No, I am not suggesting that you turn the building into a parking garage (although if you took your driving test there…?). I am warning you that one of the biggest obstacles that you will face when remodeling these buildings is parking. It is possible that you will have to demonstrate that you have a certain amount of off street parking spots available before you will be issued a permit to remodel apartments or offices. It is also possible that you will have to bring the whole building up to code (rewiring, replumbing, egresses, smoke detectors, fire rated construction $$$). You have to get the building really cheap in order to make a profit, but it can be done. It helps a lot if you have a commercial contractors license. IMHO, always willing to hear of a different angle.
Every small town’s downtown business area has them: two or three story commerical buildings with the second and above stories vacant. Yes, some of them are used for storage by the business owner whose shop is on the street level and some of them are low rate sheeping rooms or apartments. However, the vast majority of those floors which, at one time in past, were offices used by doctors, insurance agencies, real estate agencies, etc. are now gathering dust and falling in disrepair.
I even took my driving license test in an office in one building and got my social security number in another building and they both were on the second floor of these buildings but now have been vacant for over 30 years.
Often, when I go through these small towns and seeing those vacant upstairs windows, I think that there got to be a way to make money on those vacant floors as a real estate investment.
So, I come to you, fellow investors, for some creative ideas on how to turn those vacant floors into income producing opportunities. Ideas, which you might be able to use in your own small towns.
Thank you, in advance, for your ideas or comments.
Re: Need your creative ideas on a potential real estate opportunity! - Posted by Glen (NY)
Posted by Glen (NY) on April 17, 2000 at 19:58:44:
These buildings were typically constructed before the widespread use of fire-spread codes in buildings, and are often constructed with wood frame structures. Converting them to some forms of mixed use (i.e: restaurant on the first floor and apartments on the second) is not allowed under most of the current model building codes. Even if the mixed use is allowed, you are still required to bring them up to current codes in most jurisdictions, which will require 1-hour (or 2-hour in some cases) fire ratings on all separations between tenancies. That is why many of these buildings remain vacant except for the first floor.
The other issue that comes up is related to accessibility. Don’t know about other states, but here in NY you are required to provide handicap accessibility if the renovation costs are greater than 50% of the value of the structure. If you are talking about creating a medical office, accessibility is required in all cases. Can you spell elevator? It’s spelled $$$$$$ (usually 4 zeros before the decimal point).
Unfortunately, most property owners are stymied when they see the requirements on the older wood frame structures. As a result, there are a lot of very nice historic buildings that are not getting full use. I have seen this and have been involved in proposals for several of the local 2-story buildings in my town which have been successful, but at a large cost.
As an investor, I think the up front costs would be high, which might make it prohibitive.
