Industrial Conversion?

[Goach2]

Hello all,

I am currently looking at a property that could have huge potential, but there are several complications that could hinder it:

The property is a small factory (14,000sqft) with a residential rental unit on the upper floor. The zoning is `Residential Development` which basically means a sort of holding pattern until some development takes place in the future. I already own a 4-plex in the area that is also RD and had a commercial unit which I have legally changed to residential. What I would like to know is how feasible it would be to have the commercial factory divided up into rental units (~14 @ 1000sqft each)? Since it was previously used as commercial and will have more than 5 units, would it remain commercial? Or are these two differnt commercials we are talking about?

Any information is greatly appreciated!

Goach

 

[Thomas Beyer]

QUOTE (Goach2 @ Aug 27 2010, 11:31 AM) ..

Any information is greatly appreciated!

step 1: talk to city .. what do THEY want there ? What would they allow there ? What condition would they put on you as a developer to convert from "factory" to "residences" ?

Step 2: analyze demand for a rental unit complex or condos .. given the location, its potential and its surroundings !

Step 3: analyze the mortgage situation .. can you fracture the mortgage to sell off condos ? Can you get a residential mortgage with or w/o CMHC ? or can you get only an industrial/factory mortgage at maybe 40% loan-to-price?

Step 4: are there any environmental issues (oil ? gas leaks ? chemicals ?) from its former commercial use that would impact residential zoning / conversion ?

Step 5: are there any structural / building issues i.e. is the elevator usable for residents or is it an industrial elevator .. what are the windows like .. what are the wires / pipes ... i.e. do you have to bring the building to current residential code (see point 1) or can you grandfather a lot of the existing structure ? This may be a major issue / show stopper money wise .. or it may be minor.

Step 6: assuming all clear so far .. what investment is required to build new residential units ?

Step 7: do you have the cash to do all that .. or is there a lender that helps you along ? is this a good investment, based on all factors considered ?

 

[Goach2]

Thomas - Thank you for the criteria. I have added them to my own and will report back with my findings as they come in.

Goach