Possible studio purchase...Need advice!

eric-holmes · Apr 9, 2011

I live in a small town, 1,900 people, which is 5 miles outside of a larger town, 40,000 people. Today I was driving to work and I saw a building for sale on the main street of my town. It is right on the main road, right beside the water department and courthouse, right across from the bank. Now, like I said, this is a small town. Aside from what I mentioned there is not really any other businesses.

Onto the specifics, the building is 2,600 sq ft. and and they are asking $12,000. I peered into the window and it appears to all be sheetrocked. It used to be the Masonic lodge before they closed, so I know it is wired and plumbed. It has a small "secretary" area set up in the front and then a hallway leading to the back with larger rooms. I know it is small town but it seems cheap. People pay 12,000 a year to lease buildings this size in the larger town.

Now for my questions. What would you do in this situation? Do you think people would drive 5-10 miles or 10-15 minutes to a studio? I mean this thing could be paid off in 5-8 years. Then it would be practically rent free aside from utilities. Just looking for a smart business man to help me out and give a little advice.

Thanks!

Derrel · Apr 9, 2011

Good Lord, JUMP ON IT NOW! $12k to BUY it outright? On the main drag, across from the courthouse and the bank???? Even if it's a dump that investment is a pittance.

eric-holmes · Apr 9, 2011

But when I say beside those things, It's a town of 1,900. Very small town.

eric-holmes · Apr 9, 2011

I called on the building. It has an old flat roof. This building is probably 30-40 years old and it has one of those flat roofs. Well, it's leaky. Approx 8k to fix it.

c.cloudwalker · Apr 9, 2011

My first reaction is: skip it! Cheap buildings are cheap because there is no money coming through the area.

But then again there is not info enough in your post. There again #2 is that there probably never will be.

You need to analyze the situation very carefully, ie have someone do a traffic count type of thing to start with, maybe. That will give you a first idea. But it won't be enough. You will then need to analyze buying habits in your area. Will people go 5 miles out of their way? Etc, etc.

I once lived in a small town of slightly under 5,000 people only a few miles from a larger one of 25,000. People from the larger one did not come to ours because because they saw us as hicks... It didn't matter what we had to offer. And we had the best fooking pizza in the area... :lmao:

There is a lot more than a cheap building.

Not to say this is not a possibility but no one here can really tell you one way or the other.

KmH · Apr 9, 2011

You'll need to do way more than just peer in the window before a bank will lend money to buy the place.

Don't forget to add what it will cost you beyond getting the roof repaired to get the place ready to open.

By the same token, you may be able to barter for some of the work the building needs and/or you may be able to do some of the work yourself.

Bitter Jeweler · Apr 9, 2011

All that, and, how much will you need to spend to even try to attract the people of the larger town? Speculate what the return on that continuing investment will be.

My personal opinion, is to set up shop where the people are.

eric-holmes · Apr 9, 2011

Taking. Risks. Sucks. Period.

Bitter Jeweler · Apr 9, 2011

Yes. Yes it does.

eric-holmes · Apr 9, 2011

Bitter Jeweler said:
All that, and, how much will you need to spend to even try to attract the people of the larger town? Speculate what the return on that continuing investment will be.

My personal opinion, is to set up shop where the people are.

This is all very true. But even after that, to have a shop thats totally yours for around $20k on a main street is pretty darn good. Thing is, the larger town is rapidly expanding. As it does, people seek out land in my town to have a little privacy. I speculate that one day the larger town will rapidly become big enough that my town will become almost like a part of that town. Almost like it will consume it.

Bitter Jeweler · Apr 9, 2011

Thats why it was my opinion. :sexywink:

The flip side is, if you can manage it, and it is an acceptable risk to you, go for it!
A friend told me, when thinking about striking out on my own, to draw up the worst case scenario. Really look at it, and see if the worst case is acceptable to you.
For me it was loosing my house and moving into an apartment. I hate my house. So I took the risk!

It's a great deal if you think that area is going to gentrify. In the long run it could be the best decision you ever made.

Good luck to you, sir. Nothing ventured, nothing gained. :thumbup:

Rocan · Apr 9, 2011

if its good enough, people will come. set it up right; contact some professionals and rent the rooms out to them for an hourly rate. then also have a room for yourself where you hold your own sessions. if its within an hour of a large city, then people will come.

Derrel · Apr 9, 2011

One thing you'll find out about building repairs is that there is a "quoted price" to repair something, and there is the do-it-yourself price. In the case of a flat-roof building, and $8,000 roof repair estimate is outrageously high, compared with the DIY cost. It's like a rooftop moss removal on a one-story, 2200 square foot home: $500-$650 for a contractor to spray the roof and kill the moss, then remove the dead moss. The DIY cost of this project? $59.99, and two weekend days.

How much roofing can you buy for $2,000 at Home Depot right now? I highly doubt that the roof even needs a tear-off...you could probably slap a new one on right over the old roofing. Not sure where the $8,000 roof repair cost came from, but most likely a quote from a contractor looking to make a $3,500 profit on a simple, fast, ONE-DAY tear-off and re-roofing job.

Propsguy · Apr 9, 2011

The investment is so small that it might be worth considering an alternate business plan... Buy the building and use it for something else (I don't know what, but something less risky than a photography studio), that has a very low starting investment, and use that revenue to fund the future development of a studio, if it looks like a wise transition...

For 12K, I'd buy it just to put all my crap in...

sierramister · Apr 9, 2011

IT depends on his meaning of "flat". If it's flat as in a 2-12 or something and with shingles, that's an easy job. But if its flat as in flat on top of a commercial building, applying tar might be a little more expensive.

Derrel said:
One thing you'll find out about building repairs is that there is a "quoted price" to repair something, and there is the do-it-yourself price. In the case of a flat-roof building, and $8,000 roof repair estimate is outrageously high, compared with the DIY cost. It's like a rooftop moss removal on a one-story, 2200 square foot home: $500-$650 for a contractor to spray the roof and kill the moss, then remove the dead moss. The DIY cost of this project? $59.99, and two weekend days.

How much roofing can you buy for $2,000 at Home Depot right now? I highly doubt that the roof even needs a tear-off...you could probably slap a new one on right over the old roofing. Not sure where the $8,000 roof repair cost came from, but most likely a quote from a contractor looking to make a $3,500 profit on a simple, fast, ONE-DAY tear-off and re-roofing job.