If you change zoning or in some cases use, you may be required to bring the building up to code for that new use, first, I'd see what that would take for your ALF operation and you might look to the economic development office as to feasibility. Check with your local PHA to confirm your thoughts as to need, often they will be asked before such a project is approved. You'll probably find that it will take twice as much as you think initially.

Usually, the highest and best use of a church is a church. Another angle is to approach churches that may be interested in providing senior housing or other housing needs in the community. They may keep the building as a church property and obtain a variance which is much easier to allow residents in part of the building and keeping common areas as well as the chapel area. These are along the non-profit housing lines and they may be able to obtain economic development funds and/or Section 42 Tax credit funding, again, based on need.

While it may be an educational experience for you, my first reaction is that you're spinning your wheels, yes, probably over your head and a tough road for most investors to hoe. Those that are in that arena are probably already aware of the building and its potential. If you need to make money in the next 9 months or year, start looking for something else.

Best of luck :)

User Stats

49
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3
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Kyle D.
  • Palm Harbor, FL
3
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49
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Kyle D.
  • Palm Harbor, FL
Replied

Thanks @Bill G for the straight talk :)

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