I just bought a piece of property that is commercial.
It has a house on it that was built in 1900 and will likely need to be rehabbed Down to the studs. Any advice on how construction loans work and what the rates are? I want the spot to be a beer/wine bar.
Plus this is my first venture into anything like this. I don’t know any contractors.
I have a lot of questions. And would love some experienced person to chat with
Before you convert a structure from one use (former house) to a new commercial space (beer/wine bar), make sure that you have thoroughly reviewed your local zoning requirements and met with the city permitting office. We have about (6) six different types of commercial zoning classes where I live and only (2) two of them would allow a the construction of lounge/bar. If you have to go through a rezoning, this can be real process that is thwart with massive amounts of risk/potential roadblocks. If you need to go through that process, it is good to talk to a real estate attorney right away and your local permitting office to get a understanding of the prerequisites, costs, and timelines for such an endeavor.
Regardless of the zoning, you will need financing either private capital or bank/hard money/creative financing. It is a little bit different for commercial but from what I have heard, at a minimum, you will need a pro-forma (financial projection) and schematic design or rendering to point to. Since you have never done this before, you might want to consider taking on a partner because there are a lot of steps doing a development like this. Not to scare you but getting financing is just the beginning and there are many other challenges in development. Unless you have lots of time, patience, and a good amount of cash reserves of course. Here are some steps to name a few: survey, plats, checking existing utilities/upgrading service, easements, right-of-way improvements, Phase-1 Environmental Assessment (HazMat), demo permit, demo, design structure, plan check, submit for building permit, solicit contractor bids, etc.
When you go to hire a contractor, make them provide you with a detailed Schedule of Values breakdown to show you what they have assumed in their bid for a specific line item. That way you can compare all bids against each other. Make sure that your bids are due at the same exact time so that contractors don't think you are shopping their bids. Also if you don't have a list of contractors already, you can post your scope of work, drawings, and specifications on a local plan room to open it up to the world to bid.
I don't know if I helped you or scared you but either way, preparation is key. Keep asking questions along the way and you will make it through. Just remember the (3) C's on your first development... Contingency, Contingency, Contingency... Don't get caught without enough capital.
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