Building Shell Development Mixed Use

[John Fortes]

How have you guys underwritten a mixed use... I just came across a great opportunity in my hometown and it's really priced accordingly well.

• Building price $350k
• assessed value $225k
• 8 total units
• 6 residential (two 2's, two 1's, 1 studio, 1 ADA studio) 5 units upstairs, 1 ADA studio main floor
• 2 commercial retail
• Residential units 6950 sq ft
• retail 2700 sq ft
• Cost per sq ft around me is $125-$140 (gathered from a builder friend)

Already zoned (C2) and approved by the city. Met with the seller and he's already come across buyers that want to buy it for the fast buck and change what the city already approved. He's balked on those offers. I plan to keep it as he has already planned for it because we share the same vision.

Deciding to do with the retail is what I'm tackling now. Mini mart? Co-offices (my favorite idea as the court house and revitalized down town is a skip away), ect. Any other ideas you guys may have due to experience will be very helpful.

I'm trying to underwrite this one as we would be going in with hard money and strategically refinancing out once stabilized. I have a great community bank relationship and already spoke to my contact there saying day one of full stabilized leased up on just residential units we would start the refinance process.

I appreciate any ideas on how to underwrite this one due to the commercial retail and units mix as well as retail component as well as total expense to develop this project. I just want to have an idea of the budget it would take to complete this from other resources that have tackled such a project. Thank you in advance!