Thanks for the feedback. It is a bit of a non traditional situation, which may result in me obtaining an expensive education. The long and the short of it is that I have two office buildings next to each other that are both older (1980 and 1950s). Both buildings have flat membranes and then the old school shingle look on the outer and upper portion of the exterior as can be seen in the photo.
The older of the two buildings pictured has a funky roof. I am more of a residential investor, but have some experience in commercial real estate valuation, so took a chance on this building a couple of years ago. Bought it from a brother / sister team that inherited it and were not very proactive property managers. Most of my value add items have play out, such as:
1. Lowered the property tax by about 20%
2. All tenants paying higher rent
3. Lowered operating expenses, particularly utilities
4. Implemented a gradual maintenance and repair plan to resolve inherited deferred maintenance.
I was having trouble lease a vacant space when a roofing company that bid on some of the repairs saw the space and asked about trading rent for roofing work plus some additional money on certain phases. The plan is to work on the two flat roofs to extend the life by 10 to 15 years and then redo the shingles. The amount of work performed on the flat roof seems to not match the value, which is obviously subjective. The timeliness of the work is good and the quality of the work is good, but it just seem really expensive. For example $1,000 or less of material and 40 labor hours for $5,900.
Where I failed was not obtaining more bids on the work to get a better idea of cost range. I did have them sign a formal lease and have a separate work agreement, which is seeming to be smart at this point.
