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Galveston Commercial Properties
October 31, 2009
Loft Conversions– Maximizing Your Investment Dollars
By Scott Barker
When buying investment real estate, there are many approaches to maximize the return on your money. One approach is lease optioning your houses. This is a very good approach in many cases. A second way of getting a quick return is to find property that you can rehab and resell. A third approach is doing loft conversions on historical buildings.
For more information about this property contact: Jason Keeling
History of building
Galveston, Texas is one example of places that historical buildings are still very affordable. The real money is made by carefully evaluating the entire transaction. This includes looking at what the investment property will bring on the back end, or on the sale. When you find a prospective investment property to buy and convert to lofts, be sure to look at your profit after all the construction money is spent.
Let’s use a very unique property for sale on the market right now located at 507-23rd Street in Galveston Texas. This two-story building was built in 1890 and has 13,000 square feet. On the first floor it has 3 commercial sites, a garage and a storeroom. Two of the three spaces are currently rented. The second floor has a beautiful luxurious 3,200 square feet loft with elevator and large roof top deck. Also included on the 2nd floor is an open space of 2,800 square feet waiting for build out of 2 more lofts.
The price of this historical Galveston building is $599,000. You would need to invest approximately $200,000 to build out the back two lofts as well as spruce up the exterior facade of the building to take it back to its original historical image or perhaps some other version. Below is how I formulated the cost.
Conversion Cost
Cost of building: $599,000
Build out Loft one: $65,000
Build out Loft two: $65,000
Spruce up big loft: $12,000
Spruce up exterior façade: $30,000
Build roof top multi-level decking for lofts: $20,000
Architect and replating cost: $8,000
Total Conversion Cost: $799,000
The two smaller lofts would sale for $150,000 each. The big loft would sale for $300,000. The three 1st floor commercial units can be sold for $680,000.
1st Commercial unit Sale price: $150,000
2nd Commercial unit Sale price: $150,000
3rd Small Commercial unit Sale price: $80,000
1st Loft Sale price: $200,000
2nd Loft Sale Price: $200,000
Large Loft Sale price: $300,000
Garage Unit sale Price: -
Total Sale of Units: $1,080,000
The total sale of all seven units is $1,080,000. The total profit on this property would be $281,000. That is a nice return on your investment. If this project looks too big for you to undertake personally, investor groups could be another option; such as putting together two to four investors to share in the responsibilities.
Background: Scott Barker is a contractor and investor in the Galveston county area. He is the president of Ethos builders, LLC., a company that restores historical properties and commercial investment properties. He also rehabs investment properties for resale as well as works with other investors interested in investment properties and Loft conversion investments.
Galveston commercial Real Estate
For more information, contact us now!
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