Hi Ayodeji, Good to hear from you. I’m glad you enjoyed it, and hope you continue to ask yourself this question! Take care, Matt

Hey Anthony, Great question. The lot will add value to our two buildings that are adjacent to it as we will offer up paid parking as an add on to the tenant’s leases. Although there is a fee, parking right outside your office / store / apartment is of value in this area. We will charge $50 per spot and have 15 spots slated for the lot. To break those numbers down, we paid $18,000 to remove the back section and are budgeting an additional $5000 to pave the lot, so $23,000 invested to create the parking. With all spots leased we will have revenue of $750 per month or $9000 per year, which is a 39% return on our capital per year. All expenses like tax and insurance would be paid by the rents from the part of the building we didn’t tear down. Now let’s compare that yield to the other option, which would be leasing 800 SF of space in the back of our building. Renovation of the space would cost $40,000 including structural repairs, roof, rock, paint, and electrical repairs. Rents are hard to predict as the building has a front section with 2000 SF remaining, so I would have had to offer this renovated space as an add on to that tenant. I didn’t see how I would arrive at the same yield, and actually think that I would have had to “throw the space in” with a prospective tenant because they just would need it. And they would be asking me where they are supposed to park, LOL. Thanks again for the comment, I’m glad it gave me a chance to break the numbers down. Matt

Hey Aleksandar, Good to hear from you. The zoning for the building allowed for several uses, one of which was a parking lot. It’s a mixed-use building so commercial and residential uses are also allowed. If we had converted it to, say, a gas station then we would have had to apply for a zoning variance which would have taken another 4 months. No thanks! Matt

Hi Kenneth, Good to hear from you. I would suggest that you consider one of the rehab analyzer softwares out there. They typically have estimates for costs included in the spreadsheets. If your goal is to get exposure to general construction methods and knowledge, consider spending some time on a construction jobsite either as a volunteer or apprentice to learn hands on. For the anaysis softwares, I use Flip Analyzer, you can find it at http://www.RentalSoftware.com. I actually negotiated a coupon code with them, use “derosa” to get 10% off. I hope that helps!

Hey Ashley, Thanks for the comment!! Creativity benefits you EVERYWHERE in this business – financing, marketing, sales, and of course highest and best use of the property. Glad you enjoyed! Matt

Hi, I’m glad you enjoyed it! Matt