Phase I test, Planning Board, zoning district, conforming use, variance, site plan, 200 ft notification, engineering…

This story really begins with a barrage of terms that I never had to deal with when buying residential rental properties. Until one day, when the following occurred to me:

Even though I own rental properties, I am currently renting office space for my business. That just doesn’t seem right. Actually, I hate it. Not that the commercial unit I rent is bad. Actually, it’s very nice and in a good location. But, I OWN rental properties. I AM the landlord. So, since I own residential rentals, why not own my own office unit? Why give rent money away each month and not build any equity? Yes, as a renter it’s nice that maintenance issues are taken care of for me, but it’s also frustrating when my rent goes up three times in 18 months. I want the control and benefits of owing my own commercial unit. The same benefits I get by owning my own home or my other rentals.

Well that may not have been my exact thoughts, but you get the idea. So, I started my search about two years ago. I wasn’t in a big rush. Every once in awhile there was a single unit commercial property that peaked my interest and I’d go see it. Unfortunately, I just couldn’t get the numbers to work on single units. That lead me to migrate to looking for a multi-unit professional office building. Now, I’m not talking about a huge commercial building with elevators and a lobby. I was hoping for just a small strip of four to five offices.

Finally, I found one that might work. It was a historic building that was mixed use (residential apartments and a commercial unit) in my town. The commercial part of the building had been vacant for years and it was a diamond in the rough. Lots of potential, but lots of work. I started to negotiate it and after several months of going back and forth… the deal fell through. Hey, this is real life– it happens. I just couldn’t provide the sellers with what they wanted and get what I needed, too. (As of the time I am writing this post, that property is in pre-foreclosure– so they probably should have taken the deal I was offering, which had been more than fair! Unfortunately, they were simply “stuck” on a certain sales price even though the market had moved away from them– apparently, to their own detriment.)

A couple of months later, I found another building. Fortunately, this one might work even better! With my negotiating skills still sharpened from the last deal that fell through, and feeling a little pumped based on my initial projections, I contacted my real estate agent to get information about the listing. This is where the fun part began. Looking at properties, evaluating them and negotiating them is often a lot of fun. In fact, it’s usually the most fun. After that, it’s much more business than pleasure. So, it’s still a little while until the frustrating aspects of my story start to set in…

Remember, I’m writing this story before the final outcome… so if you are reading these posts as I publish them, you’re getting closer and closer to knowing what’s happening in real time. Learning with me and finding out the outcome of the deal almost “live” as it occurs. Any comments or suggestions? Feel free to post them using the comments link after this article, or email me using one of the links on this page.

But, I digress. And it’s getting late. So, in the next story of this series, I’ll tell you what I was able to uncover with just three pieces of information:

1. The MLS Listing
2. Online tax records
3. A tour of the property.

-Steve Boorstein, Author & Landlord