Warehouse in a black town? Buerste?

Forgot to add. This is a sealed bid sale.

The building is owned by an "investor". This "investor" bought it in

2008. I looked up some online stuff on the Cook County recorder of deeds website. It was bought from MB Financial and all I know is that there is currently a 238,000 mortgage on it. So if I, say, bid $205k it would be even below the mortgage. I realize that the possibility of such a low bid (which is still hypothetical, I did not yet bid), is low, but that's how I operate, I submit low bids.

I talked to this investor. He told me that he was getting $15k/month in rent. However, the company went bankrupt a year ago and so he only received that amount for a year. And this is if I was to believe his number. I am not sure if I would believe it, as it sounds a bit good to be true wrt the price that is being asked.

If I can get, say, $2 per square foot per yeat triple net, then it would amount to $40k/year, which is almost 20% return. That seems pretty doable.

But I have no experience dealing with problems such as breaking etc.

i

Wow, cheap!

What a mindset!

Ask some Dalton residents, Chamber of Commerce, area business owners, and police all those questions, Ig.

-- Not merely an absence of noise, Real Silence begins when a reasonable being withdraws from the noise in order to find peace and order in his inner sanctuary. -- Peter Minard

I'd guess the biggest issue is finding and keeping a good tenant. How's the state of small manufacturing in that area, picking up or declining? Other people that use warehouses typically service industry, so unless the manufacturing economy is expanding there....

Pete Keillor

Tax and insurance load would be my big concern. If you are looking to do this without a mortgage, then at least that's one less expense to worry about when the building is vacant. You'd still have taxes, insurance, utilities and maintenance to take care of when the building is vacant, so it's important to know what your worst case monthly expenses will be while trying to find a tenant. You should also investigate the costs of having a professional commercial property management company manage it for you. The cost of such management cuts into your profits, but a decent management company can go a long way towards keeping the building occupied and avoiding some problems.

As for the neighborhood, the racial makeup of the area is far less important than the character makeup of the area. If it is an area where people maintain their property, and particularly an area with mostly single family houses that are reasonably maintained, it's likely a good area.

What do you figure, section off 4k sq. ft. for your own use and lease the other 15k?

I want to mak eit abundantly clear that I consider buying it for the purposes of renting out.

i

Yes, I would call the police and ask they if they are corrupt.

i

I agree.

It is a good question, if it is like in the rest of Illinois, it is neither declining nor expanding. Manufacturing is all kinds of things. For example, making dog food or peat moss is manufacturing.

i

Definitely without a mortgage.

Taxes are 31k per year, but supposedly were just reduced due to unoccupies status. The owner will send me some paperwork today.

That would be good if that would free up my time.

Yes, it did seem to be this way, maintained single family homes. Not mansions to be sure, but painted, clean, streets not full of garbage etc.

I might do that, the building does have two sections. It is kind of far from me to use on a regular basis (50-60 minutes drive).

i

A 120,000 square foot building with about 20 acres sold for $1,000,000 near here a couple years ago. Fully air conditioned with 1/3 office space, and the rest manufacturing / warehouse space.

Where is "here?"

Don't forget insurance. The commercial insurance you will need (and plenty of it) is *not* cheap.

That's a pretty routine trip for me, I'm about from Dallas. I do try to organize my trips so I get a number of things accomplished each time I go down, but it's not a big deal.

Another thing to check carefully but before purchase as well as with prospective tenants is environmental. You don't want to buy a Superfund site, or even something that will require smaller remediation as even tiny remediation is $$$$.

The owner says that his 2008 environmental report is clean. Village of Dolton does not have anything disparaging. The place looks relatively clean.

i

That's good, but don't forget to check on insurance, you may find premiums are a lot higher than you might think. And you certainly don't want to get into this without proper insurance, particularly commercial liability.

If you don't already have one, you should also be looking for a "PLUP" personal liability umbrella policy, those are pretty inexpensive and can be very helpful.

:

The mortgage amount would be the initial amount, not current amount. Also there may be other secondary mortgages and credit lines on the property that are recoded elsewhere or not recorded at all. In otherwords, the property may have been pledged as collateral for some other purposes. You would want to not be responsible for those. A lawyer will help avoid such problems.

Don't just drive around the area, stop and get out of the car and talk to the neighbors. Find out who has used the building in the past. Are there any possible environmental or contamination problems. As soon as you buy the property, you become the responsible party. Talk to another commercial realtor, not the one with the listing, and see if they are familiar with the property. Telephone the local power company and see what power is available to the building. voltage and KVA and what the range of electrical bills have been in the past. Talk to the local fire inspector. Have there been any calls to the neighborhood?

Walk through and around the property with the listing agent. Look for closest fire hydrant. Does the building have sprinklers? Ask the agent about current insurance on the building and can he recommend a commercial insurance agent. Go talk to the agent and get a ball park figure for commercial insurance both as a user/owner and as an owner who leases out the building to a single tenant, or multiple tenants.

Can the building be partitioned off into smaller suites? What would that cost? What about parking and loading ramps? What loading can the floor hold? If concrete, is it cracked and broken? Can you see any roof problems? Any sign of water/wind damage to roof? Can blowing snow get into the building? Are there office spaces? Restrooms? How many of each? How does the outside look? Is the outside painted? If so, does it need to be repainted? What kind/size of signs can be placed on the property? Are there any signs there now and will the owner remove them?

What size/loading can the streets carry for truck traffic? How close to major highways? Can trucks easily get to/from the property? What landscaping is on the property. Cost to maintain?

Then there are property taxes. How much are they and are they current?

Then there is the cash flow question. Will you have to reduce the rent in order to get renters? Most of your renters will be brought in based on price only? Can you afford to "buy" renters to keep the cash flow going?

There, there is a start.

Good luck, Paul

And the problem with that is that most good tenants are looking for bargains like this building.

I'd buy something comparable in a second for my business in a second.

How much 3-phase power?

Right

I agree.

800A, 240V, 3 phase, I looked at the inside of the fuse box myself.

It does not look like this building had a fire.

I am trying to find out.

It could be partitioned into roughtly 14k and 5k square feet.

No idea but it is already partitioned.

about 20 car parking, ground level and semi loading ramp for two semis.

Good condition

no

no

yes

90% brick.

no but it is brick

no

I could probably place a FUCK QURAN sign, not sure about the rest

Hopefully they will remove the forsale sign

OK for semis

2-4 minutes

yes

Overgrown trees and bushes in the back.

Should be cheap

30k. The owner told me they got a reduction, I asked him for specific amount and he is strangely quiet (sorry, I have to be paranoid).

I would say if I get 50k triple net, I will be more than happy. That is $2.5 per square foot per year NNN.

i

800A, 3 phase, 240v. Pretty beefy cables, I did look inside the main electrical fuse box. i

I cannot get that amount out of the owner, it seems.

I have something like that, yes.

i