Close my business and make it into rentals

[Michael Gray]

I run an artistic business and after this epidemic and the hit to the economy I really dont think its possible to keep it going. At the best of times it was an incredible amount of work with moderate pay and at the worst of times, it was an unbelievably hard business to keep afloat.

So I have a chance right now to change my life and I am hoping the amazing people of r/realestateinvesting can help me.

My incorporation owns the large building, it has multiple zones, they are:

Residential for the apartment upstairs, which gets me 1100$ a month.

Commercial for the gallery/ shop down stairs.

Industrial for the factory area in the back.

Its a big building!

The idea is to change the gallery into a residential rental apartment, which can probably be a 2 bedroom and cost about 15k$ to reno to be rented. After thats done I can probably get 1500-1750$ a month depending on how the economy bounces back.

The basement which is currently a shipping area could be changed into a bachelor rental at a cost of probably 12k$ and be rented for 850-1000$ depending.

Then there is the factory area, I have thought about making it into a large open space apartment type thing, or just renting it as storage or a factory space for someone else. Either that or find someone who wants to rent the factory and also the shipping area. This would be preferred as to reno the factory into livable space it would cost $$$$$$ and also it would need to be re zoned.

So upstairs apartment 1100$ a month

Gallery space lets say 1600$ a month

Basement lets say 900$ a month

Factory space just for ease maybe 1000$ a month

Thats 4600$ a month and around 55,200$ a year.

I have around 120,000$ on the mortgage and after this whole shitaroo of an epidemic probably -50,000$ on a credit line with a limit of 100,000$ limit. I would sell off all our equipment and stock and probably be left with very little owing on the credit line. The building is worth about 450,000$ so I could re mortgage to 360,000$ and get 240,000$ cash to do the renos and then use the rest to buy another property to BRRR.

Property taxes are 6000$ a year

Upkeep around 3-5000$ a year

Mortgage around 15,000$ a year

What do you think? Do you think this will work? Am I missing something?

It has been my dream for a while to own more properties, we are currently house hacking a duplex and so I also get 12,000$ a year from that so that helps. Long term goal is to move out of here and then rent out our side for 19,200$ a year putting my grand total at 87,600$ income a year in rent.

Thanks so much for taking the time to read this, this is a big step for me so I really appreciate all the help! I am currently on lock down so Ill be answering all day! :)

THanks!