Former Bank brankch excess inventory sale

5 Replies

Hey, Has anyone had any experience purchasing excess bank real estate inventory? Is there anything to specifically look for or be careful of? There’s a former bank branch that I may be able to purchase for really cheap, but have no experience in this or commercial in general. To be honest, I have no plan in this case, but if I can get it for cheap enough perhaps it’s worth it? Thanks!

Are you talking about the building specifically? 

I have some experience, having knocked down a drive through location and replaced it with a national food service company in a nice town and then also purchasing a historic bank building and leasing it out as office space. In both transactions there is nothing to different then other real estate transactions. 

Take a look at what the local zoning will allow to come into the space or let you build if the building is too odd. After that figure out who some prospective tenants might be and what the going rate for similar space in your area is. (I.E. how much would a new tenant pay to be in the space). Then figure out how much tenant improvement work you need to do to get that new tenant and you have your future income and your repairs figure. Once you know the income you can calculate your NOI and then apply a whatever cap rate is applicable for your area and product type to find the ARV, and you can get a sense of what you need to get the property for to make it a deal.

You are basically purchasing a 100% vacant stand alone building, make sure you feel confident on who your future tenant is and that there is demand for the space. 

Originally posted by @Steve Wilcox :

Are you talking about the building specifically? 

I have some experience, having knocked down a drive through location and replaced it with a national food service company in a nice town and then also purchasing a historic bank building and leasing it out as office space. In both transactions there is nothing to different then other real estate transactions. 

Take a look at what the local zoning will allow to come into the space or let you build if the building is too odd. After that figure out who some prospective tenants might be and what the going rate for similar space in your area is. (I.E. how much would a new tenant pay to be in the space). Then figure out how much tenant improvement work you need to do to get that new tenant and you have your future income and your repairs figure. Once you know the income you can calculate your NOI and then apply a whatever cap rate is applicable for your area and product type to find the ARV, and you can get a sense of what you need to get the property for to make it a deal.

You are basically purchasing a 100% vacant stand alone building, make sure you feel confident on who your future tenant is and that there is demand for the space. 

 Did your historic building keep the safe? I love hotels in repurposed banks esp in DC/NY.

Safe was gone before my time unfortunately. The room it was in however had 12" thick concrete walls, and ceiling and was on a 2' thick concrete slab. We put bathrooms in there and it was a real challenge to core drill for the plumber

The vault could/might be impossible to remove without a lot of $$$.  Other than that, bank branches are typically good projects because of their locations and parking. Just generally speaking from SoCal real estate perspective. 

I have seen bank vaults to remove cost about 25,000 to 35,000 or more. I have seen some turned into jewelry stores, camera display store, restaurant speakeasy type thing, Fed Ex shipping type place, etc. 

You just have to buy it at the right price and know conservatively what you could rent it out for and to whom for safe margins.