Warehouse in a black town? Buerste?

I think one of Jesse Jackson's coalitions came pretty close to Russian style shakedowns.

Reply to
ATP
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What a great looking building. It's not a warehouse though, a warehouse is where stuff is stored, usually temporarily (it comes & goes). A dominant feature of a warehouse is loading docks.

Brick is very good, maintenance wise. The maintenance gotcha to be aware of is the roof - flat roofs leak easily & can be money pits.

I assume that you used "triple net" as a financial term, not as the leasing form. I would not use a triple net lease - I would want to be responsible for them so that I know they're being paid.

"Comparables" are your friends. Both rent-wise and sale wise. What it can rent for is strictly a matter of the market. What is the market? Likewise selling price. But, it doesn't seem likely that the market could be less than 200 - 300k, that is cheap.

7 - 10k insurance HAS to be yearly.

I would think that the management of such a building would be trivial. Occasional maintenance, I would think.

If he's only owned it 2 years, his mortgage has not been paid down very much at all.

Bottom line for me would be my attitude toward the economy. If I saw a healthy economy on the horizon, I'd go for it. If I didn't I wouldn't.

Bob

Reply to
Bob Engelhardt

Is it a "no reserve" auction? I'd be reluctant to compete against local commercial real estate firms. They have a competitive advantage, knowing the local market.

Reply to
ATP

What matters is what you'll have to pay. I'd call some insurance agents, and allow for the rate to go up at least 10% per year.

I'm pessimistic about your chances of keeping the building occupied by paying tenants. As opposed non-paying ones, which are easier than ever to find . :-)

Wayne

Reply to
wmbjkREMOVE

That's OK. It is much worse in Russia.

i
Reply to
Ignoramus20659

Wayne, do you think that it is possibly a question of how much I am asking?

If taxes plus insurance are $40k, and they pay me, say, $70k, which is $1.57 per square foot per year, I will get a very acceptable 15% return on investment. In a couple of years I could renegotiate if the economy picks up.

I would like to know what you think, as you do have a mindset to put reality above preconceived notions.

i
Reply to
Ignoramus20659

When purchasing any industrial property you need to have a enviromental survey done. You dont want to get stuck with a property that has been contaminated and has cleanup costs. Even something like asbestos wraped pipes or insulation can be very costly to clean up. Out side the building is also important since you dont know what was dumped out back, or if there are any underground storage tanks leaking chemicals into the soil or water table. A survey only costs about $2k and the seller should pay for it, but you hire the survey company.

Been there done it, had to pass on a couple of properties because of potential problems.

Best Regards Tom.

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Reply to
azotic

Wow! Where to start? You've gotten a lot of good responses so far. There are some of the things I would consider in addition. Talk to the council person to find out how involved he is in the neighborhood, he can be your best friend or worst enemy. See if there is a neighborhood business association. How's the roof, electric, heat, water, sprinkler system, etc. I wanted a new projection welder and found out from my power company that it would cost me 80k to bring in more KW, I'm at the end of a line. My sprinkler system is on a big 180 psi pump that feeds the entire complex but the underground pipes pop a leak or two every few years at 5k per dig. My nearest big water supply line is two blocks away, the line on my street is

6" and too small to supply any industrial or fire protection use. I have to deal with all types of city licenses for everything but breathing. Does the property have any easements or does it rely on any easements on bordering property? Are there bus stops close by? Are there eateries close? Bars? Banks? Shopping and grocery stores? I AM in a similar situation with 30k' on 2.2 acres. The price seems in line but can you get tenants? How long can you go without tenants or with bad tenants?
Reply to
Buerste

What, in _Chicago_?

No, you ask one group if the others groups are.

BUT, since the last guy hasn't found renters, why would you think you could? He's losing a minimum of $40k on the deal already.

Caveat emptor.

-- 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

Reply to
Larry Jaques

Someone suggested for you to make thumbnails since the pics were so large. After trying to view the first one, I'll concur. It's aking so long to DL the pic I wouldn't want to try to view all of them. It would take an hour...on DSL, no less.

Do you get the Omniturns, Swiss screw machines (?), and other inventory, too? TAKE THE DEAL!

-- 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

Reply to
Larry Jaques

I can go without tenants, paying say 20k in taxes while it is vacant,

7k in taxes and 1k in utilities per year, pretty much indefinitely. I have never been the kind of person to demand top dollar for everything (or to pay top dollar), and, therefore, I would be OK renting out the building to some reputable tenants for a bargain price. i
Reply to
Ignoramus20659

I really wish Iggy would either post them to Picasa..or put in a "next photo" button on the viewing page. Hitting Back every time gets tiresome.

I am the Sword of my Family and the Shield of my Nation. If sent, I will crush everything you have built, burn everything you love, and kill every one of you. (Hebrew quote)

Reply to
Gunner Asch

Can't you right click on the link and chose either 'Open in new window' or 'Open in new tab'?

Reply to
Michael A. Terrell

It looks like it was originally built for a small manufacturer, and only later became a warehouse.

Joe Gwinn

Reply to
Joseph Gwinn

Indeed I could, over and over and over again.

Shrug Iggy is VERY good with computers. A simple "next" button would be a snap for him.

Gunner

I am the Sword of my Family and the Shield of my Nation. If sent, I will crush everything you have built, burn everything you love, and kill every one of you. (Hebrew quote)

Reply to
Gunner Asch

Think of it this way, Iggy. You need a tenant who cannot buy a building on his own, but still has enough money to pay you more money than it would cost to buy his own building.

Reply to
Cross-Slide

Iggy:-

From all of what's been said, personally, I don't think there is too much downside on this deal if you get in closer to the starting price than the asking and can easily afford to carry it for a few years without tenants.

Most likely you will have decent income and a nice capital gain, and will to some extent protect yourself against a further decline in the value of the dollar as the economy improves. The neighborhood looks decent working class-- trimmed lawns, cars in decent shape etc. The size and condition look good to me too.

One factor if you've not been involved with commercial/industrial real estate is that any kinds of repairs etc. seem to cost several times as much as what residential work costs. It's not hard to drop $5K (or $10K or $20K), even on a small building if there's a heating unit failure and/or the parking lot or roof needs work. This can work in your favor if competing properties that are on the market for tenants are not in as good shape.

Good luck, and please let us know what happens!

P.S. I notice the demographics show a rather large surplus of females compared to males (100:87). Is this typical in that sort of place?

Reply to
Spehro Pefhany

You don't want to be distracted by race theories, but in the title of your post, you referred to the place as a "black town" not as a high crime rate area.

Reply to
rangerssuck

OK, good to know, thanks.

Thanks.

Those missing males are in prison.

i
Reply to
Ignoramus5013

But, but, my pictures do have a next button.

i
Reply to
Ignoramus5013

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