How can you know if a property is safe to be on? I ask because my friend, who graduated a couple of years ago, recently bought an old office building. He’s trying to fix it up and rent it out–the first step toward what he’s convinced will be a commercial real estate empire. But I have my doubts. The place he’s buying is old and in disrepair. He says it has asbestos issues, which I had assumed meant the place had to be knocked down! The roof is terrible and leaks, the windows are all busted, and I just can’t figure out how he’s going to make money off of this place. I think he should sell it again and get out, but I don’t know how to tell him. What should I do?
Hey, not so fast–it’s not a sure thing that your friend’s property is beyond saving. Nothing that you mentioned is necessarily a death sentence for an old structure, say the contractors at AAA Superior Construction. Things like new roofing and siding can bring an old property back to life, as long as the building itself is structurally sound. If there aren’t unfixable issues with the foundation or the structure itself, your friend should be able to revive the property.
The asbestos issue is a serious thing, say the asbestos remediation support project managers at Forensic Analytical. But that, too, can likely be fixed. The fact that your friend is aware of the issue is the first step. Now he just needs to make sure that the asbestos remediation process is handled properly by professionals who know how to do the job safely and legally. Nothing in your letter suggests that your friend won’t do that.
All of these repairs will be pricey, of course. But that doesn’t mean your friend’s business is doomed. His improvements will be a business expense, which will give him some breaks when tax time comes around. And if for any reason he decides he can’t make the repairs, well, he’ll still own the property even if he chooses to knock the old building down and rebuild.
Real estate businesses can be tricky, and there’s no guarantee that your friend will make money. But the real estate market is doing reasonably well right now, and the fact that the property was in disrepair when you friend purchased it is not in and of itself a reason to worry about his business sense. Plenty of people buy fixer-uppers, and some even flip houses for a living: 2016 marked a nine-year high in the business, though it’s still easy to lose money flipping homes. It is, of course, perfectly possible for your friend to lose money on his real estate investment–but from the sounds of things, there’s no reason to be immediately concerned with his sanity. While we can’t be sure without knowing more about the purchase price, location, zoning, and condition of the property, it seems likely that your friend is doing just fine. There’s no need to worry on his behalf.
“It is not the beauty of a building you should look at; it’s the construction of the foundation that will stand the test of time.” — David Allan Coe
