I just don't know what to do, there are so many options and combinations of options. I want to make the best choice but im not sure how much it all matters or if I am overlooking anything, especially financially.
Maybe you guys can offer me some insight. I will refrain from getting into details about the business itself. Eventually, I want some land to build facilities on and to use to offer other services and even open for visitors as a place to come but that stuff is probably down the line (and its not in my written plan) and I really only need a small facility to start with what I want to do. I can start with less land and probably a slightly more expensive facility that produces a little less for more price, but has an advantage of being easily moveable and easier to run (smaller). It’s around 10-20k more expensive at around 60k. I can possibly even rent a small space to put this on and not buy land to begin with at all, thats probably the most simple option.
The other option is to buy that facility and buy a two-family home for +/-350k. I can use the backyard for the 60k facility and rent out the units to pay the mortgage. The only issue is that once I am ready to expand I will need to buy another property, with land, an additional 100-300k. This will put me deeper in debt but I get to keep the rental property, which might not bring me any real income for a while if the rent is only enough to cover the mortgage ( i have to double-check). The benefit is that i have this in the future as an investment property and always have some side income. So to sum it up 60k for the facility that takes less space, and +/- 350k for the house ( the one I am currently looking at). This property will be useless for the business once I expand but I could hold it as a rental property. I’m not sure if this is just a stupid idea or not.
The other options are to just buy a property with the land I need. Either just land alone +/- 100 k for an acre around, or a house with land. Ideally, I would like land with a house that I can rent to help pay the mortgage and even more ideally an additional apartment or something I can convert to live in myself while renting the other, but this is harder to come by and the money would be better used renting out any additional units ( I live with my parents at the moment paying no rent). Budget of around +/- 300k. With this option, I can build a facility for 20 even maybe 30k cheaper at around 20-40k. One of the cheaper facilities produces a little more, while some produce less than the first option. With this option, I probably expand on this land not needing to buy more, and could rent the house or eventually live in it or keep renting it.
This is the gist of it, but of course, it gets a little more confusing when I start comparing facilities with price and production and operating costs of each one, but for the most part, the first one is mobile, and the two others that are a little cheaper can be built inside an existing structure (produce less than the mobile) or the whole structure can be built ( still cheaper than the mobile option and this one produces a little more) but gives me headaches of building permits and construction, although one property with land that i am looking at is zoned for it.
Starting out I hope for the business to do at least 20-30k/year until expansion, but it could do less the first year, maybe more but I plan for the worst-case scenario ( my numbers say more but there are some variables), so I guess we could just assume I am only going to break even at first? I also want to offer different products that I do not have a written plan for that could potentially offer me more income but would need more space and I probably cannot do this with option 1. I plan to expand after as soon as possible but that will depend on some unknowns and to what size depends as well.
Does anyone have any advice or insight for this type of situation?
Edit: I forgot to add that I have very little capital. The properties would be on a mortgage and I need a loan for the facilities as well. I have been pre approved.
[link] [comments]
