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Updated over 8 years ago, 07/04/2016
Young and Ready
Hi Everyone,
I am a young professional from New York. I want to build an apartment building in a small town in Ohio mainly to learn the ropes of real estate development. What I am looking to build is a 4 story, multi-unit apartment building with commercial space on the first and second floor. The third and fourth floor will be residential housing for neighboring college students. I would like to lease the first floor to an entertainment company and lease the second floor to a healthy restaurant. I am just starting out, but that does not mean I cannot accomplish much. I want to learn as much as I can about the industry. I have talked to the head of economic development of the city and he talked to me about the zoning codes and limitations of constructing a new building. We are limited to a 4-story building. I know that I now need to talk to an architect and a contractor. I am looking for any advice on where to go from here.
@Zachary Ngai Congrats on the plan! Talking with the Economic Development director was a good preliminary step. I am assuming that you have the parcel of land under your control and that it is zoned appropriately. In my opinion, the first step is financing. Do you have a budget and a lender in place? Next would be engaging an architect to develop drawings so that you can bid the project out to contractors along with obtaining the necessary city approvals. Once you have the financing in place, plans drawn and approved, permits pulled and contractor selected a ground breaking ceremony will be in your near future! Good Luck and hopefully the small college town is my alma mater of Bowling Green!
Second floor generally kills a restaurant's business. Elevators generally kill expenses.
@Matthew King Thanks for your reply! At the moment, I am working on a viable business plan which includes a financial plan for start up costs and operating costs. The idea I had in mind was to construct these financial documents to show to potential investors in order to obtain sustainable financing with a payback plan. My dilemma however, is figuring out the startup costs. I know that by talking to an architect or contractor in the county, I can probably get a ballpark estimate for demolition and reconstruction costs. I am thinking that I should first talk to an architect who can help me put numbers into the documents. The town I am focusing on is Oxford, Ohio, home of Miami University. The parcel of land that I would like to purchase and work on is currently, in my opinion, highly overvalued and if I do not get a good price on this lot, this project will not be economically feasible. My main question at the moment is, how do I figure out my startup costs and how do I figure out my costs of operation?
Zachary, I totally love the idea. Marketing to the college kids will provide you with a continual income stream. I'm not sure if it will help, but have you tried reaching out to SCORE? I know they provide some great information. You should also reach out to CAMBA (Church Ave Merchant Block Association) they're a non for profit group. They helped me with a prior business I wad starting. Good luck with your project!
Originally posted by @Elizabeth Sylvince:
Zachary, I totally love the idea. Marketing to the college kids will provide you with a continual income stream. I'm not sure if it will help, but have you tried reaching out to SCORE? I know they provide some great information. You should also reach out to CAMBA (Church Ave Merchant Block Association) they're a non for profit group. They helped me with a prior business I was starting. Good luck with your project!
@Account Closed I originally wanted just to start a restaurant, but I would have to buy a lease on a building and I would have to renovate the space. If I own the building, I can design the restaurant while I am constructing the building. Additionally, income from the residential rental spaces can be used to fund the restaurant. The reason why I want the restaurant on the second floor is because it would overlook the city park. I would love to put frameless windows on the side that overlooks the park. I believe that residential spaces on top of the retail spaces would drive up revenue of the retail spaces because of the fact that it would increase the amount of exposure that these spaces get.
@Elizabeth Sylvince Thanks for the advice. I will definitely check them out.
So are you planning on a freight elevator and a passenger elevator? How many residential units will be needed to pay for an elevator. Will the City Park view from the second floor really add to the restaurant experience? Entertainment space on the first floor (bar)? What impact will this have on the residents as far as noise and parking and safety?
@Account Closed Thank you for raising these points and I see how they are important questions to address. The town is a small town and the space I am looking at has neighboring spaces that are also structured this way (aside from the second floor restaurant). The entire town is a college town and the main mode of transportation in the town is walking or biking. There are already a couple of bars on the block so I was thinking of a pool hall. As far as the freight elevator and the passenger elevator, I will need to give it more thought.
@Zachary Ngai cool idea! I've been to several restaurants with a 2nd story overlook of a nice view (though not in OH, lol) so that could work.
One thing I can't tell from above: is this land you're building from scratch on, or is this a 4 story property you're renovating? I read it like you're building from scratch, in which case, you absolutely need to build in accessibility but you could check with the local jurisdiction to see if just having 1st floor accessibility is adequate or if you need accommodations for wheelchairs to make it up to the 2nd floor as well. Near me there are several 2 story restaurants where I've not seen an elevator, but those are crazy old buildings which probably haven't been sold recently enough to trigger any accessibility laws (or it could be that I never paid attention honestly)
I'm a student at Miami and I think I know the land you're looking at. Recently demolished, right? Best location in town, rents for new apartments there are easily $10k per bed each year. As far as operation costs, I know a few business owners and landlords who I could put you in touch with if you direct message me.