In Over My Head?
I am a first time home buyer and I’m looking at a building with two units and a storefront for sale at the same price as my budget for a condo. The building is completely gutted – no plumbing no electricty, and it needs a new roof. Does anyone have an idea how much plumbing…
I am a first time home buyer and I’m looking at a building with two units and a storefront for sale at the same price as my budget for a condo. The building is completely gutted – no plumbing no electricty, and it needs a new roof. Does anyone have an idea how much plumbing costs for a three story building? And electricity? I have a lot of building experience so I would like to do as much of the non-plumbing and electricity work as possible. Am I in over my head? Has anyone done a project like this? What kind of advice can you give me?
Posts like this make me consider buying one and putting my firm on the ground floor while making a duplex above. Where is this one? Don’t worry, I won’t put in an offer unless you tell me you don’t want it 😉
Jim Hill, RA LEED AP
Urban Pioneering Architecture
Oh, sounds to me like the answer to your question “Am I getting in over my head” is a resounding Yes!
$800k for three apartments? The doorknobs and fixtures better be solid gold.
We just completed restoration of a three-family townhouse (including new plumbing, roof, electric, windows, new kitchens and baths, masonry work, structural repairs, new hardwood floors, tin ceilings, etc) for around $200k.
You need all cash. And if you were to get a 203K loan (I don’t think they’re available for a commercial building anyway) you would not be allowed to do any work yourself.
I’m looking at buildings with commercial spave in Philadelphia right now. I’m concerned that if there is not an existing tenant, it could be quite some time before the economy strengthens and someone wants to open a new business.
I agree with previous posters on costs.
You should also consider what types of commercial businesses you would or wouldn’t want as tenants, not to mention what types of businesses would do well in that location.
A business serving food would have very different plumbing/electrical/venting needs then a basic retail store or prof. office. So you could save some money by limiting the finishing work on the ground floor, hoping the commercial tenant will pay for custom finishing.
Best advice: “You need cash and lot’s of it.” It will be impossible to finance construction unless you can buy the building outright. Even then, it’s still not easy these days. The banks are now reviewing all loan applications with a microscope. It’s not like it was only a few short years ago.
What is the size of the building? What are conditions of the joists, etc? If you can ask for pricing without giving important information I would suggest you pass on this project.
I just purchased a long-neglected shell on 5th Ave in Park Slope. As a builder it will cost me just over $800K to build three one-bedroom apartments over an unfinished retail space. This is my actual net cost including plans, fees, etc.
This is with ultra-quality inside and out, so you can deduct for regular finishes and for what passes for workmanship today. But still, those prices above are a joke. It will cost you much, much more to get to the finished product. The only accurate cost information you can expect is when you add up all the bills when the project is done.
it’s going to be near impossible to get a loan on a mixed use building that is gutted. You need cash and lot’s of it.