Maybe buying a garage

[MackMan]

Hi everyone,

I have recently come accross an interesting opportunity to purchase a "commercial" garage. I have been planning for some time to have a 30x40 garage built on my land next to the house. The garage that is available is basically that size (29x38 I think?) but has an additional office space on the side that's 12x29, complete with a full bathroom. The office space has a heat pump and security system.

Originally I wasn't interested as I preferred the convenience of having my garage next to the house, and this property is about 6 miles away, however some things have swayed my opinion here
1) I plan to have a 20-25' enclosed car trailer for racing, and this would be tricky to store on my residential property, but would not be a problem at the off-site garage.
2) To build a garage on my property within the requirements of the city I would be looking at $45-50,000 NOT including plumbing, electrical etc. Just a concrete slab and shell, with driveway. This garage asking price is $49,000 and includes a 2-post lift, heavy electrical service (at least 220V) and full bathroom as well as climate control and security system. This seems far more cost effective AND gives me the flexibility to sell it to raise cash if that is ever needed.

The disadvantage are remote location (have to drive to get there) and the layout (door locations) aren't ideal, and the location of the building on the lot mean that I can't really do a different arrangement.

The building is concrete block construction, extra high ceilings (well over 10'), with vinyl siding.

Currently it has been on the market for almost a year, and strangely is still fully equipped though looks to have not been used in quite a while. There is an industrial air compressor and hard-line air throughout, and also equipment for mounting and balancing tires (appears they were running a used tire business out of here because the place is stacked almost floor to ceiling with tires, you can barely walk around inside).

I'm thinking of jumping on this but wanted to see what questions I should be asking the realtor and what kind of things I should be looking for. In NC we have a due dilligence period wherein I can make a non-refundable deposit but back out of the contract during that period for any reason (or no reason). I'd want to have the tires and junk cleared out and have a chance to test the lift operation and air compressor. What else?

The brand of the lift is Eagle... any good? It looks much sturdier than what I am used to seeing, and I'm told the garage was previously owned by a local trucking co..

Thanks!

 

[Chitown_hillbilly]

How is it Zoned? Will there be restrictions based on Zoning? What are the Taxes per year?

From what you mention it sounds like a deal, but there has to be something that is keeping people away.

 

[Camper]

Also be sure to ask about any buried tanks.

 

[Chitown_hillbilly]

Also be sure to ask about any buried tanks.

Yea... that could be the issue. Maybe nobody will touch it cuz they don't want to clean up someone else's mess.

 

[bad12jr]

I'd offer 32000 or so. A commercial is not gonna be something most of the general public will even consider.

Sent from my DROID RAZR HD using Tapatalk 2

 

[rsanter]

How about ground contamination from dumping oil or chemicals

As far as I know you can ask the previous owner for indemnification against such things which will make them take out a policy that will cover you in the future

Because the building is not new like yours would be, what is the general condition of the roof and other things that don't last a lifetime

Otherwise seems like a good deal to me

Bob

 

[MackMan]

The zoning is "Traditional Neighborhood". However the building use listed on the tax record is "Auto Sales and Service". I'm not sure what the zoning restrictions might be that would affect me, though perhaps something I would want to better understand. The Realtor indicated that it should be no problem for private use, though it is clear that the previous occupant was engaged in business, and there are several vehicles parked on the lot including 2 commercial trucks, a few trailers, and stacks and stacks of tires, oil drums, etc and so on. Though perhaps that's why the previous occupant is "previous".

Tax value is $52,000 and annual taxes would be just over $600. It is within city limits as is my house, so the tax implication is probably not too much different than a $40-50k garage on my land.

Have already asked my realtor to check out the buried tanks issue.

As far as why nobody is biting on it, well there are a few theories there. It looks like a commercial building, but it is not in a high-traffic location. There is a low probability that you would drive by the location and think to stop in for car service, you'd have to know it's there. And as also stated the population of people like me looking to buy a large shop/garage is fairly low.
Also as I mentioned you can barely walk around inside due to the stacks and stacks of tires. It does not "show" well.

The current owner paid $40,000 for it in 2010. A

 

[MackMan]

How about ground contamination from dumping oil or chemicals

As far as I know you can ask the previous owner for indemnification against such things which will make them take out a policy that will cover you in the future

Because the building is not new like yours would be, what is the general condition of the roof and other things that don't last a lifetime

Otherwise seems like a good deal to me

Bob

That is definitely a question to ask.

As far as age and condition... It was built in 1988. It looks like the roof will need to be re-shingled soon so I am going to get an estimate on that and "assume" it's part of the purchase price. Inside there is a built in gas heater in the garage area that looks like something from American Pickers (looks much older than the garage). That would need to be addressed, but there is also one of those torpedo type propane heaters that I may ask them to leave for me to use in the interim. The office area has a heat pump.

Of course I would have a building inspection performed during the due diligence period to check the structure itself and see what may be required and adjust my conditions based on that.

 

[Jagmandave]

Unless there are hidden problems/issues, I'd be all over that - it sounds like a great deal to me.....just make sure cleaning it out is part of the deal, or reduce the price accordingly.

 

[MackMan]

Yes, my thought is to identify things that MUST stay (lift, air compressor, anything else I like), and also identify things that MUST go (tires, tires, tires, and some misc junk) and then let them do whatever is convenient with some of the other stuff that I can either use or easily re-sell.

Another random question, in line with the above notion of oil spill problems on the surface. Outside there is a large tank for recycled motor oil. I'm assuming as a commercial shop this was serviced, but as a private user it would be really handy to have and just have it serviced "as needed". Anyone had any experience with having this done? Or am I better off to just keep going to Advance to dump my oil?

 

[bczygan]

The prior use may have been grandfathered for that business only. Your use may not be permitted. Even if you think your use is residential, the jurisdiction may not. Check this out with zoning!!!

 

[MackMan]

The prior use may have been grandfathered for that business only. Your use may not be permitted. Even if you think your use is residential, the jurisdiction may not. Check this out with zoning!!!

Understand and this is certainly something that must be answered, however the current/previous occupant purchased in 2010, so it is unlikely that the specific business was grandfathered from some previous date. But you are correct this is a question to ask.

Of course if my use is not permitted I'm not sure what would be.

 

[No Sweat Photos]

Used tire places might buy the tires $3-5 each !!
If they are useable and if your up to it I would reopen it and sell off the tires $$$$

 

[MackMan]

Tires might cost $12 or so each to dispose of.
Zoning of nonmanufacturing in our town means you can't even rebuild a carb or alternator.
Huge sound and access issues may exist.
Compliance for ada bathroom could be $35000 since its commercial.


Just a list of things that killed two commercial deals for me.

Good things to consider. Tires would be disposed of per contract, that's not negotiable for me. The contract rule here is that unless it's specifically stated on the contract that something is being left the seller removes personal property. I want to put in the contract in addition to that they they will definitely remove the tires and some other junk I don't want to deal with.

I'm not sure what you mean by zoning of nonmanufacturing... Sounds like you would not be able to do those things in your own home attached garage?!

Used tire places might buy the tires $3-5 each !!
If they are useable and if your up to it I would reopen it and sell off the tires $$$$

While it seems perfect for someone who wants to get into used tire sales I have a new baby months away and dealing with an inventory of probably more than 1,000 tires is not something I'm going to deal with right now.

 

[HoosierMark]

Make some assumptions to that can be proven. Assume the property has no EPA issues, zoning issues, equipment works and building is structurally sound. Obviously if the first one is a problem, you probably want to walk away. If the zoning is a problem you may be able to get it rezoned or get a variance, you can determine the cost of getting the equipment fixed and any strucutral issues. The real issue is do you want to be 6 miles from home. Home is convienent for many reasons. If you buy the structure right (at below market price) you can probably try it for a year or two to determine if you like the location If not sell it and probably break even or better and build at home. You may also end up with a nice little rental property for any number of tenants.
If you are financing it loan rates and down payment will be higher then residential property. You could do a self directed IRA to buy it with your retirement funds which you could not do building at home. This is a little complicated but real estate is an approved IRA investment just like stocks and bonds.

I have no idea what it is worth but if it has been on the market for a long time I smell a bargain. If you are OK with being away from home, translated fridge goodies, family, etc, Get a price agreed upon subject to your due dilligence in the various areas and go for it. If you buy it right you have minimal to lose but lots to potentially gain.

 

[HoosierMark]

One other thing, used oil? Around southeast IN, we have people heating with it in many of the garages. People will come get it for free.

Tires, what about leasing one of those tire cutters. In my area, if you cut them in quarters the local trash guys take them as part of the garbage. Get a price to dispose of them and deduct it from the purchase price. That way you are in control of the disposal and do not have to worry if it is not done to your satisfaction.. Plus if they were going to get rid of them, they would have done it already. The seller probably is done with the property and just wants out.

 

[MackMan]

Yes, my realtor is already starting to investigate some of these issues. Apparently the selling realtor has a letter from the city planning board regarding the zoning and usage, and my realtor agreed we should have this in writing before purchase.

As far as the being away from home... there just the pro/con list there... main con is lack of convenience but there are lots of pros.

Got the great old "Bank of Dad" for financing on this, so no mortgage worries. He has been wanting to unload some of his "stuff" and helping me get a garage gives him a place to do that!

Here are some pictures.

 

[Jagmandave]

I would be SO all over that deal!

As to the oil, I used to have a company that would come by (I'd call them when I needed them) to pick up my used oil, they paid me about 50¢ a gallon and I had one of those 300 gallon containers - not a lot of money, but the convenience was worth it.

Only 6 miles from home? That's nothing, if the wife needed you, you could be home in less than 10 minutes. Plus too and also, if the office is nice enough she could come hang out and bring the baby along too....might as well start him/her early!

 

[AirJunky]

I like it. Close enough you could ride your bike or even run to it (if that's your thing). Far enough away that you won't just run over to the house if your wife calls or something small.

So does the contents come with it? The tires might be costly to unload. Or maybe someone needs them to build some kind of barrier or something? Lots of other good stuff though, the lift, compressor, hose reel, storage bins, floor jacks, etc.

 

[Daedalus]

I would be worried about security. You'll want to have all your tools there, rather than in your vehicle, or transporting them back and forth everytime you go there. Safe place?

I had a 2nd garage for a long time that was 3.5 miles away. That was annoying to say the least. Heck, I don't even like the long driveway I have now to my current garage. Wished it was closer like at my first house!

 

[MackMan]

I don't know the disposition of everything in it, but the tires must go, I'm not dealing with that.

As far as the family, the office would be a nice little area once it's cleaned up to be a little lounge. Full bathroom so that's a plus.

As far as security, the garage itself is concrete block. Only access is through the steel garage doors or through the office and the office is fairly secure and also has a monitored security system. This is also near main street within city limits, the police dept is <3 miles (I pass the station between my house and here). I'd probably also be setting up a little home gym in there so I'd be in 3 days/week at a minimum so it won't be abandoned.

 

[justanengineer]

I cant speak to NC, but I would be concerned with the taxes if it was ever used for a business. Many places Ive lived spaces like that have had taxes $5-15k, and also seen them double overnight due to "accounting errors" (ie. the PO is a politician's BIL). It would really **** to be reevaluated after the closing and find your tax bill was missing a 0. Growing up in the northeast Id also look at it from the standpoint that many states are in a hole economically, and anything resembling a small business is going to be stuck with a majority of the bills.

 

[1jjpop]

Sounds great .My shop is 3 blocks from where we live.Not real big but a place to work on stuff. Also A great place to hang out at ,so i don't get under foot at home... I have my garden there & a storage building plus my trailers...Works great since i 'am retired .

 

[MackMan]

I cant speak to NC, but I would be concerned with the taxes if it was ever used for a business. Many places Ive lived spaces like that have had taxes $5-15k, and also seen them double overnight due to "accounting errors" (ie. the PO is a politician's BIL). It would really **** to be reevaluated after the closing and find your tax bill was missing a 0. Growing up in the northeast Id also look at it from the standpoint that many states are in a hole economically, and anything resembling a small business is going to be stuck with a majority of the bills.

Interesting thought. Just to check, I looked up one of the "big businesses" downtown, in a prime location on Main St. Property value is just over $1,000,000 assessed. Taxes are $15,000. in 1997 the assessed value was $900,000 and the taxes were around $10k.

There's a reason lots of businesses (and people) are moving South. When I lived in PA I paid about $5,000/year in real estate taxes. Here I'm paying about $1,500.

The tax history on this property is pretty linear, though they do have the tax value a little higher than market value now but not by too much.

 

[Stevie-Ray]

I had a 2nd garage for a long time that was 3.5 miles away. That was annoying to say the least. Heck, I don't even like the long driveway I have now to my current garage. Wished it was closer like at my first house!

I heard that. Mine is only 30 feet or so behind my house and I'm already seeing the beauty of attached garages. Meh, at least it's no further away than the one at my previous home, but it's FAR bigger.

OP, that place looks sweet. The tires are the only thing I'd be worried about, since you've about covered everything else. Good luck on the bid, if you go for it.

 

[MackMan]

Went by here again last night and noticed what I had not before... a hydraulic press. Handy.

Also, outside is sitting this derelict air compressor. I'm assuming since it's dumped outside that it's non-functional... something worth fixing up or junk?

 

[nolimits76]

In my mind, there are a few things you must be okay with so it won't bite you in the ****:

1. You are okay being 6 miles away working on stuff. You mentioned a new baby on the way. This may be more problematic than you envision. Also, recently a co-worker of my wife's was at his HOME garage working on his Jeep changing out a gas tank. Something happened and the Jeep came down on him. He was trapped and the weight of the Jeep was crushing him and didn't even allow him to yell for help. By pure luck, his wife walked out to check on him and saved his life. Yes, I realize this is an extreme case, but depending what kind of wrenching you do and how often you use the lift, it might be a concern.

2. No EPA issues. You mentioned there was oil drums on the property. Having worked for an environmental company, and currently a construction company that is leasing a property for one of our jobsites that had oil drums and does have EPA issues, I can tell you it is a pain. Even in the case where we LEASE the property with EPA issues, we have spent money helping the leasor (City) do some general cleanup and move our operations for testing and other cleanup operations to commence (on their dime). The only reason we deal with it is because we are getting a steal of a deal for the size of property vs price we are paying.

3. There are no issues, or variances you have to deal with on zoning. If you have the slightest issue, you have WRITTEN ASSURANCE it can be dealt with to YOUR satisfaction before you submit an offer.

4. The building, equipment you desire, etc is all functional and of sufficient quality.

If those (4) things meet, the rest is just negotiation. It sounds like those tires and other scrap items are something you don't want to deal with, and that is okay. Just keep in mind if the seller wants to wash his hands of it all, you may need to consider dealing with those issues. Scraping metal items for cash is a good idea. Reselling the tires (in a LOT) to used dealers is another good idea. Those things actually provide some cash incentive to you while removing a problem.

Just a different way to approach it is all. It may help you negotiate a better purchase price. Worst case scenario, talk to some folks and get real quotes. Compare against the labor/efforts it will take so you can monetize the removal of undesired items.

 

[SpiderGearsMan]

BANK OF DAD ?
it's how a lot of business gets done hahahahaha

 

[MackMan]

In my mind, there are a few things you must be okay with so it won't bite you in the ****:

1. You are okay being 6 miles away working on stuff. You mentioned a new baby on the way. This may be more problematic than you envision. Also, recently a co-worker of my wife's was at his HOME garage working on his Jeep changing out a gas tank. Something happened and the Jeep came down on him. He was trapped and the weight of the Jeep was crushing him and didn't even allow him to yell for help. By pure luck, his wife walked out to check on him and saved his life. Yes, I realize this is an extreme case, but depending what kind of wrenching you do and how often you use the lift, it might be a concern.

2. No EPA issues. You mentioned there was oil drums on the property. Having worked for an environmental company, and currently a construction company that is leasing a property for one of our jobsites that had oil drums and does have EPA issues, I can tell you it is a pain. Even in the case where we LEASE the property with EPA issues, we have spent money helping the leasor (City) do some general cleanup and move our operations for testing and other cleanup operations to commence (on their dime). The only reason we deal with it is because we are getting a steal of a deal for the size of property vs price we are paying.

3. There are no issues, or variances you have to deal with on zoning. If you have the slightest issue, you have WRITTEN ASSURANCE it can be dealt with to YOUR satisfaction before you submit an offer.

4. The building, equipment you desire, etc is all functional and of sufficient quality.

If those (4) things meet, the rest is just negotiation. It sounds like those tires and other scrap items are something you don't want to deal with, and that is okay. Just keep in mind if the seller wants to wash his hands of it all, you may need to consider dealing with those issues. Scraping metal items for cash is a good idea. Reselling the tires (in a LOT) to used dealers is another good idea. Those things actually provide some cash incentive to you while removing a problem.

Just a different way to approach it is all. It may help you negotiate a better purchase price. Worst case scenario, talk to some folks and get real quotes. Compare against the labor/efforts it will take so you can monetize the removal of undesired items.

Thanks for the thoughts. The distance and remote location are the main downsides, but I have decided I'm ok with the risk. The office area is climate controlled so Mrs and Baby will be able to come over and hang out there, which wouldn't be an easy thing to do with a detached building on my property.

As far as EPA issues, they have confirmed there are no underground tanks. I will probably look into having a surface contaminant inspection performed before closing, but there's certainly no visible indication.

As far as zoning, my realtor has stated we need to get a written letter from the city planner both allowing my use as well as a guarantee that some sort of business usage is allowable so that the property will still be marketable if I need to sell. She has indicated in general that the city planners are fairly hands off with this sort of thing and doesn't think it will be a problem but wants to have the written allowance. So that will be some sort of condition of sale.

As far as 4) that will be part of the inspection o understand what's there what works what doesn't what is scrap etc.

As far as cleanup and value and so on.. I know there are options but with Baby coming I want the garage to make existing projects easier not create another project. Some cleanup and rearrangement is OK but taking weekends to deliver scrap to the recyclers and figure out how to sell tires etc.. nah.

Good thoughts all!

 

[bazzateer]

Me? I'd convert the office into living space and move in there!

 

[CNGsaves]

Looks very promising if the taxes are really that low.

Do research YOURSELF by scouring county tax records so you know "Assessed Value" and trend of taxes/value each year. Also, purchase price will come into play, so you might be able to keep taxes low if you buy for $32K and Tax Value is $52K . . . thus, immediately petition that "Tax Value" to = $32K which should drive down taxes.

Do NOT rely on realtor for your EPA / contamination research. They are trying to SELL you something, and you could be stuck with sink hole for remediation costs. All locations with buried fuel tanks have to be registered with state. Search prior GJ threads on this as websites were listed.

OP provide an update. Good luck but be leery / skeptical.

 

[MackMan]

I have done all the tax research. Everything adds up. Have the records back to 1997.

As far as petition for change of tax value... well the city already has my home with a tax value $20,000 less than independant appraisal and purchase price so even if I pay less than tax value I feel like there's some give/take there. Same thing on cars where they said my Cadillac was worth $14,000 (I sold it for $7800), but my 1973 Porsche is worth $1k or something. *shrug* Long as things balance out I'm not too concerned. Property taxes here are so much lower than what I had in Pennsylvania it hardly seems worth it to argue.

I will try to find this EPA info, very good to know there's an independent way to look that up!

 

[MackMan]

Well I couldn't find anything on GJ about EPA contact but I did come across the UST portion of the NC DENR. I searched their database and did not find anything, but also e-mailed the responsible "section chief" to see if I can get any more info.

 

[LandR]

Which county in NC?

 

[MackMan]

Davidson, city of Lexington

 

[polexican23]

If you dont buy it, I am packing up, moving down there and buying it myself. Hell I will use the tires to build a zombie defense fence around the property too.

 

[MackMan]

If you dont buy it, I am packing up, moving down there and buying it myself. Hell I will use the tires to build a zombie defense fence around the property too.

I'll let you know

 

[Todd.Brock]

That derelict compressor out back could be a great first project. I'm pretty sure That is an RV 30 champion pump. Is there 3phase service at the building? That pump probably needs at least 7.5 or 10HP to run. Great building btw, why are you so opposed to dealing either tires? Can you find a dump or call and ask a used tire store if they want to get an inventory "bump" or call a new tire place and ask where they dump them for that "$3disposal fee". That could be a real good way to get the building for less money?

 

[csi123]

$40,000 for it in 2010. A

If the place was worth $40k back then I wouldn't pay anything more than that. $49k is almost a 25% jump, which is a lot considered that it has been on the market for almost a year.

 

[MackMan]

If the place was worth $40k back then I wouldn't pay anything more than that. $49k is almost a 25% jump, which is a lot considered that it has been on the market for almost a year.

My offer will probably be in that range, especially considering it needs a new roof, but also keeping in mind I will be putting in the contract to keep the lift, air compressor and a few other things that all appear to be very recent vintage. Lift and air compressor look barely used.