Just to bounce an Idea off you all?

[exploited]

The only thing in the Retail that we would run, is my Wife wants to run a fitness center. The other would be leased.

It is not my First Rodeo, and you might have missed that it is in Lansing Near the Capital. Politicians and Lawyers abound as well as university Big shots. The Client base is there.

Renovation costs are being worked up now, but it will be LOTS! And because I don't borrow money, I will likely Sell off our Distribution business to pay for it. I have had a company bugging me for years to purchase it.

The Retail space will rent for about $60 a square foot, the Units for about 2800 with of course the Fitness center and Office for the Building taken out of that space. Still room for 4 very large stores, or 6 smaller boutique stores. We would likely look for 5, and would seek out people in the area with developed high end businesses already in place. Because we will be build to specs the ideas are endless. But a Salon would be Great. Mens and Womens high end clothing, Interior Design Firm would be cool You get the idea.

I would be a partner with the Chef, whom I already know and is on board, so annual revenue would be in the mid 7 figures. Net about 25% of that after taxes.

Sounds like an overall good idea, although selling an already profitable asset to do it is risky. Just make sure you check the math and don't let costs get out of hand.

[zelmo1234]

Profits are far better opening a Bar and the overhead is much lower.

But if you can keep more that 50% of your revenue coming from other than Alcohol? You insurance is about 1/3

We will have a very top shelf Bar, Craft Brewed Beers with the excepting of one? Bud Light or Miller Lite Have not decided, And a killer Wine selection with Sommelier on Staff. It will take about 3.5 years to get it up and going.

[zelmo1234]

Sounds like an overall good idea, although selling an already profitable asset to do it is risky. Just make sure you check the math and don't let costs get out of hand.

It is riskier to borrow money. The property when completed will be worth Millions. And Distribution is a dying business. Plus I am bored with it, and it is worth about as much as it will ever be worth.

[TrueBlue]

What do you think about the dinner Idea for the restaurant?

Don't sell yourself cheap. If the customers are the type who can afford it, shoot for the moon! But be sure that the food is A-1 and always prepared fresh by the finest chefs around.

[exploited]

It is riskier to borrow money. The property when completed will be worth Millions. And Distribution is a dying business. Plus I am bored with it, and it is worth about as much as it will ever be worth.

Yes and no, depending on how you structure the company. Borrowing money as a corporation will allow you to take full advantage of bankruptcy protections, as well as let you claim losses to reduce your tax burden. This, by the way, is a favoured Trump strategy.

[zelmo1234]

Yes and no, depending on how you structure the company. Borrowing money as a corporation will allow you to take full advantage of bankruptcy protections, as well as let you claim losses to reduce your tax burden. This, by the way, is a favoured Trump strategy.

You don't have to borrow money to have all of those protections.

Please don't ever fall for you need to have a mortgage for the Tax Deductions. Liberals are notoriously bad and Math. But you need to put a Calculator to it.

[zelmo1234]

Don't sell yourself cheap. If the customers are the type who can afford it, shoot for the moon! But be sure that the food is A-1 and always prepared fresh by the finest chefs around.

If it were DC I could go much higher. We have not decided but the idea is 2 bedroom with Office, not extremely large, State legislators are not always Wealthy, and we need to stay close to their budgets so they all can a afford it.

But Building it correctly the right luxury products, we can get 2 more units per floor. The other options is to make them larger and loose one unit per floor, the revenue remains about the same. But the Retail units are worth more if there are more tenants

[Dr. Who]

The Chef currently owns and un used Liquor license !

Not an issue.

I think that we will open with our full complement of offerings. It would be a shame to let anyone not understand the full services. for example because of the Area, we are applying for Cigar Bar Status. So we will have a separate area were people can smoke cigars and drink their scotch

Not to be a naysayer, but the restaurant business is the most fickle in the retail world. In between McDonalds and Wolfgang Puck, lays the detritus of failed restaurants. Restaurant patrons, particularly in the moneyed world are fair weather friends. As long as you are new and the latest thing, you are popular. The minute you become that OK restaurant, you are doomed, unless you have a chef with a name and that is pricey. Just keep in mind that retail in general is struggling to keep it's head above water, and retail clothing and restaurants are the first to take the hit in any recession. If I wanted to keep tenants long-term, I would rent to lawyers, doctors and dentists.

[zelmo1234]

Not to be a naysayer, but the restaurant business is the most fickle in the retail world. In between McDonalds and Wolfgang Puck, lays the detritus of failed restaurants. Restaurant patrons, particularly in the moneyed world are fair weather friends. As long as you are new and the latest thing, you are popular. The minute you become that OK restaurant, you are doomed, unless you have a chef with a name and that is pricey. Just keep in mind that retail in general is struggling to keep it's head above water, and retail clothing and restaurants are the first to take the hit in any recession. If I wanted to keep tenants long-term, I would rent to lawyers, doctors and dentists.

I totally agree, the Chef has a name, and a following, and he is not expensive, because he is a partner. I Set up the Venue, he pays Rent! And I get 10% of the net profits for my investment. The reason for the Change is he has a Family now and wants some evenings off.

So this is the new feature, he runs his old business through trained employee's and now only works 3 nights a week. He is in the Restaurant Business, I am in the Rental business. And While we are partners. I own the location, and he owns the name, liquor license, and staff.

We both stay in our comfort zone. I just need enough information to make sure it is a good investment. Absolute worst case? I turn the floor into more Rentals.

And of course the smaller the risk, the smaller the reward. That is why most people never make it. They are afraid of Failure.

Look at those that oppose changing the SS programs to investment base. They have a strong fear that they will loose money, and yet the very place that they plan to loose it, is the same place rich people use to grow it.

Close your Eye's Who and take a leap of faith. It will set your soul free.

[Dr. Who]

I totally agree, the Chef has a name, and a following, and he is not expensive, because he is a partner. I Set up the Venue, he pays Rent! And I get 10% of the net profits for my investment. The reason for the Change is he has a Family now and wants some evenings off.

So this is the new feature, he runs his old business through trained employee's and now only works 3 nights a week. He is in the Restaurant Business, I am in the Rental business. And While we are partners. I own the location, and he owns the name, liquor license, and staff.

We both stay in our comfort zone. I just need enough information to make sure it is a good investment. Absolute worst case? I turn the floor into more Rentals.

And of course the smaller the risk, the smaller the reward. That is why most people never make it. They are afraid of Failure.

Look at those that oppose changing the SS programs to investment base. They have a strong fear that they will loose money, and yet the very place that they plan to loose it, is the same place rich people use to grow it.

Close your Eye's Who and take a leap of faith. It will set your soul free.

So, a medical center wouldn't pay as much? Restaurants and retailers operate on a small margin, even the successful ones, so they try to keep their overhead down. Not so much the medical profession. A medical center from my perspective would be a much better tenant and you wouldn't face potential lawsuits, because the owners of buildings that lease space to any licensed establishment also get sued if any overservice or liquor fueled violence breaks out even if you have absolutely nothing to do with it. Also, and I will weigh in from the insurance perspective, restaurants are a fire hazard, so you will pay higher insurance premiums if you have a restaurant on the premises. In fact, a medical center and a gym would make a lot of sense. They have a commonality in health. Add in a pharmacy and you are made in the shade. It's all far more boring, I know, but they are guaranteed low risk rent payers.