Hi,
I am currently looking at 2 separate commercial properties to purchase. I haven`t ventured into the commercial end of real estate yet, nor have I purchased a property as a joint venture, so I`m hoping for tips and advice here. Also at this point I don`t have any cash to put into my deal so I am hoping that my sweat equity as well as putting together the what, where and how will be worth something to my possible investors.
Both properties are a bit different projects so I`ll start with the first one.
My intention for the first building is a self storage center. Building is 18,000 sqft and has a fairly decent location. The property is not on the market, but I have spoken with the owner who is willing to sell it. I believe the price I can purchase this property for is about $300k under market value. I have taken all the measurements on the building and am taking my drawings to my architect next week to look at the possibility of building a second floor inside, as the ceilings are 20ft. high. I have worked out the numbers and the cap rate is great and even at a 40% capacity without the second floor it will cover itself just fine. The building will need a fair bit of upgrades in order to build the units inside but I have already worked that into my budget. When my plans are completed I will then start pricing out exact building costs, just to make sure my budget is in line. Once my business package is complete on this building I`m not sure where I should go with it. I have the option of putting the $300k of the under market value in as a portion of my investment into the project, as well as my leg work in getting the project all setup. Or I could sell the package, idea and building and have nothing further to do with it. Or find something in the middle that would leave me with a bit of cash and a bit of equity in the building. The only reason I am torn between what to do is because I have another completely separate project I am working on with a different building and this would give me the money needed to do that other one on my own.
The second building is listed currently, at what I believe to be above market value but there hasn`t been any bit of interest on it what so ever and it`s been listed for nearly a year now. I can`t really go into details about my idea for this building because it is an extremely unique idea that I don`t believe anybody has done yet. I also don`t think I`d want to hand this idea off to anybody else because it will have an extremely positive affect on my current business as well. I also hope to expand this idea into other cities. I do believe that this building will initially be less profitable then the first building idea and will be more work to start as well, but it would be all mine if I were able to sell the first building idea.
Anyways, that`s my story in a nutshell. Any suggestions, critisisms or ideas would be greatly appreciated.
Thanks
I am currently looking at 2 separate commercial properties to purchase. I haven`t ventured into the commercial end of real estate yet, nor have I purchased a property as a joint venture, so I`m hoping for tips and advice here. Also at this point I don`t have any cash to put into my deal so I am hoping that my sweat equity as well as putting together the what, where and how will be worth something to my possible investors.
Both properties are a bit different projects so I`ll start with the first one.
My intention for the first building is a self storage center. Building is 18,000 sqft and has a fairly decent location. The property is not on the market, but I have spoken with the owner who is willing to sell it. I believe the price I can purchase this property for is about $300k under market value. I have taken all the measurements on the building and am taking my drawings to my architect next week to look at the possibility of building a second floor inside, as the ceilings are 20ft. high. I have worked out the numbers and the cap rate is great and even at a 40% capacity without the second floor it will cover itself just fine. The building will need a fair bit of upgrades in order to build the units inside but I have already worked that into my budget. When my plans are completed I will then start pricing out exact building costs, just to make sure my budget is in line. Once my business package is complete on this building I`m not sure where I should go with it. I have the option of putting the $300k of the under market value in as a portion of my investment into the project, as well as my leg work in getting the project all setup. Or I could sell the package, idea and building and have nothing further to do with it. Or find something in the middle that would leave me with a bit of cash and a bit of equity in the building. The only reason I am torn between what to do is because I have another completely separate project I am working on with a different building and this would give me the money needed to do that other one on my own.
The second building is listed currently, at what I believe to be above market value but there hasn`t been any bit of interest on it what so ever and it`s been listed for nearly a year now. I can`t really go into details about my idea for this building because it is an extremely unique idea that I don`t believe anybody has done yet. I also don`t think I`d want to hand this idea off to anybody else because it will have an extremely positive affect on my current business as well. I also hope to expand this idea into other cities. I do believe that this building will initially be less profitable then the first building idea and will be more work to start as well, but it would be all mine if I were able to sell the first building idea.
Anyways, that`s my story in a nutshell. Any suggestions, critisisms or ideas would be greatly appreciated.
Thanks
