Help Me Think Through My Investment Property in Central Mass
Hey all,
Looking for some advice or creative solutions from those who’ve been in similar shoes.
For my first project, I bought a mixed-use property in central MA about a year ago for $70K. It's on a small 2,500 sqft lot and currently has a commercial storefront on the first floor and one apartment that spans the second and third floors. The plan was to rebuild: keep the storefront on the first floor and add one 2-bedroom apartment each on floors 2 and 3.
Here’s where things went sideways:
- The property has been vacant for over 2 years, which means if I demolish the current structure, I lose my grandfathered zoning rights and will have to rebuild under the new code.
- After speaking with my structural engineer, the foundation is shot and can’t handle the load for a rehab — so the only feasible path is full demolition and new construction.
- Estimated rebuild cost is ~$650,000, and I’m already in for $70K on the land. So I’d be all in at $720,000, while comps suggest the new building would be worth only around $550,000.
- A bank won't finance the full project since the after-repair value (ARV) doesn't justify the cost. Best case, I'd have to bring $300K+ of my own cash, and I honestly think I’d be better off using that money on another property that actually cash flows from day one.
So that brings me to where I’m stuck:
- Do I cut my losses and try to sell the lot/building as-is?
- I would love to make this work but with the current plans of 1 store and 2 apartments, it looks difficult. What else can I do? What would you do?
- Anyone else go through something similar — any lessons you can share?
This project has been a massive learning experience already — I’ll consider it an MBA if I walk away — but I want to make the smartest next step from here.
Appreciate any thoughts, connections, or ideas you all might have.