.💡 The OpportunityTraditional warehouse leases might rent at $0.80–$1.50 per sq. ft. per month.But when you retrofit a space for server racks, fiber connectivity, and redundant power, those rents can easily jump to $4–$8 per sq. ft. per month — or even more if you lease to edge-compute operators or Web3/AI startups.That’s the kind of industrial arbitrage that could turn a $400k–$800k property into a 6-figure monthly cash flow machine.🔍 Areas to Study Before Jumping InHere’s the roadmap I’m currently following to understand the space better:Power & ZoningTarget properties with 3-phase 480V power and capacity for at least 1–2 MW (utility upgrade optional).Zoning: industrial light/medium (M-1/M-2) or “data processing center” permitted use.Check local grid stability, cooling needs, and climate resilience.ConnectivityFiber access is everything.

After knocking on doors for about a year, I got one of those calls you don’t forget: a seller wanted out of a 10,000 ft² commercial warehouse immediately.

Looking for a warehouse near areas like Paradise Valley or Scottsdale. 

While this is our first venture in flex space, our group has extensive experience in warehouse design and construction.

I then offered to become her financial partner if she would find great deals, we did do a few profitable deals together, including a warehouse property we turned into retail/office/warehouse units.  

These floors handle Rochester's temperature swings, resist water damage, and maintain appearance despite heavy use.

Here in Maine, it routinely gets deep into the negative temperatures in winter, so lack of power/heat/hot water can quickly become a health and safety issue, especially if there are small children/elderly or those with health issues in the building.

When it comes to real estate, here's a general list of eligible assets and their depreciable lifespans that you should know: Residential Rental Property = 27.5 yearsThis includes any building or structure where 80% or more of its gross rental income is from residential units.That means:- Apartment buildings- Single-family rental homes- Duplexes, triplexes, and quadplexes- Mobile homes (used for residential rental)- Any kind of residential lodging facility where the primary purpose is long-term rentalCommercial Property = 39 yearsThis includes non-residential properties like:-Office buildings-Retail stores and shopping centers-Warehouses-Industrial complexes-Hotels and motels that do not qualify as residential rental propertyLand Improvements = 15 yearsThese include sidewalks, roads, fencing, some landscaping, and parking lots that are separate from the building.Personal Property = 5 or 7 yearsPersonal property used in a rental activity usually has a 5 or 7-year life.This includes most furniture, appliances, carpeting and various machinery.Qualified Improvement Property (QIP) = 15 yearsGenerally, this includes any improvements made to the interior of a non-residential building after the building was placed in service, excluding elevators, enlargements, and the internal structural framework.Computers and Related Peripheral Equipment = 5 yearsVehicles = 5 yearsNote that land itself is not depreciable.

The heat would rise and shut off the upstairs thermostat, causing the upstairs bedrooms to get cold.The downstairs unit was a small one-bedroom, and the fireplace would heat the living room to the point where it was concerning from a temperature and CO2 perspective. 

Warehouses, gas stations, etc, in the commercial world usually have the same types of restrictions.