Ok, I am sitting on some cash from a recent deal that I did, and I am thinking about purchasing a 5800 sq ft residential/commercial studio space on the first floor of a building downtown. To my knowledge, part of the building is small studio condos, part office, part retail/store front. I would basically be purchasing the 1st floor. My thoughts are that I could live in the studio area (in the state that it is in) and then either rent the retail/office space out OR have renovations done and turn the entire floor into apartments/condos. If I was to turn it into apartments/condos. I would try to rent the condo that is already on the floor and live in the 2nd one (if their is a 2nd one) and then turn the rest of the building into condos as I go.. basically start work on one, finish it.. rent it out and then start work on another one until the floor is completely residential.
I have not seen the property as of yet, but I will be seeing it within the next few days. The property is on the market for 300K (at 5800 sq ft) and it is located in the heart of downtown. I am not sure how the areas(studio/retail/office) areas are allocated as far as the floor plan goes.
Ok, I have 86K in cash, 45K in a 401K and access to some expensive peer to peer loans(up to around 25-30K with high interest rates). My question is, being that I have only dealt with residential property and I haven't dealt in commerical/residential in a downtown area and I'm dealing with such a small amount of capital are there any costs that I should think about that I wouldn't have seen with a residential property? Also, how do I get a bank to fund the rest (of the 300K) if my work income is under 100K a year. I am very creative with making my finances work, but I would like you guys' thoughts on this being that many of you are seasoned veterans. Also, I have purchased properties in the past that needed work and made a profit. I am fairly new to this, but I have not lost money yet and I am willing to take a certain level of calculated risk if it makes sense. I know that this may not be a good idea, but that's why I am here, to get your input. Also, I am willing to get my hands dirty literally and figuratively. I am a fairly handy guy myself, but I know that I will possibly need a contractor to do much of this level of renovation.
Thanks for your time and expertise.
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