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Making Life Changing Decisions again


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#1 Eddie Z

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Posted 20 January 2013 - 12:59 PM

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I'm toying with the idea of purchasing this building for my part time catering business.    (Rockaway Boro, NJ)

 

I can write 5 pages of reasons why I should go forward.    Then I can write 5 more pages of why  I shouldn't.  

 

But if I do go forward, it's a seriously life changing event.     Means that my catering business can no longer be treated like a Hobby.    Means that I'm "all In"...no more free summers for the rest of my life.     Huge Quality of life issues here.      And a good helping of Financial risks too.     

 

"Be careful for what you wish for, you just may get it", as they say..



#2 little frog

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Posted 20 January 2013 - 01:02 PM

do you have a business plan? how is your catering business doing so far, as in, how much demand are you generating?



#3 Eddie Z

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Posted 20 January 2013 - 01:09 PM

The building is listed at $240K.    The property contains the 1500sqft white block building and the decrepit yellow/green house.    The house has asbestos tiles, and may be so water damaged/old/decrepit that it might be best to tear it down completely.    I'd have to establish connection to city sewer.     This property was formerly part of an oil depot complex, but at some point, the property was subdivided and sold.   The Oil complex remains next door.    This forces environmental testing to be sure I'm not stuck with a Million Dollar cleanup.    I'd have to pave the lot.    Then I'd have to set the building up for catering ops;   Electric Upgrade.   Walk In refrigeration.    Massive dish washing center, with floor drains, tile floors, etc.     Set up some enclosures inside for dry goods, cleaning products, and perhaps some small officespace.       Oh yeah, I'd have to buy a refrigerated van, and perhaps more trailers.     The property currently does NOT allow "Outdoor storage" meaning I could NOT park my trailers there unless I get approval from the Board of Ajustments.     The sale would have to be contingent upon that approval, making the sale somewhat complicated.



#4 Eddie Z

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Posted 20 January 2013 - 01:12 PM

do you have a business plan? how is your catering business doing so far, as in, how much demand are you generating?

I don't have a business plan...other than to just go forward.       At it's current level, the catering business would be operating at a break even rate here.   Meaning I'd make just enough profit to carry the facility.      But with the building, I have the potential to develop additional income streams.          The equity will come from my eventual ownership of the building outright.      



#5 Tabbooma

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Posted 20 January 2013 - 01:42 PM

Slab on grade with floor drains, would need to collect oils, greese, etc, no? A friend of Tabbooma's owns a fish market but a huge part of his businees is throwing clam bakes, makes a real good buck from it, has a couple real trusted workers he pays well that ensures he is not doing all the bakes.. What about soil contamination, any liability there from past business... Guess if not touching or digging outside you would be okay, look for any underground tanks too... If all clear Tabbooma says go for it :)



#6 moed_over

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Posted 20 January 2013 - 03:03 PM

You should do your best to make some estimates first about your future potential revenue, taking into account how much business you were turning down before, to make sure you will have enough business to make it worthwhile.

 

Just breaking even for the next fifteen years would suck, and you would get tired of it. 

 

I'm not saying not to go for it, because it could turn out to be awesome, but I am saying that you should be careful....



#7 noro

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Posted 20 January 2013 - 04:22 PM

Most of us need to take risks in order to be sucessful.

That said, I'd be real careful with this property.

Sounds like a lot of obsticles and a significant startup investment to get up and running in addition to the purchase of the property.



#8 Eddie Z

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Posted 20 January 2013 - 04:27 PM

You should do your best to make some estimates first about your future potential revenue, taking into account how much business you were turning down before, to make sure you will have enough business to make it worthwhile.

 

Just breaking even for the next fifteen years would suck, and you would get tired of it. 

 

I'm not saying not to go for it, because it could turn out to be awesome, but I am saying that you should be careful....

 

Kind of tough to speak details in this forum.    I'd end up writing an essay which nobody could read anyway.  

 

I'm trying hard to be careful here, but the business planning seems like trying to look into a crystal ball as there are many factors that I don't control.        The building allows income streams that were never possible before.     My senses tell me to go forward, but to some extent the business planning may have to be done with hindsight.       It's like jumping into a pool, with the confidence that you'll learn how to swim. 

 

Years ago, I was frightened when I bought my home.     I did it anyway, assuming it would turn out for the best..    It turned out to be a very smart financial move, made my life easier, and allowed a good bit of personal growth in ways I didn't anticipate.   I'm kind of assuming the same will happen with the purchase of a building.  



#9 Eddie Z

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Posted 20 January 2013 - 04:31 PM

Most of us need to take risks in order to be sucessful.

That said, I'd be real careful with this property.

Sounds like a lot of obsticles and a significant startup investment to get up and running in addition to the purchase of the property.

 

Trying to get a handle on all of those startup costs now...I've got about 75% of the data I need..     Many of the obstables are typical and surmountable though.    I just have two potential showstoppers that I know of:    Environmental Contamination and Outdoor storage. 



#10 Shake Yer Bones

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Posted 21 January 2013 - 01:39 AM

Love your idea but am cautious of the building. It's one thing to renovate a building to fit your business, but the environmental aspect of this particular building seems like it could be very costly. I'd look to the NJ state agency that handles environmental stuff. I believe here in NY, the party that contaminated the soil can be held responsible for cleanup, no matter who owns the building today. It's happened here in Rochester recently with some buildings that used to house dry cleaners. Point is, the state may be able to help with getting that contaminated soil cleaned.

 

And if that house needs asbestos abatement, that ain't cheap either. But I'd think you'd be on your own with getting that sorted out. 

 

I love it when people go into business for themselves and wish them all the success in the world. Maybe another building is the answer? 



#11 scarfire

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Posted 21 January 2013 - 07:17 AM

no more free summers for the rest of your life makes this a very tough decision. 

 

i live for summer and it's various activities. at this stage of my life (i believe we're close in age) i'm looking to slow down

and smell the roses.

 

but that's me. everyone has different priorities and if the catering life is your passion then

go for it eddie!



#12 Eddie Z

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Posted 21 January 2013 - 02:52 PM

no more free summers for the rest of your life makes this a very tough decision. 

 

i live for summer and it's various activities. at this stage of my life (i believe we're close in age) i'm looking to slow down

and smell the roses.

 

but that's me. everyone has different priorities and if the catering life is your passion then

go for it eddie!

 

I'm 50.   I retire from a professional engineering job in 6 years.  (so I'm not forced into this).     I think the catering business would be an excellent retirement activity.

 

By separating the business to a commercial building, an added benefit is that it will be a "turn-key business", meaning I can sell the whole operation when the time is right.   Much harder to do if it was based at my residence.

 

You're on point though.     At the very core of my dillema is "Quality of Life" issues...   "Smell the Roses" vs "Follow a Passion"?    "What defines a successful life?"   Is it all about hard work?   is it all about relaxing?      Do I really want to be the richest guy in the graveyard?

 

I really suck at making complex decisions like this.  I always have.  



#13 TEO

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Posted 22 January 2013 - 04:40 PM

All best with this decision.

 

I would keep the over all economy and where you think it is heading in mind as well.



#14 Mutant

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Posted 22 January 2013 - 04:51 PM

Those buildings looks like money pits to me.  It would take tens of thousands of dollars to convert either one of them into a viable commercial kitchen IMO. 

 

I'd keep looking if I were in your position.  Best of luck in whatever you decide to do. 



#15 Eddie Z

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Posted 22 January 2013 - 06:37 PM

I continue to do my "due diligence" on it.    

 

The seller wants $240K.    it'll take $13K to remove the small structure with asbestos shingles.    Will take about $5K to get the city sewer connected.  $6K for 3-phase electrical upgrade, probably $4k to pave, $2k for the Phase 1 environmental study.   Will take another untold thousands just to get an engineer to draw up plans and legal.     To own the building and get the basics attended to, the real cost of the building is about $275K.      I estimate another $60K to establish a commercial walk in fridge, do the severe plumbing needed to support the dishwashing.   Interior construction.   paint/repairs..  And to piecemeal together a small commercial kitchen.      We're in the $335K range to get back in business.     Likely more. 

 

These are not outlandish dollars for a building in this area, even with the added investments.     But it's still a significant investment on my part, especially since my business in it's current state barely warrants it..    Problem is, the cheaper bigger buildings are much father away, and have their own set of issues.     This one speaks to me.



#16 Lostsailr

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Posted 22 January 2013 - 11:18 PM

Sounds like you are motivated for this.  If you want to make the shift in your vocation as retirement nears, this seems great.

 

As  mentioned earlier, be sure to have serious environmental testing done.  If you get stuck with a mess, the ending could be devastating.

 

good luck in your decision making... I dream of being able to make a shift in gears such as this.