All Forum Posts by: Marko Zlatic

@Colleen F.

 Thank you for your input. I will do some more research regarding the insurance once it passes as an ancillary dwelling

@Fay Chen Thanks for the head's up!

@James Wise

The driveway has been accounted for in the budget. This is an old aerial, the new drive is concrete :) 

@Fay Chen

Thanks for your input. My father and I are thinking of building a separate garage for the new tenant anyway, most likely NE of the workshop in this picture. 

The thing is...this workshop is on the same parcel as my actual residence. I am thinking about just doing this project with straight cash, no financing. 

Also, what do you recommend regarding insurance? This is technically a workshop, not a residence... 

My land is zoned multifamily fyi

Bump

Link to the picture if its too small...

LINK TO THE AERIAL PIC OF THE PROPERTY

All,

I currently live on 5 acres of land with my home towards the front of the property and a 960 square foot workshop/garage about 160 feet behind my house. The workshop/garage has gas, electric, water & sewer running to it all metered as part of my home (Not separate). 

My father and I are considering converting this workshop/garage into a rental apartment since it is just sitting there not being used for anything.

What are some potential issues you see with this idea? I specifically have questions about:

• Rental Inspections
• Insurance/Insurability
• Setting up an Address for the apt (123 Main Rd A & 123 Main Rd B?)

All of your help is greatly appreciated! Thanks. 

Hearing all of this feedback in my opinion is GREAT news. It sounds like there is a staggering amount of unprofessionalism that is rampant throughout this industry which tells me that if you become a SOLID, PROFESSIONAL wholesaler who has integrity and sees the big picture... you can do very well in your local market.

Who Agrees?

Thanks @James Wise 

Bump! There have to be more Clevelanders out there than just James!

Hi Cleveland RE Investors, 

I am interested to know who you are working with and would recommend in the Cleveland area for the following:

• Title Company
• Legal Counsel
• Property Management
• Accountant

Thanks!

These are two completely different animals with much different players. The one thing that hasn't been mentioned so far in this thread is forced appreciation. The scale of which you can force the appreciation on a commercial property is so much greater.

We must all remember that commercial property derives it's value from it's NOI and cap rate. This allows someone like Omni Property Companies to purchase a distressed office building, re-tenant it, add value (rents), increase the NOI and sell it for significantly more than what we bought it for.

VERY simplified example:

1 Single Family Home

Rent: $1000/mo

Gross Rental Income: $12000

Annual Expenses: $7200

NOI: $4800

1 distressed office building purchased for $1,000,000

NOI at the time of purchase - $100,000

CAP Rate - 10%

New leases that add $20,000 to the NOI

New NOI - $120,000

New Value of building: $120,000 / .10 = $1,200,000

Voila you just increased the value of this building by $200,000 by simply adding $20,000 to the NOI via lowering operating expenses, signing a new lease, raising rents, etc.