I'm looking for advice on a commercial property deal

[Dimitra Manou]

I have found a commercial property (zoned ccg2). The property is 1,080 sqft/ 2bd/ 2ba/ lot: 0.25 acres/ year built: 1930. The property is vacant at the moment, I found an average rent of this area and it needs full rehab (40K-50K). Comps: 1) $209k 2) $749K / ARV: $479K / Average rent per sqft : $14,3/y. Gross annual rent : $14,128. Taxes are $1280 and insurance is $980 annually. No mortgage. This property will be $170K under contract. Employment and population has increased (for this zip code also). Is it a good deal?

[John Mocker]

Dimitra,

From an insurance standpoint, you will be starting out with a vacant building policy (some companies will write a regular policy fi you can show a signed lease with occupancy with 30 days).  Knowing what the likely tenants will be can be important to determine Insruance costs.  If you have higher risk occupancies (commercial cooking, woodworking, ...) that could be much more than if the occupanies are lower risk (office, retail, ...).  

If you can get the current owners Insurance Loss history (Loss Runs) that can help an agent with the quoting.  It may also indicate areas that you want to pay more attention to (if they had a water leak, was it completely remediated).  I would also try to find the historic uses for the site.  If there was any prior use that could have caused environmental damage (leaking chemicals, buried wastes, etc,) you might want to have it checked out.