Updated 2 days ago on . Most recent reply
Convenience store turned 4 unit
I had an off market property brought to me.
It’s a very odd configuration, because it’s an old convenience store turned 4 unit, one 1/1 + three 2/1 apartments. My main question is should I just stay away from it because it is so unconventional or take a chance because it’s better than most deals I can find in my small town area. I’m worried about code violations/potential problems that come with whoever converted a commercial retail building into apartments and the possible cut corners that come with that.
In total it’s 5 units on the land, country area setting, 620 sq ft. 1/1 Mobile home on a lake and the 4 units in the converted convenience store that vary from 600-900 sq ft. I am going to walk the property soon to get a better idea of measurements and layout. Gross rent from these 5 units is $3650/mo. Owner pays Electric, water, mowing, and trash. Along with all other expenses is $1400/mo. Asking price is around $300k. No seller finance. I can get a loan and keep it to myself or route 2 would be a cash deal with a partner.
I think rents are low for it being all bills paid, but in its current condition I don’t think I could raise rents without some renovations. The mobile home could easily be increased in rent by $200/mo sight unseen and probably more.
The mobile home has all its own utilities and would only take minor repairs.
The other building has 3 units metered together for everything and oddly shares water heaters and HVAC (temp is the same in all those units). Only 2 units and the mobile home have laundry hookups. 4 unit building has old VCT office flooring and odd floor plans.
My plan would be to install all new flooring, paint, install mini splits, and laundry hookups for each individual units and swap out the community water heater with a tankless system or maybe individual water heaters. I estimate this would cost around $25-35k total
After renovations I believe gross rents would be between $4300-4800/mo between all 5 units.
Am I crazy for considering this? 😂