Investment Property, What questions should I ask?

Hi guys,

I'm looking at an interesting grassroots project. I found a property for sale that's intriguing. I would do all the work myself (I'm capable and I have family with considerably more experience who can help where needed).

http://www.realtor.com/realestateandhomes-detail/4-Lakeview-Park_Columbia_CT_06237_M38420-40698?source=hp

I want to finish the upstairs into a 1-2 br apartment and then I have a house with a massive garage. I understand that it could cost 40-50k to finish the upstairs and I'm prepared for that, what I was wondering is what questions would you ask?

So far, I have: They say it's not zoned as commercial, so it's residential. Is it zoned/permitted as living quarters or is it a barn? If living quarters, how many bedrooms can the lot support? If as barn, what would it take to convert? (Make sure all wiring and structure is to code, install heat/hot water, bedrooms, bathroom, kitchen?) What permits are required?

What do you guys think? Am I out of my mind?

Add septic to the list if it has no bathrooms currently.

no advice.. except.. COOL!

I don't understand the investment bit? Do you currently live in another house and would have a tenant here? or would you have this as your house and rent out garage space?

And it is near a lake...darn near dream property!
Since it has a walk-out basement that mean the cars are suspendend on a second floor. Based on this I would highly inspect that the foundation is done correctly. That can be a lot of weight once you park 4 cars and maybe a boat or RV.

Not zoned commercial, be sure to understand what the residential covenents are for the area. Be sure that you can use the facility in the manner you have planned.
If a garage bay is roughly 10 feet wide by 20 feet deep there should be about 1000 sq ft of living space on that floor and then there is attic or upper floor space as well. You could easily have 1500 sq ft of living space. Even more space if you finish some of the lowest level into living space.

Re-looking at the listing I see the following quote:
"The second floor would make a great wood shop or more storage."
I find it strange that they mention finish to storage but not finish to living space. That has me wondering, the zoning may forbid you from using this structure for living.

Number one concern to me would be the whole zoning thing. Will they (the govt) allow you to do what you want to do.

Number two, is it says it has a full drive under basement. How is the floor of the first floor built? You might want a structrual engineer evaluate it.

That said, that's something I would be all over if it passed muster.

The investment side would be a couple of options. Buy, convert/fix, rent out a few garage spaces to subsidize mortgage.

Or, but, convert/fix, sell (assuming market rebounds, looking at historical value, and added value to someone looking to store their stuff and own a rental apt) in the future when the price is right.

I'd be very concerned about its supposed status as a barn (as mentioned in the ad) - you might want to talk to someone who deals a lot with zoning if it's even possible to put living quarters in there, otherwise you might end up with an expensive garage.

Also, I'd get someone to check if the main floor is strong enough to support a lift - it would be a pity to have that sort of property and find that the drive-in basement resulted in the floor not being strong enough to support a decent lift.

Brotus7 wrote: Add septic to the list if it has no bathrooms currently.

Located on only .33 of an acre, so not enough room for a septic system.
Being close to a lake may also hold off septic.
Far from a main road may hamper the ability to tie into municipal septic or make that a huge financial burden.

Google Maps places this business at the address next to the barn.
http://www.columbiaenvironmental.com/
2 Lakeview Park West Columbia, CT 06237

Was this barn the offices of this "home based business"?
Is the house available for sale as well?

Regarding the septic, there are numerous residential properties around and closer to the lake. Would they likely have municpal sewer or septics?

Good points, I have a pretty good list to call and hit up the Realtor and zoning with. Thanks and keep them coming.

1) You cannot live there.

2) Possible boat storage, but no "commercial" traffic in and out.

3) No septic, no water...just electricity.

4) Previous owner made it really nice as a "home base"..local govt made them rip everything out and fined them 35K.

5) I believe the realtors name is Mary (nice)...the property belongs to her ex? FIL.

6) He had a nice car collection, plus construction equipment in the basement.

The septic rule may allow for 1 tie-in per property. If the house has a tie in then there is no tie in allowed for the barn unless the barn was tied via the house, maybe...
You need to understand how this property is being seperated (on paper) from the main house. If it was all one property as a single family residence then most often there is allowed to only be one residence on that property -hence no living quarters in the barn.

jrw1621 wrote: The septic rule may allow for 1 tie-in per property. If the house has a tie in then there is no tie in allowed for the barn unless the barn was tied via the house, maybe... You need to understand how this property is being seperated (on paper) from the main house. If it was all one property as a single family residence then most often there is allowed to only be one residence on that property -hence no living quarters in the barn.

Ah ha, ok, now I get it.

As a rule, weird stuff is a poor investment.

You want to know everything about and investment. You want to be able to repeat an investment so you don't waste your time learning about it.

That property is too weird and has WAY too many unanswered questions. The resale market for that is too small to be able to find someone that wants it, and find a bank that will loan on it.

Now, if you want it for yourself, and it makes sense, and you can get the local govt to grant you a residential occupancy permit - then go for it. But as an investment - it's really poor.

There are other options to the standard septic. The biggest issue, that I see, is can you do what you want to with the blessing of the local gov't. There was a similar building near me. The original builder never got a permit, among other issues.The local gov't refused to issue a certificate of occupancy and he was ordered to tear it down. After a few years of legal battles, he tried to sell it really cheap and recoup what he could. Being a small community, everyone knew the situation and he couldn't find a buyer. He finally got some "investor" from out of state to buy it. When the new owner ran into the same dead end, after more court battles, the town bulldozed the place and billed him for it, and accessed him fines for the time he was in non-compliance. Now he is suing the original owner, the realtor, his old lawyer, and anyone else connected with this fiasco. Caveat Emptor.

JFX001 wrote: 1) You cannot live there. 2) Possible boat storage, but no "commercial" traffic in and out. 3) No septic, no water...just electricity. 4) Previous owner made it really nice as a "home base"..local govt made them rip everything out and fined them 35K. 5) I believe the realtors name is Mary (nice)...the property belongs to her ex? FIL. 6) He had a nice car collection, plus construction equipment in the basement.

I don't know how I missed your post. Thanks for calling, I was planning on calling Mary today. I figured there was a reason it was so cheap, and the risk just isn't worth it.

If JFX001's info is gospel, then the realtor is flirting with an ethics violation in my book. Sounds like the whole scenario is a bit hinky.

But $9/sf is sweet. You could put a composting toilet in there and have a reasonable man cave.

modernbeat wrote: Now, if you want it for yourself, and it makes sense, and you can get the local govt to grant you a residential occupancy permit - then go for it. But as an investment - it's really poor.

This is my take as well. Something cool to have, but not an investment.

If near a lake, at least around my area, if you're under .5 acre, then you need to have an engineered septic system. At .33 acre (most residential lot sizes are .30-.35 acre) an engineered septic system should be rather easy to come by. If you're doing a single bathroom and kitchen, the septic system wouldn't be too elaborate.

Zoning is another issue. If you plan on making it a residential property, getting it up to code and getting the zoning changed is not impossible and easier than it sounds. You are going to have to make the property meet current residential guidelines. Once the property is deemed inhabitable, then you can apply for a zoning change. Again, this is in my area, may be different where you're at, I'd do some digging. Licensed contractors are REQUIRED to get all the permits and everything you need to help with this.

As far as an income property, a residential zoning is all it needs. (again, in my area, yours may be different)

I am a licensed real estate agent here in Texas, so that's where all this is coming from. LOL

The potential is there to make the property pretty friggin nice, but as stated, it's not so hot in it's present state. It's going to take some work, but it may pan out for you. Is there a possibility to purchase more land to get it up to that magical .5 acre mark?

Edit, just read all the parts about it not being habitable. Seems something's going on with this place. Might want to steer clear. LOL

Man, the more I look at that, the cooler it is! LOL I have 50 acres, need to build that here! The slab alone would be $40k+...

Conquest351 wrote: Man, the more I look at that, the cooler it is! LOL I have 50 acres, need to build that here! The slab alone would be $40k+...

I don't think I could even build it for that price, but I can't swing that much for a place to put my toys at this point in my life.

Me neither, that's what I'm saying. You couldn't replicate that place for the asking price. It's an awesome investment if it can be made to work. IF it can be made to work is the key phrase.

Hell...at least go and take a look and post some pics.

Mary was nice, we talked about 5 minutes.The couple that renovated it sold their house on the lake, bought an RV and wanted to use it as a home base.

I didn't get the story behind what went wrong with the local govt.

It's listed as residential so people won't think that it can be used for a commercial business.

I drove past it earlier this week and it is indeed huge, and pretty nice. There are 10 foot snow banks in front of it though. I may just take a ride back there this weekend and snag a few.

Stupid snow....