Corner of Seaton and North Capital, NW (1822 N. Capital Street).
Play ball with me.
There is a property on the corner of North Capital and Seaton Place (or is it street), NW. It currently houses the Seaton Market. It is expensive… if one were to go it alone….but wait….YOU, BLOOMINGDALE, are not alone.
Last week I presented three possible scenarios for helping to improve North Capital Street, and by extension, our Bloomingdale.
What if we, as neighbors, did form an LLC (limited liability corporation) as a non-profit? Say (for easy math), we could get the property for $1 million (it’s been on the market for over 150 days). If 10 investors came forward with $10,000 each we would have a down-payment of 10%. So we would mortgage 900k. (again, this is a game, right….maybe 10k is too much/too little).
Next, we hire an architect. We present the plans to a bank and apply for a renovation loan. I am familiar with a renovation loan because that is how my husband and I were able to afford to renovate our home. The renovation loan is generally based on how much the property would be worth once the renovations are complete. If we applied for a $1 million renovation loan, would the property be worth at least the cost + renovation (so 2 million). If yes, then it’s a go (of course, remember, this is all play right now…so there would be more to think about).
What would a 1.9 million dollar mortgage payment be if it were shared by 10 investors? Well, at 6% interest, 30yr fixed the total mortgage would be about $9500 per month. If that were divided by 10 investors, it would be $950 per month per investor.
Now, what if, in the example of the Seaton Place property, we found a tenant to rent the top floor (approx 1600 sq feet). Perhaps we could rent it for $2500 per/month. And what if we found a business (restaurant, yogo studio, garden ctr…anything that Bloomingdale needs) to take over the first floor. Could we charge $3000/per month (more? Keep in mind that one of the reasons Pyramid’s Restaurant closed was that the rent had increased to $5000/month). So, now we have an income of $5500/month…and a remaining mortgage payment of $4000/month divided by 10 investors…so $400/month.
Would anyone play ball…how many of us could realistically afford this? And should the initial investors be silent, or should the initial investors have to commit to 5 years of their ‘seed’ investment…or have to understand that it may not work and they could lose their seed money.
Think about it. Perhaps we could do something as neighbors. Perhaps we live where we live in order to be able to make a difference. Would we even be having this conversation if we lived in Georgetown ....or a more affluent part of town? Hmm.