Here is a great opportunity for someone to create a live-work space in Buffalo's most stable east side neighborhood. This building at 321 East Delavan Street (google map) was built in 1926 by Louis Spiegel with twin storefronts and two apartments upstairs. While the building does require rehabilitation, it's a much easier project than 363 Genesee Street and because of it's location in the Hamlin Park Historic District, rehab expenses are eligible for a 20% to 40% tax credit.
The owner of this building currently owes about $2300 in taxes and user fees on the property and is willing to let it go for covering that payment and an additional $5000, but I have a feeling with some thoughtful negotiation that price could come down. If not, you've got a high visibility location, in a stable neighborhood, and adjacent to the Kensington Expressway for about $7500 that requires work.
The roof seems fair for the immediate future, but there is a leak towards the rear as evidenced by the failing plaster on the rear wall and the soft floors in the second floor bathrooms. The basement is completely dry and appears to only be a partial basement. The storefront configuration remains intact including large transom windows, plate glass displays, and a recessed center entry.
Tin ceilings remain throughout the first floor, but there has been some damage due to water infiltration. The apartments upstairs are in great shape towards the front, but the rear portion require attention, once again because of the compromised roof. Any interested party should expect that all new utilities need to be installed and some small portions of the floors need attention.
One of the best parts about this deal is the opportunity to utilize the historic tax credits for rehabilitation work. There are two options for this property, classify the project as a personal residence (not an income producing property) for a 20% homeowner tax credit or classify it as commercial (an income producing property) for a 40% commercial tax credit.
If we assume the building needs $40000 then the 20% path would yield a $8000 tax credit, while the 40% path generates $16000 in tax credits. The 20% homeowner tax credit comes from the state, while the 40% commercial tax credit has 20% from the state and 20% from the federal government.
The tax credits are applied to your state and/or federal income tax, so if the amount of tax credits are equal to your incomes taxes for the year you claim them, you don't pay taxes that year. However, If you have credits left over you can carry them forward twenty years or until they run out. Tax credits don't mean cash, unless you are going with the 20% homeowner tax credit. In that scenario you only earn tax credits applicable to your state income tax, but if the credits exceed your taxes, you get the difference back to you in a check. The federal credits do not have this refundable aspect to them.
This building is perfect for a number of different small enterprises. You could turn both apartments into one large master unit and utilize the storefronts for your own small business. A great little restaurant would go well in the neighborhood and would probably make a killing since there are not many nearby available dining options. Combine the revenue from a restaurant with one or two apartments and this building practically pays for itself if you're smart about how you do it. The building next door is also for sale currently with an asking price of $45,000, check it out here for the listing.
If you have an interest in this building please get in touch with me via email@example.com. For additional photos of the property check out my Flickr page.