For arguments sake lets just say the Save The Children building is 54,000 square feet. If the the building was sold for $300. dollars a foot that would bring the cost to about $16,200,000. million dollars. If one was to construct 27 condo units–each unit could be 2000 square feet. If construction costs were about $400. per foot that would bring the total investment to $37,800,000., or $1,400,000. per unit.
Now, if one were to approach a bank and borrow 40 million for five years the bank would charge interest of about 5%. The payments would be $754,848.oo per month for sixty months. We’ll just leave taxes and insurance out of it for now, one would be paying back 45 million to the bank. The cost is 5 mil to borrow 40 mil for 5 years. Bringing the cost per unit to $1,677,440.oo per unit.
So if each unit (or condo or townhouse) sold for 2 million the investor(or speculator) would achieve a $322,560.oo profit per unit. At 27 units that totals $8,709,120.oo total profit assuming all the units sold within the 60 month term of the loan.
I would do the deal but my credit isn’t that good. Also, not sure you can get 2mil for a condo. I would probably try to get the property for less than 300 per sq foot, maybe 250 would be more realistic. Maybe one could get a lot more square footage out of it, it is lower than the other buildings next to it. Get a private investor so I didn’t have to make the monthly payments and promise to build the walking bridge so the town didn’t get in the way. I have no idea what planning and zoning would say about it. My guess is it sells for 13.6 mil, just a guess.
All it takes is one call to the broker, a meeting at the bank, attend the closing and hire the construction company. Sell it off to a REIT and walk away with 4.2 million in two weeks.
In reality though think about all the children around the world who get a piece of that 15 million for the sale of the building!