Purchased my first apartment building. What to do with basement?

[Jake Grabber]

Hi guys!

I’m 23 years old and new here but have been reading and studying BP for years😄

What would you do with the basement of this apartment building?

I bought my first sfh ($1500/month) at 21 in 2016  and another ($750/month) at 22 in 2017 and I finally took the leap in December of 2019 for a multi family. 

It’s scary and exciting but so far, so good. 

Found it off market $485k with owner financing. 10k down, 5.5% for 30 years.  

It’s a very solid 23 unit building capable of bringing in 10-11k a month in its current condition. But bringing in closer to 5.5k/month currently because it’s less than half full due to a fire next door several months ago that forced them to evacuate the whole building until engineering reports/inspections were done, and with the owner being from out of town and a very weak management system in place they’ve been very slow to fill it back up. (I know and own in the area, very strong and stable rental market)

I know 485k is way high considering that it’s only making a few hundred dollars a month after Payment, utilities, taxes and insurance and current PM. but planning to start by getting 2nd and 3rd floors full to help with the cash flow then update/renovate the entire first floor (7 units) to raise the rents significantly, fill it then repeat with the 2nd floor a unit at a time. 

Shooting for $12-14k rent roll a month after renovations and 90% occuapancy.  

While keeping my operating expenses under $7k a month including good property management. 

Anyway, all details aside! This building has a full basement with no windows but is nice, solid and dry under it, 125’ by 40’ with 9’ ceilings that is just sitting empty and a waste of space that I think I need to make use of. I’m considering sectioning it off for storage units for the tenants or possibly even for the general public if there’s not enough tenents wanting storage. 

There’s 1 large 8’ wide stairway on each end of the building making for easy access down there. 

Thoughts on that or any other ideas on how to make that basement profitable!?😄