Offer Accepted. Zoning twist.
Hello BP Community!
Here is a deal that I currently have an accepted offer on. There are a few new twists and was hoping to could help give me input on what you would do.
House:
- 3985 sqft 6 bed 5 full bath
- A beautiful 1000+ sqft open studio with bedroom and full bath attached which is part of the overall sqft. This space is currently being used a salon. It has its own gas, AC and electric utilities.
- The rest of the house is a 2 family 3 bed 2 bath for each floor
- B-/B neighborhood
Numbers: here is the report that I ran through BP rental calculator. I ran the rents to see the numbers following the seasoning period. For the first 6-12 months the cash on cash return will be current- $1600.
** HERE IS THE TWIST**
- Because the studio has its own utilities, bedroom and full bath I obviously was going to turn it into it's own beautiful unit renting at 1000+/month. However, due to the house being zoned in an agricultural area it can only be a legal 2 family with a "storefront" as it currently is as a salon, yoga studio, massage, etc.
- Therefore I ran below market #'s for commercial space.
- I'm just wondering what some of you might do. The #'s still work nicely however I have never tried to rent commercial space and am worried that it will sit vacant for a while. It is currently a turn key salon and might rent right away and could always be turned into any other type of studio.
- I am currently trying to apply for a variance on the property but know that those do not usually go so well.
- Even if the commercial space sits vacant the property will still cash flow a little but not my current numbers. I'm trying to leave emotion out of it and rely on good deals only.
Thanks for the help! Let me know if any other info should be provided!
- Brett