On 2010-09-14, Buerste wrote:

"Ignoramus20659" wrote in message
...
Been looking at finding some investment to make. There is a big
liquidation auction coming up. Some CNC/screw machine company is
bankrupt.

Along with it, a warehouse is offered for sale. It is actually big,
19,000 square feet (not a typo) on 1.4 acres of land.

The building is in good condition. The starting price for the building
is 200,000, which works out to slightly over 10 dollars per square foot.
For those who have not been buying and selling warehouses, this is a
very cheap price. (but see below)

This building is being currently marketed by a real estate firm and
the asking price is $299,000.

There is no evidence that there were any recent breakins into this
building (all windows are intact, old and dusty).

The building is located in a town (Dolton, IL) that is 81% black.

I compared crime stats of Dolton and Naperville, which is a big city
next to me. Some crime rares are about same (murder) but some (such as
burglaries) are about 4 times higher.

I drove around the area a lot just to get a feel and my feel is that
it is not a very high crime area. (houses are maintained, shops not
boarded up).

This place is 1 hour away from me.

I am not even sure of basic things, like will I be required to give
bribes to everyone, how will police treat me, will I be asked to pay
for protection to gangs etc.

But in any case, while I am considering making a low bid, I want to
make sure that it does not become an expensive educational project in
how not to invest in real estate.

Any thoughts on this situation?

i

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?



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