3 Family With an Auto Body Shop

[Max Ozkural]

So this is an interesting property I came across and I am looking to see what people's thoughts are on it.  Its been on the market for 80+ days in a hot market, which is probably do to the fact that people see a red flag when they see auto body shop.

I am waiting to hear back from the agent on some things that are unknown at  this point, but this is what I do know:

-Residential 3 family recently renovated and fully rented. 

-unit 1 is 2 beds 1 bath rents for $1300/month

-unit 2 is 1 bed 1 bath rents for $750/month

-unit 3 is 1 bed 1 bath rents for $725/month

-Gross opp income is $59,700 per year

-taxes $11,840

-3,527 SF

-however there is also an autobody shop on the same tax deed that is currently rented 

-i dont know for how much or anything other than that, this is all the listing says, "Here is the 10% return you’ve been looking for!! Walden 3 Family plus Auto Body shop. All units fully rented with very positive cash flow. Home is recently renovated and in turn key condition. Body shop includes DeVilbiss spray booth/bake booth, paint mixing system, high end air compressor, frame machine, and more. POSSIBLE PRIVATE FINANCING!"

As I wait to hear back from agent on some key facts that are missing, anyone have any thoughts?  Or any questions I should ask the agent? Any help would be appreciated.

[Paul Choi]

I have a commercial property with tenants in the auto business - dealership, mechanics and auto body shop.  Not sure how things are in NY but here's my experience:

Residential is easy to get financing for acquisition. Auto related businesses, not so much. LTV's are in the 50-60% range. Make sure all permits and licenses are proper. All fire safety like fire extinguishers are current. Probably have to do a Phase 1 and possibly a Phase 2 Environmental reports. Can be costly. If first round of testing doesn't look good, they will bore into the ground to look for soil contamination. Make sure it's zoned for that business of course.

Is the auto body shop and residential on separate lots? probably not since it's on the same tax deed but can you do a lot split if they are separate buildings?  If so, you want to split them and sell off the residential and or commercial separately or keep and operate them...whatever works for you.  The body shop is a big pimple on the residential part of the deal.