All Forum Posts by: David Sisson

I have an opportunity to get a large (8,000 SF) commercial building for free. This building is historic, and would come with restrictions. It's also in very rough condition, with an estimate of $1M plus in order to get it functional. Best use is probably apartments, and would be 5 to 8 units, depending on the amount of $ I sunk into it. I don't think it's worth $1M, I'm getting more like $500K - $600K as an ARV.

Opinions: is it worth it to get the building? Please note that "get it for free and sell it" isn't an option. This is "get it for free and fix it up-required" deal. 

I'm thinking "get it for free, then figure out how to get it fixed for $500k or less". Please note that I'm an architect and a general contractor, so I'd have some savings on those fronts. The building needs pretty much everything, including foundation repair, new roof, structural repair, new plumbing, heating, electrical, etc. It's a mess. 

What are you trying to achieve here? Lower prices from the contractors? I think if you received 2 similar bids, and one high bid, it'd tell me that you have 2 good prices and one guy is so busy that he can ask for double and sometimes get it. 

If you are trying to build a team that you can use over and over, it doesn't do you any good to bang the guys down as low as possible on price. They'll go out of business, then you'll need to start over on building your team. You might also search Bigger Pockets to learn about low bidder contractor horror stories. 

I generally don't tell contractors what our budget is. When they ask I say "you are going to tell us what the price is". During construction, we try to keep lines of communication open and honest. Prebid I also try hard to make sure the contractor knows the scope of work, and knows anything challenging or difficult. Doesn't help anyone to hear "oh, I didn't know that" during construction. 

Parking will be the big issue. That's a small lot. You might have 60 or 70 feet of height, but how many square feet of lot area do they require? Setbacks, lot coverage, FAR, and maybe other issues all contribute to what can be done on a lot. 

Step 1: review your local zoning ordinance and see what it allows. Decide if your lot works, or is close to working. (you can always try for a variance).

Step 2: contact me for a Seattle architect referral. I have a good friend out there who's an expert in these zoning challenges and also does nice looking work. 

Well, I don't flip homes myself, but we do some work for home flippers and other investors. I'm not going to share any stories about the worst, but I can answer your question, sort of. 

Yes, you can fix anything. This might mean tearing the whole thing down and rebuilding it, but it can be done, with enough money. 

Hopefully, your home isn't that bad. The 2 things you need to be looking for are 1) Water damage and 2) foundation damage, with foundation damage being the worse of the two. (and 3) insect damage) (and 4) fire damage)

Water (or insect, or fire) damage usually means rotted wood. This can always be removed and replaced. You'll probably be replacing the entire plumbing and electrical system anyway, and all the windows. You'll probably have lead paint, possibly have asbestos. (This is common on all older homes, not just abandoned ones). 

"Walls falling down" sounds pretty bad. Which walls? Why? Do you mean plaster coming off the walls (normal on an old abandoned home) or do you mean the entire wall? Is it an exterior wall (BAD) or an interior wall (probably also BAD). Loadbearing or ? 

It'll be a gut renovation. If the home has a decent structure (IE: the structural wood) then you're probably OK. If you have extensive rot, insects, fire damage to the structure, then beware. Honestly, I'd be nervous paying more than what the land is worth, because you might have a very expensive repair project. 

Put washer/dryer connections in one corner. Do a "laundry box" for the drain and water, and put the through wall vent for the dryer. Then, they can either install their own STACK APARTMENT STYLE washer/dryer, or use it as an office, or BOTH. If you want to make it fancy, put the washer/dryer connections in a small closet in the corner. Then, offer to rent them a washer/dryer for $15 or $20 a month. 

I find in these situations to:

1) Not lose your head. Listen to them calmly, and try to learn what their real concerns are. Sometimes you'll find that they are willing to work with you, if you make just one small issue go away. 

2) Be reasonable about things you can be reasonable about, but hold your ground about things you must hold your ground about.

3) See if it's a technical issue that your engineer can resolve with a different design, or maybe your engineer can better explain to them why they design will work. 

4) Explain to them that you are improving the design of the septic system, on your own dime, and you are kindly requesting their assistance to complete the project. 

I don't know much about septic design, but it seems that systems for 3 bedrooms are often designed to handle 4 bedrooms worth of flow, to be on the safe side. Maybe the engineer can resize, and better demonstrate the calculations  / how it works. 

I'd also be curious what their concerns are. Too small of a system? Too close to other properties? Too close to ?? Undersized system? 

Can the system be designed in a creative way? I have some friends who do septic design, they tell me that there's multiple ways of doing it, so maybe you need another engineer, or this one needs to just rework it. 

So, that's a difficult question. We do this, and the process is something like:

1) Regardless of anything, your situation and process will be different than what I describe, because every property and community is unique.

2) You need to check your zoning. Is a 2 family allowed in the zone? If not, then you probably won't get it done.

3) Then, do you meet all the other zoning requirements to have a 2 family? This might include lot area, set backs, height, parking, FAR, and many other issues. If you meet most of these, but are deficient in some, then you'll need a variance.

4) You might also need a special permit

5) You'll possibly need architectural drawings

6) You'll definitely need a class 1 survey. 

7) Then, you go through the process. It takes time and money.

8) Go to the city, and talk to these departments, and maybe more:

Planning, Zoning, Building Dept, Fire Dept, Engineering Dept. 

Ask them if it's possible, and if yes, what's the process, and if no, what's the process. 

To answer your question: yes, there's a lot of red tape.

9) Then build the thing. This includes: Fire rated ceilings or walls, smoke detectors, co detectors, fire rated doors, separate electrical and heating systems, and probably some reconfiguration of the interior. 

Good luck! 

I'm an architect and people sometimes are shocked at the price "it's just drawings". Well, if it's just drawings, I do it all day long and I need to eat too. "Make over 100K a year" but you also need to buy 40K of materials and pay 50K of wages and overhead. I don't envy contractors, it's a tough business. 

$105 would be amazing. Your local zoning requirements will dictate what size lot you'd need, not to mention what zone you'd need for a 4 unit. You'll need to get very familiar with your local zoning ordinance and zoning map if you want to find the right lots for this type of development. 

Absolutely. The $175 does not include soft costs and/or professional costs.