Mixed Use - First Property, East Irving Park
Hello BP community!
I'm in a whirlwind this week, and in some research this evening, i found this site and found a lot of good information and context for my thinking/planning. mostly i am looking for a sounding board, as I dont have a network of trusted people for opinions yet. being my first property, my knowledge is largely based on unsolicited advice from friends, family and co-workers. i know this post will end up being longer than i want it to be, but here's my story, and my questions:
after years of searching, my wife and i found a property this week that fits our checklist in a big way. we are ready to put in an offer as soon as the financing pre-approval comes back. it's a mixed use 2 unit with separate utilities on a main street (Kedzie). downstairs commercial storefront, upstairs 2br 1ba apartment. garage in back. built 1949. owned by a family for the last 40 years. we would live in the top floor apartment and my wife's business would rent the first floor from us.
building is listed "as is" and is being sold by owner, a trust made up of the previous owner's 3 children. The place is not without work needing done, but until December it had been rented by a tattoo studio (and a barber shop before that), and had a residential tenant upstairs for years. overall, it seems solid...no glaring deferred maintenance issues, but I am keenly aware of my lack of knowledge and my inexperience, and really trying to keep that in focus as I try to asses what our situation is, and whether we should move forward with it. we would be looking to own the place and hold it, not a flip.
An experienced Chicago realtor friend accompanied us on a walkthrough and has indicated that he thinks it's a good building for what it is. Whatever that's worth.
I took a wealth of photographs and video of the building, trying to highlight all of the suspect parts of the building i could find, trying to be as nit-picky as i could be. Tonight, while researching, and trying to estimate upgrading costs, I became more aware of Chicago building codes and realized again just how much I don't know. I don't mind getting my hands dirty, but it seems like a lot of the main jobs are best left to professionals, legally. Some sections of the water pipes have been replaced with copper, some with PVC, a lot are still galvanized steel. there is plenty of cloth wiring in the building, but at least some of the outlets have modern wiring pulled. there are modern circuit breaker panels for the units, but also there are 3 old fuse type panels, couldn't tell which were energized during our visit.
My primary concern, at this point, is that i don't have confidence that the incidentals of owning this old building will eventually start snowballing, and be an oversize financial burden. I don't have a trusted network of tradesmen to call for quotes. I don't know if our offer, which is slightly below asking price, is still way high based on the real prices of work needing done (Our realtor friend says it's in line with comps, but we haven't had an official inspection done yet). I don't know the specifics that govern rules around mixed use buildings... does the more stringent building code apply to both the residential and commercial space? or is it separate units, separate codes?
Without answers to a lot of these questions, it makes it difficult to have confidence that we are pursuing a deal on solid footing. I buy flip and sell old motorcycles as a hobby, and have had lucrative experiences and i have had bikes that i never should have taken on. those were just $1000 motorcycles, and good learning experiences. I want to be reasonably sure that this property will be a sound investment!
Any resources, references, anecdotes or information that this Chicago forum has to offer would be greatly appreciated. I know everyone here was in my position at one point, just before their first purchase, and I hope my newbie-ness isn't showing too much!! I do believe that life's big decisions ought to give you pause and maybe instill a bit of fear in you, so I am also trying to take that as a cue that I'm not totally lost here!
Thanks!!
(I knew it would be long, thanks for reading!)