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#1
Posted to rec.crafts.metalworking
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How to buy a warehouse
I keep hearing that commercial real estate is in bad shape. At the
same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. |
#2
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How to buy a warehouse
On Mar 28, 9:16*pm, Ignoramus8246
wrote: I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. I always like the "driveabout" approach, You know your area better than anyone...get in the car and drive around looking for "For Sale" signs in the industrial sections near you. The logic being that you want it close for convenience and so you can keep an eye on your investment. Then follow up on the signs. You can also stop by your local bank/realtor...and ask them about the local commercial real estate. Did you buy your house through a realtor....yet another network source. Are you sure you want to be a landlord..it comes with its share of headaches. TMT |
#3
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How to buy a warehouse
On Sun, 28 Mar 2010 21:16:44 -0500, the infamous Ignoramus8246
scrawled the following: I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. Go talk with a REA, Ig. They can tell you what's out there and who's ready to sell cheap right now. Something close to you so you can check on it frequently, right? Warehouses near airports are always full...in good times. You might find a really nice place in these economic times. You might also find a small place for your own stuff, so you don't have to fill up your garage and driveway, eh? Let us know what you find. -- Everything I did in my life that was worthwhile I caught hell for. -- Earl Warren |
#4
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How to buy a warehouse
On 2010-03-29, Larry Jaques wrote:
On Sun, 28 Mar 2010 21:16:44 -0500, the infamous Ignoramus8246 scrawled the following: I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. Go talk with a REA, Ig. They can tell you what's out there and who's ready to sell cheap right now. Something close to you so you can check on it frequently, right? Warehouses near airports are always full...in good times. You might find a really nice place in these economic times. You might also find a small place for your own stuff, so you don't have to fill up your garage and driveway, eh? I will start earnestly looking. I did look a bit on loopnet and it seems that there are some affordable deals. With a bit of looking I may be able to find some kind of a buyout deal, where I buy a warehouse with machinery and sell it off in two months, or something like that, to help pay my costs. i |
#5
Posted to rec.crafts.metalworking
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How to buy a warehouse
Ignoramus8246 wrote:
I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. Like any other business, this one requires training and experience. Spend a year talking to people Ig. I'm also a little surprised, given the following: With the Fed Funds rate at zero bonds have only one future and it ain't pretty. With the tremendous distress and ongoing deleveraging in the bond market it still isn't certain what any financial services business ir really worth these days. With the upcoming need to refinance a HUGE notional value in corporate high yield bonds begining in 2011, there might just be a shortage ( and therefore interest rate run up ) of funding for debt. That you are thinking about an investment that isn't remotely liquid. The secondary and even primary, credit markets, aren't so far from trouble that a little frost might set in and then freeze solid in a big hurry. There is also a good chance that equities in anything that looks like KKR or what that bunch has been leveraging might go right to hell without much notice. What can they do besides have a fire sale if they can't roll over their bridges? You are truly a brave fellow! -- John R. Carroll |
#6
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How to buy a warehouse
Ignoramus8246 wrote:
I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. The first thing to do is to watch the classified and see what is available and check the prices of rents on commercial real estate. Also see what is selling and prices. Also find a commercial real estate salesperson and pick his brain. I would be very cautious in getting into a large commercial building. If it stands empty for any time the taxes are likely to eat you up. John |
#7
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How to buy a warehouse
On 2010-03-29, John R. Carroll wrote:
Ignoramus8246 wrote: I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% .... I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. Like any other business, this one requires training and experience. Spend a year talking to people Ig. Good idea. I do not expect to find a super great deal, given my level of expertise, just something where I would not be screwed and where I do not overpay too much. I'm also a little surprised, given the following: With the Fed Funds rate at zero bonds have only one future and it ain't pretty. With the tremendous distress and ongoing deleveraging in the bond market it still isn't certain what any financial services business ir really worth these days. With the upcoming need to refinance a HUGE notional value in corporate high yield bonds begining in 2011, there might just be a shortage ( and therefore interest rate run up ) of funding for debt. That you are thinking about an investment that isn't remotely liquid. Um, I do not see the contradiction. I did not post a message here saying "I would like to invest in a 30 year bond". I want to buy a warehouse, not a long bond. I was planning to put up 50-60% in cash and if I can find a loan at affordable fixed rates (I never take out other kinds of loans), finance 40-50% of the purchase. If I cannot find such a loan, I wuold just buy something smaller. This is all assuming that normalized rents would give sufficient return on caiptal to make this worthwhile. If, say, I buy a warehouse, and rates go up, that may indirectly help me in the longer run, as higher rates would force higher returns on assets and thus higher rental rates. (though I would also anticipate a minor reduction of economic activity). The best time to invest, generally, has been when fear was the mani public emotion. Investing when everyone feels optimistic and giddy, as we know by now, does not lead to great results. I had close to 100% of my money in stocks by March of 90 for that same reason. I was a little bit early to the party, having started puttnig cash to work in November, but in the end it worked out. Same here. If rates rise, our government has trouble paying its bills, etc, that does not directly result in people not needing warehouse space. The secondary and even primary, credit markets, aren't so far from trouble that a little frost might set in and then freeze solid in a big hurry. There is also a good chance that equities in anything that looks like KKR or what that bunch has been leveraging might go right to hell without much notice. What can they do besides have a fire sale if they can't roll over their bridges? You are truly a brave fellow! There are many ways to lose money. One way is by becoming financially overextended and then hitting a "snag". Another way is to have money in cash and lose due to inflation. Yet another is pay too much for assets due to public optimism, compared to their true income producing ability. What I am getting at, is that even not investing has its own risks, as does investing where such troublesome things as you outlined, are not anticipated. Consider current Greek troubles. I hear that Greeksw stocks are down. Imagine a Greek company that sells chewing gum to Greeks and enjoys substantial market power. Question: how much does the default of Greek government, impact the earning power of that company? The answer is, of course, not by much. I am not really concerned about the possibilities that you mentioned, if I can buy warehouse space at a price that allows good return from good renters. i |
#8
Posted to rec.crafts.metalworking
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How to buy a warehouse
On 2010-03-29, John wrote:
The first thing to do is to watch the classified and see what is available and check the prices of rents on commercial real estate. Also see what is selling and prices. Also find a commercial real estate salesperson and pick his brain. I would be very cautious in getting into a large commercial building. If it stands empty for any time the taxes are likely to eat you up. I was thinking about something like 4k square feet, two bay doors or something like that. Not a big building 90% financed via leverage. i |
#9
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How to buy a warehouse
"Ignoramus8246" wrote in message ... On 2010-03-29, Larry Jaques wrote: On Sun, 28 Mar 2010 21:16:44 -0500, the infamous Ignoramus8246 scrawled the following: I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. Go talk with a REA, Ig. They can tell you what's out there and who's ready to sell cheap right now. Something close to you so you can check on it frequently, right? Warehouses near airports are always full...in good times. You might find a really nice place in these economic times. You might also find a small place for your own stuff, so you don't have to fill up your garage and driveway, eh? I will start earnestly looking. I did look a bit on loopnet and it seems that there are some affordable deals. With a bit of looking I may be able to find some kind of a buyout deal, where I buy a warehouse with machinery and sell it off in two months, or something like that, to help pay my costs. i It's a soft market, ig. Who are you going to sell the machinery to if places are going out of business, and there is a glut for equipment? You could get into a storage situation with a lot of inventory, but not a lot going out the shipping dock. I know that you are moving stuff right now, but you don't have the big nut you would have in a building, where the first $XXXXX a month that comes in is already promised. Why don't you do this? Start on a small scale, and see how it works. If it doesn't, you don't have a large warehouse and a lot of equipment, sitting there like a horse that just eats. Steve |
#10
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How to buy a warehouse
On 2010-03-29, Ignoramus8246 wrote:
On 2010-03-29, John R. Carroll wrote: Ignoramus8246 wrote: I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% ... I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. Like any other business, this one requires training and experience. Spend a year talking to people Ig. Good idea. I do not expect to find a super great deal, given my level of expertise, just something where I would not be screwed and where I do not overpay too much. I'm also a little surprised, given the following: With the Fed Funds rate at zero bonds have only one future and it ain't pretty. With the tremendous distress and ongoing deleveraging in the bond market it still isn't certain what any financial services business ir really worth these days. With the upcoming need to refinance a HUGE notional value in corporate high yield bonds begining in 2011, there might just be a shortage ( and therefore interest rate run up ) of funding for debt. That you are thinking about an investment that isn't remotely liquid. Um, I do not see the contradiction. I did not post a message here saying "I would like to invest in a 30 year bond". I want to buy a warehouse, not a long bond. I was planning to put up 50-60% in cash and if I can find a loan at affordable fixed rates (I never take out other kinds of loans), finance 40-50% of the purchase. If I cannot find such a loan, I wuold just buy something smaller. This is all assuming that normalized rents would give sufficient return on caiptal to make this worthwhile. If, say, I buy a warehouse, and rates go up, that may indirectly help me in the longer run, as higher rates would force higher returns on assets and thus higher rental rates. (though I would also anticipate a minor reduction of economic activity). The best time to invest, generally, has been when fear was the mani public emotion. Investing when everyone feels optimistic and giddy, as we know by now, does not lead to great results. I had close to 100% of my money in stocks by March of 90 for that same reason. I was a little I mean March 09 i |
#11
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How to buy a warehouse
On 2010-03-29, Steve B wrote:
"Ignoramus8246" wrote in message ... On 2010-03-29, Larry Jaques wrote: On Sun, 28 Mar 2010 21:16:44 -0500, the infamous Ignoramus8246 scrawled the following: I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. Go talk with a REA, Ig. They can tell you what's out there and who's ready to sell cheap right now. Something close to you so you can check on it frequently, right? Warehouses near airports are always full...in good times. You might find a really nice place in these economic times. You might also find a small place for your own stuff, so you don't have to fill up your garage and driveway, eh? I will start earnestly looking. I did look a bit on loopnet and it seems that there are some affordable deals. With a bit of looking I may be able to find some kind of a buyout deal, where I buy a warehouse with machinery and sell it off in two months, or something like that, to help pay my costs. i It's a soft market, ig. Who are you going to sell the machinery to if places are going out of business, and there is a glut for equipment? You could get into a storage situation with a lot of inventory, but not a lot going out the shipping dock. I know that you are moving stuff right now, but you don't have the big nut you would have in a building, where the first $XXXXX a month that comes in is already promised. Why don't you do this? Start on a small scale, and see how it works. If it doesn't, you don't have a large warehouse and a lot of equipment, sitting there like a horse that just eats. Steve, most machinery sells very easily, if one does not demand pre-2008 prices. I was not considering buying anything that I could not afford without big pain. i |
#12
Posted to rec.crafts.metalworking
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How to buy a warehouse
Ignoramus8246 wrote:
On 2010-03-29, John R. Carroll wrote: Ignoramus8246 wrote: I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% ... There are many ways to lose money. One way is by becoming financially overextended and then hitting a "snag". Another way is to have money in cash and lose due to inflation. Yet another is pay too much for assets due to public optimism, compared to their true income producing ability. What I am getting at, is that even not investing has its own risks, as does investing where such troublesome things as you outlined, are not anticipated. Consider current Greek troubles. I hear that Greeksw stocks are down. Imagine a Greek company that sells chewing gum to Greeks and enjoys substantial market power. Question: how much does the default of Greek government, impact the earning power of that company? The answer is, of course, not by much. I am not really concerned about the possibilities that you mentioned, if I can buy warehouse space at a price that allows good return from good renters. You make good points but I guess what I was trying to say goes to your last comment. It's straightforward to adjust rents when you aren't leveraged. Otherwise, you are dependent on renters and rents. Those two might be adversly impacted. I'm becoming increasingly convinced that this is the case and just went back and reread a short volume about these markets that Ed Gramlich wrote shortly before his death to refresh my understanding. One example is that there is considerable supply side support in the US for rental properties. Everyone knows about the big demand side programs like Section 8 but not the supply side stuff. Yes Ig, the feds, states, and local communties actually pay landlords to create rentals and not just single family or multi unit residential properties. You might also be able to discern rents and the extent to which your market is both subsidized on the supply side and also leveraged from CRA, HMDA and AHS databases. The CRA data might be the first place to begin. Talking with a loan officer at a local regional bank would also be productive. He or she will know all of this stuff and they have to disclose it to you. As I originally stated, what you are considering is just like any start up and that means you have to know both the business you are entering and the lay of the land where you intend to operate. -- John R. Carroll |
#13
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How to buy a warehouse
Ignoramus8246 wrote:
On 2010-03-29, Ignoramus8246 wrote: On 2010-03-29, John R. Carroll wrote: Ignoramus8246 wrote: I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% ... I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. Like any other business, this one requires training and experience. Spend a year talking to people Ig. Good idea. I do not expect to find a super great deal, given my level of expertise, just something where I would not be screwed and where I do not overpay too much. I'm also a little surprised, given the following: With the Fed Funds rate at zero bonds have only one future and it ain't pretty. With the tremendous distress and ongoing deleveraging in the bond market it still isn't certain what any financial services business ir really worth these days. With the upcoming need to refinance a HUGE notional value in corporate high yield bonds begining in 2011, there might just be a shortage ( and therefore interest rate run up ) of funding for debt. That you are thinking about an investment that isn't remotely liquid. Um, I do not see the contradiction. I did not post a message here saying "I would like to invest in a 30 year bond". I want to buy a warehouse, not a long bond. I was planning to put up 50-60% in cash and if I can find a loan at affordable fixed rates (I never take out other kinds of loans), finance 40-50% of the purchase. If I cannot find such a loan, I wuold just buy something smaller. This is all assuming that normalized rents would give sufficient return on caiptal to make this worthwhile. If, say, I buy a warehouse, and rates go up, that may indirectly help me in the longer run, as higher rates would force higher returns on assets and thus higher rental rates. (though I would also anticipate a minor reduction of economic activity). The best time to invest, generally, has been when fear was the mani public emotion. Investing when everyone feels optimistic and giddy, as we know by now, does not lead to great results. I had close to 100% of my money in stocks by March of 90 for that same reason. I was a little I mean March 09 I didn't think you were investing in American equities from Moscov G -- John R. Carroll |
#14
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How to buy a warehouse
On Mar 28, 9:16*pm, Ignoramus8246
wrote: I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. Two suggestions. One...why not rent for awhile and get the feel of the neighborhood. If then you want to buy, there is always someone who will take your money. Real estate is not a very liquid investment and if you need to move, your investment will not follow you. Two..be damn sure that you are not buying a Superfund site. With commercial estate there are many sites that come with a hidden cost...cleanup costs. Make sure that you are not the one holding the bag when something like this comes due. TMT |
#15
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How to buy a warehouse
"Ignoramus8246" wrote in message ... On 2010-03-29, Steve B wrote: "Ignoramus8246" wrote in message ... On 2010-03-29, Larry Jaques wrote: On Sun, 28 Mar 2010 21:16:44 -0500, the infamous Ignoramus8246 scrawled the following: I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. Go talk with a REA, Ig. They can tell you what's out there and who's ready to sell cheap right now. Something close to you so you can check on it frequently, right? Warehouses near airports are always full...in good times. You might find a really nice place in these economic times. You might also find a small place for your own stuff, so you don't have to fill up your garage and driveway, eh? I will start earnestly looking. I did look a bit on loopnet and it seems that there are some affordable deals. With a bit of looking I may be able to find some kind of a buyout deal, where I buy a warehouse with machinery and sell it off in two months, or something like that, to help pay my costs. i It's a soft market, ig. Who are you going to sell the machinery to if places are going out of business, and there is a glut for equipment? You could get into a storage situation with a lot of inventory, but not a lot going out the shipping dock. I know that you are moving stuff right now, but you don't have the big nut you would have in a building, where the first $XXXXX a month that comes in is already promised. Why don't you do this? Start on a small scale, and see how it works. If it doesn't, you don't have a large warehouse and a lot of equipment, sitting there like a horse that just eats. Steve, most machinery sells very easily, if one does not demand pre-2008 prices. I was not considering buying anything that I could not afford without big pain. i It's all business, ig. Buy low sell high. If you're right, you make out. If you're not, you don't. My experiences with businesses was that a lot of people know their crafts very well, but once they go commercial in a big way, they create an overhead monster, and that monster must eat every month before the owner does. You have the drive and intelligence to do this. However, you are moving from a position of do it when you want to having to be there every day to open the doors, search for the stuff, clean it and prepare it for sale, deliver, etc. You may be doubling your work week, and only increasing the profits by 20%. And then there's employees. When I started a welding business, a friend of mine had a friend of his coming into town from Florida, where he owned a very successful business. We talked, and he mentored me. I remember him saying, "Do everything you can by yourself. Employees are the kiss of death." I wish you well on your venture. The only way you are going to find out is test the waters. But it's like piling a bunch of money and your stuff in the middle of the street and sitting a gas can beside it. If all goes well, it all goes well. If not, it's like adding gas and lighting it all off. It just goes away. Steve |
#16
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How to buy a warehouse
On Mar 28, 9:16*pm, Ignoramus8246
wrote: I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. Another thought Ig...ever consider buying your next house with a LARGE outbuilding on the lot? You live next to your warehouse. TMT |
#17
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How to buy a warehouse
"Too_Many_Tools" wrote in message
Are you sure you want to be a landlord..it comes with its share of headaches. I have done that, and it certainly can come with a lot of headaches, but it paid for itself and the property appreciated very well for me. Except for one office building which I still own and rent I sold my rentals a few months before the real estate bubble burst and did very well. I'm actually actively looking again. I'm just afraid that so may a lot of other people. |
#18
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How to buy a warehouse
On 2010-03-29, Bob La Londe wrote:
"Too_Many_Tools" wrote in message Are you sure you want to be a landlord..it comes with its share of headaches. I have done that, and it certainly can come with a lot of headaches, but it paid for itself and the property appreciated very well for me. Except for one office building which I still own and rent I sold my rentals a few months before the real estate bubble burst and did very well. I'm actually actively looking again. I'm just afraid that so may a lot of other people. The way I think about it, is that a lot of real estate people lost a lot of money, so not as many people may be looking. The key is not to buy into hype and avoid leverage. i |
#19
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How to buy a warehouse
On 2010-03-29, Steve B wrote:
It's all business, ig. Buy low sell high. If you're right, you make out. If you're not, you don't. My experiences with businesses was that a lot of people know their crafts very well, but once they go commercial in a big way, they create an overhead monster, and that monster must eat every month before the owner does. You have the drive and intelligence to do this. However, you are moving from a position of do it when you want to having to be there every day to open the doors, search for the stuff, clean it and prepare it for sale, deliver, etc. You may be doubling your work week, and only increasing the profits by 20%. Steve, I was thinking of buying a warehouse to rent out, not to open a full time business. If I was planning on that, I think that your comments about running a business would be spot on. i |
#20
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How to buy a warehouse
On Mar 29, 10:36*am, Ignoramus9410
wrote: On 2010-03-29, Steve B wrote: It's all business, ig. *Buy low sell high. *If you're right, you make out. If you're not, you don't. *My experiences with businesses was that a lot of people know their crafts very well, but once they go commercial in a big way, they create an overhead monster, and that monster must eat every month before the owner does. *You have the drive and intelligence to do this. However, you are moving from a position of do it when you want to having to be there every day to open the doors, search for the stuff, clean it and prepare it for sale, deliver, etc. *You may be doubling your work week, and only increasing the profits by 20%. Steve, I was thinking of buying a warehouse to rent out, not to open a full time business. If I was planning on that, I think that your comments about running a business would be spot on. i You can't hide the real reason from the long-time readers of this group. The real reason is you have run out of room in your garage and you need a place to store your new stuff. Paul |
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How to buy a warehouse
"Ignoramus8246" wrote in message ... I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. Keep checking the classifieds to understand the market for space. What is the demand and cost for space in various locales? Talk to other landlords, commercial real estate agents and appraisers to see what the issues are. Check what taxes are applicable. Factor in continuing maintenance costs of buildings and grounds. Don't forget insurance costs and legal costs. Your bank can tell you the average worth of warehouse space per square foot and how much is available. It could be a good investment. |
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How to buy a warehouse
Ignoramus8246 wrote:
I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I don't know what sort of properties are available in your area. A guy in our area, who unfortunately died of cancer last year, bought an incredibly cool clerestory factory building in downtown St. Louis about 5 years ago. The rear part with the clerestory windows was in pretty good shape, but there was a 2-story office space in the front that was pretty badly rotted out. He re-roofed it, rebuilt the office space into a home, and it was apparently pretty cool, but I didn't get a tour of that part. Under the front office was a shop space with street-level access and a big roll-up door. He had machine tools, an incredible foundry setup and all sorts of other stuff there. He rented out most of the clerestory back part to a couple of tenants. This was in one of those "loft districts" where all sorts of artsy folk were setting up all sorts of studios. But, one of the guys had a horrible little cement blockhouse of a shop a block away where he repaired Indy racecars, and he needed a place to store the cars he was working on. A very interesting place! Jon |
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How to buy a warehouse
Ignoramus8246 wrote:
If, say, I buy a warehouse Oh, one other point. Be SURE to factor in security, whatever mods you will need to make to make the building secure, etc. Also, depending on what you are going to do in it, check into insurance. Business insurance, even just casualty coverage on business property, is just insanely out of sight. Jon |
#24
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How to buy a warehouse
Ignoramus8246 wrote:
I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. Iggy, the local Real Estate Investors Association is: CHICAGOLAND Chicago Area REIA PO Box 2597 Glen Ellyn , IL 60138 contact: Laura Baker, President phone: 630-375-7342 email: website: www.careia.org guest policy: $15 Go to a meeting and let the people know what you are interested in, they can point you at people who can teach you how to do it right and people who have real estate to sell. Stuart |
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How to buy a warehouse
Ignoramus8246 wrote:
I was thinking about something like 4k square feet, two bay doors or something like that. Not a big building 90% financed via leverage. 4K sq ft is not enough space to let it out, except to one tenant, probably. But, maybe that is what you had in mind. In some areas, much larger properties are available for a song, and if you can buy it for a song, then the taxes will be based on that sale price, at least for the first couple years. There are a lot of properties, like the clerestory factory building I mentioned in an earlier message, that VERY few established businesses want. But, to possibly split up and have a couple startups use, it could be just perfect. Jon |
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How to buy a warehouse
Good point, Jon. The space I rent for my electronic assembly business
is set up for 3,000 ft increments. We rent 6,000 ft. All the spaces can have walls knocked out to expand to another 3,000 ft. or rebuilt to reset the footage. The building is metal with concrete floor. The land lord usually has the units all set up for 3.000 ft. Ig, Each unit you rent must be set up for a rest room that is ADA compliant. Must have some off-street parking, Obviously must have water/sewer, etc. If each unit had an office space, that is a plus. Should have individual phone lines already installed which can be used as part of a security system for each space. Expect to have conflicts between renters if you have more than one. Even the best renters can irritate the other. Yes, your insurance will be a lot of money, but will go down for a rented unit as the renter will have to have insurance to make you whole in case of a claim. If you are going to mange the unit yourself, you will spend a lot of seemingly wasted time showing the unit to potential renters. We have looked at lots of other buildings and each visit takes about an hour, plus driving time. Even more time if the potential renter sees something of interest. The worst impression you can make is to say you don't know something about your very own building. Paul On Mar 29, 3:54*pm, Jon Elson wrote: Ignoramus8246 wrote: I was thinking about something like 4k square feet, two bay doors or something like that. Not a big building 90% financed via leverage. 4K sq ft is not enough space to let it out, except to one tenant, probably. *But, maybe that is what you had in mind. *In some areas, much larger properties are available for a song, and if you can buy it for a song, then the taxes will be based on that sale price, at least for the first couple years. *There are a lot of properties, like the clerestory factory building I mentioned in an earlier message, that VERY few established businesses want. *But, to possibly split up and have a couple startups use, it could be just perfect. Jon |
#28
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How to buy a warehouse
Jon Elson wrote:
Ignoramus8246 wrote: I was thinking about something like 4k square feet, two bay doors or something like that. Not a big building 90% financed via leverage. 4K sq ft is not enough space to let it out, except to one tenant, probably. But, maybe that is what you had in mind. In some areas, much larger properties are available for a song, and if you can buy it for a song, then the taxes will be based on that sale price, at least for the first couple years. There are a lot of properties, like the clerestory factory building I mentioned in an earlier message, that VERY few established businesses want. But, to possibly split up and have a couple startups use, it could be just perfect. A big factor here will be how much managing you want to do. One tenant, you can write the lease so they pay pretty much all expenses, and most of the maintenance and repairs. Look up triple net lease... More tenants, you will need to spend more time and energy running the place. Flip side, if one tenant quits, you pay everything until you find a new one, or you hardly notice it because it is only 10% of your income. Stuart |
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How to buy a warehouse
"Ignoramus9410" wrote in message ... On 2010-03-29, Steve B wrote: It's all business, ig. Buy low sell high. If you're right, you make out. If you're not, you don't. My experiences with businesses was that a lot of people know their crafts very well, but once they go commercial in a big way, they create an overhead monster, and that monster must eat every month before the owner does. You have the drive and intelligence to do this. However, you are moving from a position of do it when you want to having to be there every day to open the doors, search for the stuff, clean it and prepare it for sale, deliver, etc. You may be doubling your work week, and only increasing the profits by 20%. Steve, I was thinking of buying a warehouse to rent out, not to open a full time business. If I was planning on that, I think that your comments about running a business would be spot on. i My experience from common rentals have not been good. We do have three vacation rentals, but in that case, one week's occupancy pays for more than a month's mortgage, so it is good. You just have to balance the numbers and see if it is right for you. I'd advise consulting a professional who can tell you the advantages and disadvantages, and plug in YOUR numbers. It's not right for everyone, but it's not wrong for everyone, either. If you can make more than your payment, and have the payments cover the mortgage and upkeep, it is a positive situation. It can go anywhere on the map from there. Steve |
#30
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How to buy a warehouse
" wrote in message ... On Mar 29, 10:36 am, Ignoramus9410 wrote: On 2010-03-29, Steve B wrote: It's all business, ig. Buy low sell high. If you're right, you make out. If you're not, you don't. My experiences with businesses was that a lot of people know their crafts very well, but once they go commercial in a big way, they create an overhead monster, and that monster must eat every month before the owner does. You have the drive and intelligence to do this. However, you are moving from a position of do it when you want to having to be there every day to open the doors, search for the stuff, clean it and prepare it for sale, deliver, etc. You may be doubling your work week, and only increasing the profits by 20%. Steve, I was thinking of buying a warehouse to rent out, not to open a full time business. If I was planning on that, I think that your comments about running a business would be spot on. i You can't hide the real reason from the long-time readers of this group. The real reason is you have run out of room in your garage and you need a place to store your new stuff. Paul Thank you for putting it so delicately, Paul. g Steve |
#31
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How to buy a warehouse
"Jon Elson" wrote in message ... wrote: You can't hide the real reason from the long-time readers of this group. The real reason is you have run out of room in your garage and you need a place to store your new stuff. Yeah, that's what I was thinking, too. If it doesn't start out that way, anybody who has been buying stuff at auction will just expand into that kind of space. Maybe be DRAGGED kicking and screaming into it by all the "neat stuff". It's a disease we are all familiar with. Jon Just like work expands to fill the time allotted, "stuff" expands to fill available room, and then there's always the driveway. Steve |
#32
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How to buy a warehouse
On 2010-03-29, Stuart Wheaton wrote:
Ignoramus8246 wrote: I keep hearing that commercial real estate is in bad shape. At the same time, valuations of stocks are up 70% and I would like to diversify my investments a little bit, as I am mostly invested in stocks. I would like to try to buy a small warehouse and just rent it out forever. This would not be a purchase for a quick flip. I was trying to find out some basic things, like rents per square foot, prices per square foot, see listings of what is available, etc. When I just do web searches on this stuff, I come up with so little, as if information on this was classified. I am in Chicagoland and would be interested if someone can help me get started with some useful pointers or experiences. Iggy, the local Real Estate Investors Association is: CHICAGOLAND Chicago Area REIA PO Box 2597 Glen Ellyn , IL 60138 contact: Laura Baker, President phone: 630-375-7342 email: website: www.careia.org guest policy: $15 Go to a meeting and let the people know what you are interested in, they can point you at people who can teach you how to do it right and people who have real estate to sell. Stuart Stuart, this is very much on the mark. Thanks. Tomorrow me and my whole family are going on an Amtrak trip to California, once we come back I will start researching deeply. needing space for stuff. I actually manage with the garage and backyard. For personal messing around, I would much rather have space next to my house rather than a warehouse somewhere. The warehouse is really meant to be a way to get monthly rent checks. Maybe later in life I will use one for my own purposes, but not now. i |
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How to buy a warehouse
On Mon, 29 Mar 2010 22:50:08 -0500, Ignoramus9410
wrote: Go to a meeting and let the people know what you are interested in, they can point you at people who can teach you how to do it right and people who have real estate to sell. Stuart Stuart, this is very much on the mark. Thanks. Tomorrow me and my whole family are going on an Amtrak trip to California, How long you going to be here and where are you going? Im sure a bunch of us would love to meet you. Gunner "First Law of Leftist Debate The more you present a leftist with factual evidence that is counter to his preconceived world view and the more difficult it becomes for him to refute it without losing face the chance of him calling you a racist, bigot, homophobe approaches infinity. This is despite the thread you are in having not mentioned race or sexual preference in any way that is relevant to the subject." Grey Ghost |
#34
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How to buy a warehouse
"Jon Elson" wrote in message news Ignoramus8246 wrote: If, say, I buy a warehouse Oh, one other point. Be SURE to factor in security, whatever mods you will need to make to make the building secure, etc. Also, depending on what you are going to do in it, check into insurance. Business insurance, even just casualty coverage on business property, is just insanely out of sight. Jon I knew a guy who bought a piece of property he thought was a steal. Come to find out, it was previously a gas station. It cost him a lot to remediate the property, and with all the remediation, he broke even. After about five years. Research the property in question. If you buy a EPA cleanup site, the government won't want to hear any whiny stories on how you didn't know. Steve |
#35
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How to buy a warehouse
On 2010-03-30, Gunner Asch wrote:
On Mon, 29 Mar 2010 22:50:08 -0500, Ignoramus9410 wrote: Go to a meeting and let the people know what you are interested in, they can point you at people who can teach you how to do it right and people who have real estate to sell. Stuart Stuart, this is very much on the mark. Thanks. Tomorrow me and my whole family are going on an Amtrak trip to California, How long you going to be here and where are you going? Im sure a bunch of us would love to meet you. I am going to San Jose, CA. i |
#36
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How to buy a warehouse
On Tue, 30 Mar 2010 09:18:46 -0500, Ignoramus28422
wrote: On 2010-03-30, Gunner Asch wrote: On Mon, 29 Mar 2010 22:50:08 -0500, Ignoramus9410 wrote: Go to a meeting and let the people know what you are interested in, they can point you at people who can teach you how to do it right and people who have real estate to sell. Stuart Stuart, this is very much on the mark. Thanks. Tomorrow me and my whole family are going on an Amtrak trip to California, How long you going to be here and where are you going? Im sure a bunch of us would love to meet you. I am going to San Jose, CA. i If you head south to LA..give me a call and Ill meet you somewhere. 805 732 5308 Gunner "First Law of Leftist Debate The more you present a leftist with factual evidence that is counter to his preconceived world view and the more difficult it becomes for him to refute it without losing face the chance of him calling you a racist, bigot, homophobe approaches infinity. This is despite the thread you are in having not mentioned race or sexual preference in any way that is relevant to the subject." Grey Ghost |
#37
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How to buy a warehouse
Stuart, this is very much on the mark. Thanks. Tomorrow me and my whole family are going on an Amtrak trip to California, How long you going to be here and where are you going? Im sure a bunch of us would love to meet you. I am going to San Jose, CA. I When in San Jose, visit Weird Stuff Warehouse. |
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How to buy a warehouse
Bill Noble wrote:
Stuart, this is very much on the mark. Thanks. Tomorrow me and my whole family are going on an Amtrak trip to California, How long you going to be here and where are you going? Im sure a bunch of us would love to meet you. I am going to San Jose, CA. I When in San Jose, visit Weird Stuff Warehouse. There used to be a whole BUNCH of interesting places in the south bay area. I think Halted Specialties is still around at 3500 Ryder St. in Santa Clara. Mike Quinn is at 401 Mccormick St in San Leandro. They used to be on the Oakland Airport, then moved a couple blocks away. Triangle Machine has apparently closed. It was a totally awesome place, with tables of ballscrews, servo motors, etc. just filling the place! Those are the only ones I knew of in recent history. Some years ago I used to make almost yearly trips to Berkeley, and would rent a car and take a whole day to tour all the cool places. If you are interested in old computers, the Computer History Museum is a total blast. They have all the computers I learned on, including some quite unusual machines from the 60's. Jon |
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