We are buying ours...... A few good tips already noted. Setup a separate LLC that you (or you and your wife) own and buy it under that. You then rent to your
sign business. As mentioned it gives you some protections by keeping the property and the
sign business as separate businesses. Also as JJM mentioned there are some things that you are going to need if you are going to get a commercial property mortgage and it is a VERY slow and expensive process when compared to a traditional residential mortgage. The two environmental studies are pretty expensive as is a commercial appraisal. We made the jump about 3.5 years ago going from just 1500 sf that we were renting to a property with 3 buildings totally 21500 sf!! My electric bill here is more than my rent was there.... However for me it was a "in the right place at the right time" thing and we got an incredible deal. What made it an amazing deal was we found a property that was a bank owned repo. That ended up saving us a ton in more than one way and is something I'd encourage you to look for. Since the property had been foreclosed by BOFA it ended up sitting empty for a few years.... First for the prior owner to go through bankruptcy then BOFA had to go through the whole foreclosure process and take possession and title. Part of the process was that BOFA had both the phase 1 and phase 2 environmental studies done and they were willing to provide those to us which our bank accepted as being recent enough to not require us to have those done. So we only had to pay for the commercial appraisal. The other key thing was that BOFA is not in the business of sitting on commercial property and when they finally had the foreclosure process completed they listed it for sale through a commercial broker. What is key here is what BOFA set as the asking price..... they just wanted what they were still owed from the prior owners mortgage. For the property we have that was literally only 1/3 of its value! The prior owners had already paid off two thirds of the value. That was also a key element for us and allowed us to get a much larger property than we really needed. A commercial mortgage is going to require a LOT more "skin in the game" ie. down payment than a residential mortgage. With the loan to value ratio so much in our favor that made things a lot easier to pull off.
So - look around hard for bank owned properties. Banks down want to sit on empty properties. It seems just about any other property the owners would rather it sit empty for ten years rather than reduce their asking price. There are a TON of other things to keep in mind as well. Since you are not renting, when something breaks its 100% on you. HVAC went out, get ready to pony up some $$$$. Property taxes are of course on you. The insurance you want is in a whole different ballpark than renters insurance. If you have an inside bay then a shop keepers policy is a good idea which is not very cheap on top of your commercial liability, umbrella policy, etc. The larger the property, the more the maintenance and the more that can break and need repairs and it can all get VERY expensive. Just maintaining the outside of the property can be a lot to do like landscaping, keeping the parking lot clean, grass cut, etc. Look very very close at everything. Check the property records and determine what the zoning is and allows for. Consider future use as well... Look close at things like storm water drainage, does it end up with a small pond in the front parking lot when it rains? Are things up to code like the electrical and plumbing? Is the parking lot asphalt and is the asphalt in good shape? Repaving is not cheap.... Look at things from a security point of view as well. A lot of things you will be able to "build to suit" yourself under the radar of the local building officials but modifications beyond certain points like significant electrical modifications, plumbing/sewer modifications, etc. will require building permits, licensed contractors, possibly stamped architectural drawings, and inspections. Prior to full use you will need the local building official to
sign off as well as your local fire Marshall (you are going to need a buttload of fire extinguishers all over the place as well as clear exits). Both will need to do an inspection. I'd suggest getting them in BEFORE you start on any modifications if you plan on doing said modifications yourself in private. Oh, going to need a trash service to bring you a dumpster in... Its a LOT to consider very carefully when looking at a place and you better consider everything you possibly can as surprises can be very expensive.
Do I have any regrets buying? No not really but it has been a monumental task and I am still working 70+ hours a week since we got the property just keeping up with everything. Two of the buildings were just storage. One just under 10000 sf which I am slowly working on finishing out about 4000sf in the front into business/office space. I plan on leasing that entire building out.... The third building is a long narrow 1800 sf storage building which I am just storing tons of crap in.
