All Forum Posts by: Daniel Bryant

Quote from @Jacopo Iasiello:

Hi Daniel, Market Demand for Workspace Rentals: The core of your business model revolves around workspace rentals for creative professionals. Assessing the demand for this service in your area is crucial. Is there a burgeoning community of artists, designers, or other creatives who need space? Have you conducted market research or surveys to gauge interest levels?

Although we did get a response it wasnt as overwhelming as our sister properties in Queens NY. So hard to tell if this will take off fast and or fill up, which is why I was going into this thinking that if worse case scenario it wont take off we could sell the property and break even at the initial cost I assumed it to be, but now with the construction costs being higher Im not sure that Im willing to take that chance

My wife and I bought a residential property in the outskirts of Columbus OH in a beautiful neighborhood. It's 1800 sf on a 1.2 acre of land. We purchased it for the purpose of rezoning to commercial and expand our existing business model (workspace rental for people in the creative field). We got it for a really good price of $360,000 on a super low interest rate (3%) back in '21. So that part is great. We spent the next two years hiring an architect to help us with the rezoning process and finally embarked on getting it zoned commercial changing the occupancy status from R-3 to B, S-1. Also that is great!

The proposed plan which got approved is to expand it from 1800 sf to 4235 sf, and initially I speculated that this may cost $300-350k to do and budgeted it accordingly. However after all the work thats required which includes landscape, parking lot, fencing lighting and interior/exterior work, it looks like the presumed cost of remodeling it will be double that, although Im not positive (still taking bids).

Ive priced a comparable property in our area which has similar square footage and lot size and they seem to be going between $700-800k, and so my question is: based on a higher than expected construction cost which is necessary to finish our project, one which will exceed the amount of money of what a similar property goes for in our neighbrhood, should I continue with this project, or an alternative plan would be to simply beautify it for approximately 100-150k
and ditch the plans, and flip it instead for approximately 700-800k now that its zoned commercial.

My fear is that if I do invest the moneys to finish the project over the budget I initially priced it for, and the business doesnt take off, I would initially lose money on this investment.

Thank you for taking the time reading this.

Thank you all for reflecting on this and having a great insight! Definitely helped me understand more about the project involved and responsibilities 

Quote from @Matt Devincenzo:

Is your proposal a fixed fee, or a time and material billable? Or said another way, if implementing what took 14 hours in SD takes 130 hours in CD would you expect to pay them more for that? 

Without knowing the scope of your actual project it is difficult to comment on the fee. If they are a fixed fee then maybe they anticipated a lot more effort to get the SD portion done than it ended up taking. The question then is were you happy with the cost before you knew how much time they spent? 

Hey Matt thank you for this,
I did question the logistics behind the price on the second phase (the current 27k project Im in contract for now) and since I had no idea what level of detail they would get into with the drawings AND based on my satisfaction with their progress so far until then, I decided to commit to it.
The price is fixed but it also does say in a disclaimer that they will bill additionally if further work requires billing. Much like they have in phase 1.
They bill me per stage, so in that sense I assume that the SD stage took 2 drawings and a few phone calls and there goes 7 grand. Im not too sure Im happy with that, but as you mentioned, I do not know what involvement is required for further stages. If it does take a longer time than of course Im happy, but in the event that it doesnt than I paid too much.
The project is to convert an existing residential building (5 bed/3 bath 1600 sf) into a commercial property of 13 rooms at 4000 sf. 
In addition, the civil engineer duties are handled with a different contractor
Hope that clears things out a bit

I have been developing a commercial property in Columbus Ohio and assigned an architectural firm to assist. They have been engaged in my project in 2 phases, first was to draw preliminary sketches and engage with the township to get zoning/regulatory aspects in line with my needs. they have done that for just under 10k and the work was lengthy (took over 6 months and was jam packed with meetings/hearings). I was very happy with the job there.

Now that I am in the second phase which is primarily design based and much less running around city/township zoning matters, I have a feeling that Im being overcharged. The architectural firm sent me a proposal for 27k which involves the following:

Schematic Design (25%) Step 3 Total: $ 6,978

Design Development (25%) Step 4 Total: $ 6,978

Construction Documents (50%) Step 5 Total: $ 13,956

I am almost done with the Schematic Design step and feel like the architect has spent no more than 14 hours to achieve the drawing/plans for that step.

Does anyone here have any inclination if that sounds right? Am I being overcharged?

Quote from @Dwayne Poster:

change of use is a common mortgage clause, typically giving the lender full discretion.  Checking with your lender will provide the correct answer.

 I just finished reviewing the terms. No wording regarding "change of use", below find the only mention of occupancy 

Thank you all for replying, I will review the mortgage terms more thoroughly and share here. 

The property is currently owner occupied and we intend it to stay that way 

Quote from @Russ Kitzberger:

It depends, check your mortgage terms, rezoning, or similar acts of government many times do not necessitate a term change in a fixed rate loan. Now if you vacate the use, that may be a different issue. Again, check your mortgage terms.

 Thank you for this. Yes, our property is indeed owner occupied, and when we will finish with the rezoning stage it still will be owner occupied but fully commercial. we plan to rent out some of the offices as storage units and such but it will still be owner occupied.

Im gonna have to review the lending agreement more carefully but when I discussed this topic initially with my mortgage broker he said that there shouldnt be an issue with lending terms based on the status change, I just needed a confirmation I guess

I purchased my residential property last year in Ohio and I was fortunate enough to secure a conventional loan at 2.99% for 30 years. I am now considering rezoning my property for commercial use (office) since the township is willing to accept me doing so. 

My question is, can my mortgage rate/terms change if i rezone it to commercial?

I do not have an escrow with the lender and pay insurance/taxes independently

Thank you!

I own a commercial property in NYC and have clients who rent monthly units from us (similar to storage, but only with 24/7 access). The clients account to us through an automated credit card charge which we run once a month.

I was wondering if I can perform a soft/hard inquiry on future tenants once they apply for our rentals and if so how do I go about doing that?

We do have a merchant account and we are an LLC