Hello everybody! I didn't really see a more applicable forum, so am posting this here. If I missed a better one mods feel free to move it or let me know.
Short Version (Because I can get wordy!):
Any suggestions on good websites, videos, blogs, books, etc to read on how to operate a moderately sized (2500ish sqft, full bar and commercial kitchen) event rental space?
Search results for things I tried to look up mostly brought up click baity, overly simple types of articles, or had info that didn't much apply to my situation. A few things were for if I was running some major event space, which is also not really applicable.
Are any of the websites for event rentals worth posting to? I did see some sites that allowed listing properties a-la Airbnb style, but for event spaces. I suppose I should do social media, despite hating it?
What about good offline ways to advertise/pitch it such as professional event planners, physical bulletin boards (They're still a thing around here!), certain organizations that regularly do events, anything else worth it? Any just generally clever ideas on how I could use/market/pitch such a space?
Pricing - $250 for a full day seem reasonable? Should I do less than a full day rentals too for less? Seems many places do add ons for extra equipment, plates, flatware use, etc.
Any other completely different ideas for how to utilize the space that aren't a bar/restaurant? I've thought home based catering companies might have some interest, but other than that not much comes to mind.
So any suggestions would be appreciated!
The long version ended up absurdly long, but since I'd bothered to type it out I guess I'll leave it be for any masochists out there. Haha. I mean there's stuff relevant to the situation, and some other questions in there I wouldn't mind getting answered... So maybe somebody will actually read it :)
Long Version:
So several months back I purchased a lovely old brick building, largely with the intent of using the basement area for my own business as I needed working and storage space... As a "bonus" I basically got a fully kitted out 2500 sqft bar/restaurant upstairs! Essentially everything, including a walk in fridge, full commercial kitchen, old school bar fridge, etc was there and working. Newer flooring. It basically only needed a couple very minor things to be tip top. I've already fixed the few minor things, so I'd say it's in the kind of shape most middle class or even upper middle class folks would consider "pretty nice," but not awe inspiring. It probably wouldn't impress a decamillionaire jet setter or billionaire, but that's not likely to be my clientele anyway! Basically at this point I need to throw a few more pictures on the walls and it's ready to rock.
Anyway, I got a fantastic deal on it because I hustled it up off market, so I don't NEED to bring in a ton from it since I'm already getting my money's worth for my own use... But everybody likes extra money, right? So in thinking of the best ways to monetize it I have mostly landed on trying to rent it out as an event rental space.
Why event space? Several reasons. Given the population and market dynamics around here, I don't think a full service/bar restaurant would really be likely to make it. They'd have to be a destination for the whole county, which somebody might be able to pull off, but not likely. I sure don't want to run one either, and although I think I could find somebody to rent it to who doesn't realize it will fail, who wants a series of failing tenants? Also, I would prefer to not be constantly day in day out sharing the building with somebody else. So converting to more office-y space loses that too, and would probably have modest prospects of success anyway. I like having it all to myself, which it still will be most of the time if I do events.
I DO think a coffee shop would make money there, especially if I added in a drive through window, which is doable with the layout. However I don't really want to operate one right now (too busy), and I lose having the building to myself if I rent it to somebody for that purpose. I would say this is my Plan B if I ever NEED to bring in more money from the property though.
Converting to apartments would be the most profitable thing really (huge rental shortage here), but it seems a shame to ruin a nice commercial space if I can find another way to monetize it. I'm going to look into costs on building a 2nd story onto an extension of the main building for an apartment anyway!
Obviously location is everything, and this is in the boonies, not downtown NYC, but it does have some tourist draw...
It's in a small rural town that is also pretty close to several other small rural towns that are fairly interconnected as far as people going back and forth. Total population within 20-25 minutes is about 13,000. Mostly pretty blue collar to middle of the middle class population. It has a bit of a tourist element in the summer for ATVs, motorcycles, offroading, etc. It also has a smallish ski resort in my town (Mullan, ID), another ski resort 20 minutes away (Kellogg, ID), as well as snowmobile/other winter activities draw in the snowy season too. Wallace, ID is not even 10 minutes and it has a tourist draw of its own just because it's a cool old cowboy era mining town, which my town basically is too, but not quite as many sweet buildings! It's 45-60 minutes away from Coeur d'Alene Idaho, which is a bigger town, popular tourist spot, has a fair amount of money floating around nowadays. Just a little further to Spokane, WA which is a proper decent sized metro area.
So my thinking is essentially make it a very reasonably priced event space for locals and people from CDA/Spokane who want to do things on a budget, or like the idea of intentionally doing whatever in the mountains.
I am thinking maybe a $250 a day "basic fee" for the space all day/into the evening. This seems reasonable to me. It's enough to be worth spending the time letting people in to do their thing and locking up afterwards, but also hopefully low enough to entice people out here on price. Likewise, it's low enough that locals can afford it for some semi-casual events where the alternative might be just doing it at their house or a local bar/restaurant without privacy. Also, when looking at the afore mentioned event rental websites, I think around that price point was literally the cheapest thing listed anywhere in north Idaho. I don't think those were even for a fully private building, but rather for private rooms within operating bars/restaurants/hotels etc. I'm sure there are cheaper places, but they're "you just gotta know about them" type situations.
I can obviously raise it if I am getting booked more than I desire, or I guess contemplate lowering it if I'm not getting any traction... But does $250 seem like a good place to start? High, low? Somebody I was talking to the other day also brought up potentially doing 3-4 hour blocks for less. Think like a kids birthday party for just the afternoon or whatever. The "time overhead" of having to deal with it and only getting $100 or whatever seems unappealing... Also, seems like you may cannibalize people booking it for all day by offering it for the shorter period... But if anybody runs a space and finds this to be where they make a ton of money maybe it'd be worth it? The place is all of 2-3 blocks from my house after all...
Other than the broad strokes above, I do have some more specific questions...
It seems like a lot of places have incremental up charges. There's a basic fee for the space, usually a cleaning deposit (Unless you just force everyone to pay for cleaning as part of the basic fee. I'd think maybe $50-75 deposit is reasonable as I could get it cleaned for about that, depending on how messy it was left), but then add ons. For instance if you want to use real plates, silverware, etc that would be an additional charge. Use our pots/pans/cooking utensils, add on charge. You want a cook or bartender, add on charge. You want a PA/stereo system, add on charge. You get the idea.
If this is indeed the standard way as it seems to be, any general guidelines on how one should price these add ons out? Obviously with bartenders/cooks, I will have to see what some of the ones I know would want to make to work an event, and then add on markup for my time of arranging it (Or would I be better off having the client directly book people after I merely send them their way for liability reasons?)... But what about table service for 40? How much for the PA? $50? $100? Stuff like that would be nice to know. Any other add on services that have worked out well for people running similar spaces?
Other than the stuff above, one of the only other questions I had was permitting/insurance. I don't think one needs a business license per se to rent out a property they own for an event, right? So I can skip that unless I want to for my own legal/tax reasons? My town doesn't have any STR laws of any sort, so I think I'm in the clear on that. In theory I believe alcohol permits are only applicable if an event is open to the general public. So really I shouldn't have any permitting/licenses needed in general as far as I can tell, other than if I want to for legal/tax reasons. Correct me if I'm wrong on any of that...
As far as insurance, if I get people to sign a liability disclaimer as part of the rental agreement, will that hold up, or will I still be on the hook and the property at risk even with a disclaimer? Because sadly the sanctity of contracts is overridden by a lot of so called consumer protection laws nowadays...
In other words, should I definitely cover myself with a policy every event one way or another? I'm sure I could get a general policy of some sort added onto the building insurance I have that would cover an event rental usage. Would that be a pricey thing, or maybe a small difference compared to just covering the building?
I also saw some online companies offer 1 day policies nowadays for events. IIRC some were like $30-40 bucks. Should this be something I get and pay for to cover myself from accidents during events and just eat it as a cost of doing business? Should it be something I direct people to purchase at their discretion? I guess the cost of a permanent policy and whether or not a liability disclaimer will hold up kinda makes these decisions for me, as I don't like the idea of getting sued for a million bucks because some drunk person trips and breaks their back.
That is enough of a novel for now. LOL I hope it's not too detailed to dissuade people from responding, as I would love some pointers in the right direction on this.
Here are some old pics of the place from the Facebook page of a business that used to be in there.
The answer is yes. And frankly, he doesn't even have to be an employee. You can pay people a flat fee for performing services too. Kind of like a commission. Depending on how much money you pay them a year you could have it be an independent contractor situation where you either do or don't have to do tax forms on it, or simply a "fee for service" as a customer which means you have no liabilities as an employer or person contracting somebody etc. There are a lot of ways. But there's no reason somebody can't look around at properties for somebody else.
@Danielle Jackson Thanks for the input here. Not sure about the splitting option, but I'm guessing it's not due to my family member who checked into it about 10 years back. I believe the previous splitting was done prior to that rule being put into place.
As mentioned Seattle is one of the worst places in the whole country, for all the reasons listed and more. In the future it will only get worse, not better. Lord only knows what kind of crazy laws they can cook up regarding real estate. I grew up most of my life in western Washington, and lived in Seattle proper for 15 years... I finally left last year for Idaho.
EVERYTHING is falling apart there because the place is run by lunatics. As I told people for the last several years I was there, as everything was falling apart, "There's a difference between being liberal, and being bat s**t crazy. These guys have crossed that line." Seattle was plenty liberal when I moved there, but the politicians were still living in reality, and trying to actually make things functional. At this point they're passing bonkers laws, that will obviously have horrible effects in the real world, simply so they can virtue signal. That isn't a good sign for investing there, or anything else. If something cannot work in reality, but you do it anyway to prove how kind hearted you are, all that will do in the long run is destroy everything. There's a reason millions of jobs and people are fleeing from places like CA, WA, NY, etc. I wish the whole world was sunshine, rainbows, and kittens too... But it's not, so you need to work within what is possible and practical. These people don't do that anymore.
A Bill Clinton in the 90s kinda liberal can try to be soft around the edges, and compassionate, and whatever... But at the end of the day they still realized some stuff was not possible, too crazy, etc. The people running these hyper woke areas give zero consideration to real world outcomes. It will not end well. I think this is an already in progress repeat of the 60s/70s when people flooded out of major metros because they went to hell in a hand basket. Time will tell.
I'm more or less libertarian, so line towing conservatives definitely annoy me on some issues too, but in 2021 I'll take those issues over the crazy in progressive areas in a heartbeat. At least conservative areas have functional societies. It seems like hardcore progressive are literally trying to destroy civilization in the places they run.
Any which way, if investing in Seattle were the only option the world, yeah you can probably make it work... But it's not. So why invest in an area where the pricing is already so high there can't be much more meat left on the bone (to equal the returns over the last 7-8 years in percentage terms you'd need 3-4 million dollar 3 bedroom houses in 2030. Does that seem realistic?)... The laws are waaay slanted against you now... The laws will only continue to get worse... At a time when big tech has finally realized they don't need to concentrate their whole workforce in a half dozen cities... I could go on. I don't think SF and Seattle have bright futures without some major changes being made
Invest somewhere that's more favorable, and has more meat on the bone. I wish I'd had more cash to deploy a few years ago as I saw several areas as coming up before most people did. But I'll do fine going forward where I'm at now, so no complaints.
Tell us what you Really think. Lol
You are spot on.
Oh you don't want to hear what I REALLY think! LOL
But seriously, it's a bummer. A lot of the best places to live in the country have been completely ruined as livable places by morons doing things that have tried and failed countless times, and that anyone with common sense knows are awful ideas. It's frustrating, especially for someone who grew up in 2 such areas (my dad bailed out of the Bay Area when I was a teenager), and who has now had to move twice when I didn't want to to get away from the stupid.
I just don't get how they don't deploy common sense with a lot of this stuff. As I said you can try to be "compassionate" where you can, within reason. Personally I think almost all big government fixes fail, but as long as you keep it within reason I can put up with some of it. But they've just strayed too far from what can actually work or maintain a functioning society. It's not like these are all new ideas, they've been tried and failed a ton of times just in recent history. Funny thing is talking to most people in Seattle on a 1 on 1 basis almost nobody actually agrees with most of the super crazy stuff. They want it all fixed/changed. They're liberal as heck for sure, but not totally bonkers... Yet for some reason in public nobody will say it out loud (Probably because they don't want to be fired from their job for wrong think or be called a Nazi for having a mere center left opinion I guess...), and they vote for the extra crazy folks. It's nuts.
I hope the spectacular fail happens quickly and we return back to running things in a sane manner. I'd consider moving back to western Washington if the policies got rolled back to like they were 15-20 years ago when the state was actually pretty well managed. The taxes were like half or less what they are now, AND somehow the state STILL had a balanced budget most of the time, maintained infrastructure, did all the stuff a government needs to do, etc. And the crime was vastly lower. What a HORRIBLE way to do things, right?
As mentioned Seattle is one of the worst places in the whole country, for all the reasons listed and more. In the future it will only get worse, not better. Lord only knows what kind of crazy laws they can cook up regarding real estate. I grew up most of my life in western Washington, and lived in Seattle proper for 15 years... I finally left last year for Idaho.
EVERYTHING is falling apart there because the place is run by lunatics. As I told people for the last several years I was there, as everything was falling apart, "There's a difference between being liberal, and being bat s**t crazy. These guys have crossed that line." Seattle was plenty liberal when I moved there, but the politicians were still living in reality, and trying to actually make things functional. At this point they're passing bonkers laws, that will obviously have horrible effects in the real world, simply so they can virtue signal. That isn't a good sign for investing there, or anything else. If something cannot work in reality, but you do it anyway to prove how kind hearted you are, all that will do in the long run is destroy everything. There's a reason millions of jobs and people are fleeing from places like CA, WA, NY, etc. I wish the whole world was sunshine, rainbows, and kittens too... But it's not, so you need to work within what is possible and practical. These people don't do that anymore.
A Bill Clinton in the 90s kinda liberal can try to be soft around the edges, and compassionate, and whatever... But at the end of the day they still realized some stuff was not possible, too crazy, etc. The people running these hyper woke areas give zero consideration to real world outcomes. It will not end well. I think this is an already in progress repeat of the 60s/70s when people flooded out of major metros because they went to hell in a hand basket. Time will tell.
I'm more or less libertarian, so line towing conservatives definitely annoy me on some issues too, but in 2021 I'll take those issues over the crazy in progressive areas in a heartbeat. At least conservative areas have functional societies. It seems like hardcore progressive are literally trying to destroy civilization in the places they run.
Any which way, if investing in Seattle were the only option the world, yeah you can probably make it work... But it's not. So why invest in an area where the pricing is already so high there can't be much more meat left on the bone (to equal the returns over the last 7-8 years in percentage terms you'd need 3-4 million dollar 3 bedroom houses in 2030. Does that seem realistic?)... The laws are waaay slanted against you now... The laws will only continue to get worse... At a time when big tech has finally realized they don't need to concentrate their whole workforce in a half dozen cities... I could go on. I don't think SF and Seattle have bright futures without some major changes being made
Invest somewhere that's more favorable, and has more meat on the bone. I wish I'd had more cash to deploy a few years ago as I saw several areas as coming up before most people did. But I'll do fine going forward where I'm at now, so no complaints.
So I'm a guy, 35, in a similar boat kind of... I dated 2 girls for a combined total of 10 years in my 20s and early 30s, and am feeling the pinch to actually find one worth having kids with. I don't have quite the biological clock that a woman has, but in practical terms I don't want to be having my first kid when I'm 50 either! So I get where you're coming from.
In my thinking on the subject, the reality is you need to put having a family first... Because that has a HARD time limit on it. Nobody likes to tell women that nowadays, but it's true. You can always make more money, get promotions, etc down the line, but you get ZERO do overs on starting a family that's actually biologically yours. You miss the boat and you can never have that. Ever. And the older you get, the harder it is to conceive and the higher the chances of birth defects (most people don't know it, but it's true for older men too!), so sooner is always better. It's inconvenient, but it's just our biological life cycle, and it has to be accepted for what it is. I hate how "society" nowadays tries to tell women that they NEED to put career first even if they want a family, because it's the exact opposite of the right way to go about it given biological reality. You shouldn't feel guilty for wanting to put having a family first, so don't let people head trip you into feeling that way! I'm going to be putting that as my number 1 goal in life in the coming years.
That said, you don't have to not get other stuff done too. There's nothing that stops you from investing while you're trying to find the right person to settle down with. You can still buy a house, house hack, and then move on to the next property while dating! You can probably even squeeze in hobbies! LOL But honestly, if anything, stuff like horse racing etc is the stuff to cut if you truly don't have enough time. I've been spending less time being frivolous because I'm still knocking out financial goals, and want to get the wife thing on lock down before too long too. There are some silly things you can only really do when you're young, but you can do plenty of stuff when you're 40+ too! So I'd say go for family first, finances second, and then squeeze in the other stuff that you can. Take care of the important stuff first, right?
That's my 2 cents anyway.
Foundation issues are scary! Were you expecting the foundation problems or did that come as a surprise? Just wondering if you budgeted for that initially or not?
Foundation issues don't have to be scary! It really depends on the type of foundation and nature of the problem. I just bought a 100 year old house that had settled over the years and had a decent incline in the front half of the house. Because it has a basement with easy access it'll be a piece of cake to jack it and shim it if I decide to.
I think foundation issues might be one of the best things to find in a value but, just because it scares people so much more than it should. I mean have a pro look at it if you don't know what's what, but a lot of the time you can jack a house to relevel it for just a few grand. 10-15 is usually MAX for a really severe problem.
Normal investors look for the stuff that scares consumers away, like an ugly kitchen... I'm beginning to think smart investors should look for problems that scare normal investors away for their value add properties.
So perhaps a better question to ask:
Does anybody know of any bank statement or cash flow lenders that were doing sub $150K or even sub $100K BEFORE Covid?
Those guys will probably return to it when they can, so I can always follow up with them when things normalize a bit.
The property I am buying would need a minimum ARV of $187.5K to refi with them to arrive at $150K financed, and that's probably right on the edge of what it might appraise for after a massive amount of upgrades. I should be able to refi much sooner if I don't need to hit that number.