I’m looking at a brick and mortar firehouse that I can potentially convert into rentals if zoning allows me to do so, they are asking 400K and In my market average 2 bedroom apt.rent for 1200-1400. Just providing these numbers for context I know obviously I would have to account for vacancy, CpX, management, financing all that good stuff and the number of units would obviously would be dictated by the size/sqft but overall does having a good pre established building with water and electricity and sewer mean that I can definitely build out my apartments for a discounted price compared to new construction.I don’t want to give the wrong impression, it’s not a dump in anyway. There’s a large ballroom with hardwood floors and it looks good in the pictures.Has anyone done this before? I am new to investing in real estate but have been waiting to find something that will set me on the right track. I see so much value to add when I put on my investment glasses that I can’t see how I could go wrong if the numbers make sense. It’s just one of those things that isn’t done everyday but that’s the type of investor that I wish to be. I hear of people making a K-mart into storage so why can’t I do the same with this. There is even a small storage building in the rear that I could rent out or make a detached office for a property manager. I know it sounds like a lot of variables for an inexperienced person like myself but at the end of day numbers are numbers. Even if this doesn’t work out I know I’m on the right track and I enjoy sharing any ideas I have with the group. Thanks in advance
@Corey Kenney this certainly sounds like an interesting project. Put some numbers down and bring it back to the forum. BP is a great place to bounce your ideas and plans around to see what people think of them.
A deal like this has TONs of possibilities and lots of risk. Start with the basic numbers:
It will cost me $800,000 to have rental ready apartments. I can get 4 apartments each renting for $1400/month in the building. 4 x $1400 = $5600/month in gross rents... STOP. Not even close to the 1% rule, move on to the next deal.
Totally different story if the $800k investment brings 8 or 10 or 14 apartments online. Once you figure out it is worth your time, then dive deep into the details.
Maybe it is actually a flip deal :)
at least you'll have the fire code requirements nailed down :))
I agree with @Aaron Montague it's not a viable deal with only 4 units.
Aaron and Pat thank you for the insight. I may be ahead of myself but I understand what you are saying. I would treat this like any other property. If I make any advances with this I will reply. Much appreciated as always.