Possibly purchasing my late friend's turn key darkroom / studio....

[Kodachrome25]

Hello,

A few weeks ago a friend of mine who was a retired physician and an avid photographer employing traditional & alt process sadly passed away at age 74 due to cancer. Among his estate he left behind what I consider to be one the nicest darkrooms I have ever seen. He purchased the 680 sq. foot space in a business park in our extremely expensive resort town for about $345,000 in 2005. He then proceeded to outfit it with all the best equipment, LPL4450 XLG, Jobo Autolab 800, ATL 1000, brand new 30” deep Leedall sinks, etc. The ventilation and climate control system is incredibly functional although not surprising for a man who held 29 patents. He was so OCD about dust in our hard to dust proof region that he kept all his LF lenses in ziplock bags in his photo backpack.

So the total tab on the darkroom and renovation to the commercial space was close to 100K in addition to what he paid for the property. Basically I have been struggling in my tiny 15 sq. foot closet darkroom in that it is just not cutting it on several levels, proper ventilation being one of them. I was asked if I could be hired to help catalog and value the darkroom end of the estate but it has dawned on me I might try to get an SBA or other type of loan and buy it outright, selling items I don’t use or need and having a proper darkroom to both create my own work and hold workshops.

The family is willing to work with me, I am no longer part of the cataloging and valuation process so I am starting to work towards buying it at my wife’s insistence to at least try. What I am wondering is that since I am pretty much the ideal person to buy this, what leeway might I expect if were to make an offer for all of it turnkey? If I were not the party to buy the property, it would have to be completely gutted and brought to a point that it could sell in a generic sense. The darkroom and camera equipment would be dealt with in a manner consistent with how estate sales would usually go. So the process of selling it to the general public might take a lot more work, hands in the pot of the sale of the property / equipment.

I also feel like my friend’s hard work and vision would be put to good use in eventually becoming a place of learning in passing forward the art of the darkroom. I am sure as heck not going to be able to low ball them and to be honest, I would not be surprised if the sale price on this all inclusive tipped the scales at a bit over half a million, a huge investment for my wife and I considering we don’t own any other real estate.


This is niche inquiry and one heck of a long shot, but man…I have to try.

Any insights on this would be appreciated.

[Kodachrome25]

A couple more views of the studio / darkroom space, showing the ventilation ducting on the ceiling, etc...

139338139339139340

[John Olsen]

Any fair offer on this deluxe facility will be unrecoverable in future income. It's simply too good for the real world. It may break your heart but don't try to buy it.

[Kodachrome25]

Any fair offer on this deluxe facility will be unrecoverable in future income. It's simply too good for the real world. It may break your heart but don't try to buy it.

I'm not sure I follow you, this is for my business as a photographer, a profession I have been doing full time since 1990. The need for a professional level darkroom has been on my radar for nearly ten years, it will help me diversify revenue streams.

Are you saying that I can not earn additional income from the output this will allow me to produce?

[jp]

A lowball offer is just right. But I understand not wanting to do a lowball offer because you're close to everybody, etc... The equipment is not currently valuable, even though it's nice. An example is the ventilation, which is probably more labor than materials to setup. Big enlargers don't sell for much because they are tough to ship and not much demand.

[Kodachrome25]

A lowball offer is just right. But I understand not wanting to do a lowball offer because you're close to everybody, etc... The equipment is not currently valuable, even though it's nice. An example is the ventilation, which is probably more labor than materials to setup. Big enlargers don't sell for much because they are tough to ship and not much demand.

I tend to agree and I don't think in this case a low ball offer is really low ball. I think they know this too that is why they are very open to working with me. I am cautiously optimistic.

There are several angles of financing this I am approaching this from as well so we'll see.

[Liquid Artist]

I don't want to agree with John but he's right.

Unless you get paid an insane wage, and have somehow guaranteed your income. You may have to give something up in the future.

What I would do if I was in your shoes is buy a house more suited to my needs. Then buy the darkroom equipment separately.

[Peter De Smidt]

I hope that it works out, both for the family and for you!

[DennisD]

Kodachrome25

That darkroom & studio is indeed a dream come true. It could also be a noose around your neck !

Be sure to think like a businessman and do not let your emotions guide you... difficult as that might be. Turning the investment you'd have to make into a profitable venture could be a nightmare. Ask those run workshops what it takes and calculate what you might expect to earn after expenses. You would need a really solid business plan which might require a lifestyle change and more effort than you really want to undertake. Remember your friend who owned that studio had deep pockets from his professional work.

Most likely The space itself has increased significantly in value over the years. The estate will look to maximize the sale value on the real property, and that will happen once realtors get involved. Here in the East, people would think nothing of buying such a unit, gutting the darkroom and rebuilding

IMHO, best if you could work out a bulk purchase of the equipment. Perhaps the family would consider something on that order since you were a friend. Evaluate equipment values carefully based on the depressed market for analog eqpt. in case you go that direction.

Good luck in whatever you decide.

[Erik Larsen]

Are you talking about buying the real estate or just the darkroom contents and leasing the space? Looks like a great space to work in especially if coming from 15 sq feet! If you want to buy the real estate as well it just has to appreciate enough to make it worthwhile in the long term. If your income is sufficient to warrant the payments, why not? I'm assuming that the price of commercial real estate is going to go up in the future and your risk of getting your money back plus appreciation is anticipated. If you're not looking for an investment and just want darkroom space, I believe you could rent space and build a darkroom for considerably less. I would love to own that space, sadly it would take a winning lottery ticket for me to buy it[emoji3]

[Kodachrome25]

Are you talking about buying the real estate or just the darkroom contents and leasing the space? Looks like a great space to work in especially if coming from 15 sq feet! If you want to buy the real estate as well it just has to appreciate enough to make it worthwhile in the long term. If your income is sufficient to warrant the payments, why not? I'm assuming that the price of commercial real estate is going to go up in the future and your risk of getting your money back plus appreciation is anticipated. If you're not looking for an investment and just want darkroom space, I believe you could rent space and build a darkroom for considerably less. I would love to own that space, sadly it would take a winning lottery ticket for me to buy it[emoji3]

Exactly, I would be looking buying the real estate which is 95% of the value. The payoff for me is that it is pretty much turn key, my wife and I have only a single car payment and together well above average income. Let's say fair market value is 500K gutted, possibly not out of line for the current market. I would offer 400K and if they bite it is a win-win because they have nothing to deal with at that point.

Again, this is a super long shot, but I have to try because to be quite honest I am otherwise fed up with trying to figure out a darkroom space in a place where renting that kind of niche space long term in any kind of stable fashion is somewhat risky given how property owners behave and that home prices even 30 miles from me are on par with Tokoyo, Manhattan, etc.

It's a crossroads for me....I have been considering that if I can not get a real darkroom going in the next couple years then I will after a 25 year career that now gives me an income close to or over 6 figures, exit photography entirely as a job and passion. I just can not do all digital for the rest of my career, I would rather leave it all and do something else entirely.

My wife knows this is a big fork in the road so she is very supportive about it.

[Pierre 2]

Low ball could still be way too high. However nice, I believe equipment is being dumped and/or hopefully salvaged for mixed scrap price but even when salvaged, darkroom equipment is NOT becoming more valuable as time goes by. It seems to me the value of this is essentially the value of the real estate property (unless there were recurrent revenues from your late friend past time which you could you would be in a position to generate yourself, for your own account - and I am not talking about revenues from new potential activities that you may envision unless you are 100% certain that they will be successful). As others have implied, the equipment value probably represents nothing but a tiny (and perhaps, if not very likely,
inconsequential) fraction of the value of the real estate.

[William Whitaker]

Is it worth considering as an investment property? Is there any market in your area (wherever it is...) for a rental darkroom? Or, possibly, if an attached parcel is available, rental studio space as well?

I understand well the appeal, but as has been mentioned, beware the pitfalls.

[Kodachrome25]

Low ball could still be way too high. However nice, I believe equipment is being dumped and/or hopefully salvaged for mixed scrap price but even when salvaged, darkroom equipment is NOT becoming more valuable as time goes by. It seems to me the value of this is essentially the value of the real estate property (unless there were recurrent revenues from your late friend past time which you could you would be in a position to generate yourself, for your own account - and I am not talking about revenues from new potential activities that you may envision unless you are 100% certain that they will be successful). As others have implied, the equipment value probably represents nothing but a tiny (and perhaps, if not very likely,
inconsequential) fraction of the value of the real estate.

Of course, that is why I like the proposition of buying the place for both the real estate value and the value of my business, one that just invoiced a client for a 15 foot wide mural via digital output for 4K. In working with architects, interior designers and a couple local galleries, there is a market for what I can produce here and that is why I still earn a good full time living with it.

But I do take a bit of exception to the equipment being of no value, I don't agree because I am very well versed in how much all this stuff goes for on eBay and other outlets, it's not junk. I have the same enlarger and while it did come with lots of great stuff and was a good deal, it sure as heck was not free. Things like his Apo Sironar S lenses, Hasselblad 501CM, that is also not going to the scrap heap.

But the bottom line is the price has to be right for me to do this and until I hear what the property alone is worth, I won't have a clue as to what kind of offer to make.

[Kodachrome25]

Is it worth considering as an investment property? Is there any market in your area (wherever it is...) for a rental darkroom? Or, possibly, if an attached parcel is available, rental studio space as well?

I understand well the appeal, but as has been mentioned, beware the pitfalls.


Yes, yes and yes, this is one of the top real estate markets in the world, home prices within city limits fetching 1-5 million for a decent to great condo / duplex to 10-50 million for large homes. Even during the Great Recession, real estate prices fell no where near as much as other areas and recovered quickly. I have plenty of friends in real estate too so I will be getting their opinions.

The rental darkroom would be a consideration as well, I have had requests for it, there is a huge art scene here.

[Robert Langham]

Overhead kills small businesses as much as any other factor. Wonder what the property tax will be per year? Still, if you buy it, I want to come visit with a stack of negatives. Good luck!

139348

[Nigel Smith]

But I do take a bit of exception to the equipment being of no value, I don't agree because I am very well versed in how much all this stuff goes for on eBay and other outlets, it's not junk. I have the same enlarger and while it did come with lots of great stuff and was a good deal, it sure as heck was not free. Things like his Apo Sironar S lenses, Hasselblad 501CM, that is also not going to the scrap heap.


Some things will have value, others will be cost to them to ready the building for sale. Sounds like you know there two aspects to this opportunity, the building and the chattels. The building will have a commercial value that should be determinable and depending on local conditions, you may or may not be able to bargain the price down. Buying residential property here is a case of add 10-20% to the listed prices! No idea about commercial, don't do it myself! As for the chattels, some will be worth selling, some won't be worth anything and some will cost to get rid of. Sounds like a great opportunity for you but do your research. Good luck!

[Bill Burk]

Good luck with this decision. What's in your best interest (a fair price for the real-estate and a gesture of honor for the darkroom contents) might be at odds with the family's best interest (a premium real-estate price and full value for the darkroom contents).

Hope you can work something out because it sounds like it's great for you. Daydreaming here, but maybe you can "pay" for the contents of the darkroom with prints and do a straight transaction for the real estate.

[Kodachrome25]

Overhead kills small businesses as much as any other factor. Wonder what the property tax will be per year? Still, if you buy it, I want to come visit with a stack of negatives. Good luck!

139348.

It will be about $1,200 a year for a property worth 500K.

Come on up, Texans *love* Aspen, lol!

[Daniel Stone]

Does his estate/will/last rights dictate anything in terms of how it is to be sorted? I'd look into that before getting all hot n' flustered, TBH.
Do you and your wife have a house, or do you currently rent? Is this property zoned as "inhabitable" according to local code? I mean, if you guys are currently renting, you could(if all the stars aligned) turn your monthly rental payment into a mortgage payment, of sorts. Just an idea of course, that's IF the space has enough going for it to make it a home in addition to a work space...

A friend of mine, when getting his little(now not so little, he's done well) fabrication/welding business started approx 5 years ago(right in the thick of the banking sh**storm) couldn't afford to pay for both an apartment AND rental space in a business park for his shop, he(against my suggestion) put himself up in his shop. He was the only employee, so he lived where he worked(literally), but after busting his a$$ for 9 months straight, building a customer base, he finally got himself out. Not ideal(and against his rental agreement), but it worked, and he's now just bought a home with his wife.

Moral of the (above) story: REALLY look at where you want to go with yourself. It sounds like you pretty much have your stuff ironed out, but do the numbers, see if it's even in the REMOTE possibility of being "turn key", despite having all the bells n' whistles that the doctor could afford... A single, $4,000 sale will only cover a month or two mortgage payments, so you'd better have customers out the door, cash in hand(no net30/60/90) eager to buy, unless you have other income channels that can support yourself and not keep you in ramen-only land :D

cheers,
Dan

[Kodachrome25]

Does his estate/will/last rights dictate anything in terms of how it is to be sorted? I'd look into that before getting all hot n' flustered, TBH.
Do you and your wife have a house, or do you currently rent? Is this property zoned as "inhabitable" according to local code? I mean, if you guys are currently renting, you could(if all the stars aligned) turn your monthly rental payment into a mortgage payment, of sorts. Just an idea of course, that's IF the space has enough going for it to make it a home in addition to a work space...

A friend of mine, when getting his little(now not so little, he's done well) fabrication/welding business started approx 5 years ago(right in the thick of the banking sh**storm) couldn't afford to pay for both an apartment AND rental space in a business park for his shop, he(against my suggestion) put himself up in his shop. He was the only employee, so he lived where he worked(literally), but after busting his a$$ for 9 months straight, building a customer base, he finally got himself out. Not ideal(and against his rental agreement), but it worked, and he's now just bought a home with his wife.

Moral of the (above) story: REALLY look at where you want to go with yourself. It sounds like you pretty much have your stuff ironed out, but do the numbers, see if it's even in the REMOTE possibility of being "turn key", despite having all the bells n' whistles that the doctor could afford... A single, $4,000 sale will only cover a month or two mortgage payments, so you'd better have customers out the door, cash in hand(no net30/60/90) eager to buy, unless you have other income channels that can support yourself and not keep you in ramen-only land :D

We rent in a county subsidized 2 bedroom for now, pretty inexpensive and are looking at playing the housing lottery before our incomes climb too high which leads to the other topic, we do very well together in terms of income. I do have to check to see how this property ownership would affect our eligibility to play the local housing lottery though, although I suspect they don't count business ownership as a disqualification, only an adjustment of owned assets.

My buddy who is a very good realtor in town is going to run the numbers this week to see what the place is worth sans gear, improvements. Basically at this point though, the commercial assessor who is a family friend says the family would jump at the chance to sell this as a package so who knows, this could turn out great.

[brucetaylor]

You need to do your homework and determine the approximate fair market value of the commercial real estate. You should be able to determine that easily. It is unlikely you'll be offered the real estate below fair market, that may even be established in the estate instructions. Tenant improvements rarely have any value, so plumbing, climate control, vents have little effect. Zoning, location and square feet are what determine price. The equipment would be worth perhaps 50 to 60 % of used retail, the cost of selling the equipment is high, it would likely be sold at a wholesale price to people who would resell it (even if that's you). However, if you're in a good economic area and it sounds like you are, it would likely be a good real estate investment regardless of what use it is put to. You could always rent it or sell it later. The other step is financing. That may be quite a hurdle, this is commercial not residential and requirements are different. But sometimes the seller will finance short or long term. This may be a good opportunity to own some investment property. I think your wife is right- go for it.

[Kodachrome25]

You need to do your homework and determine the approximate fair market value of the commercial real estate. You should be able to determine that easily. It is unlikely you'll be offered the real estate below fair market, that may even be established in the estate instructions. Tenant improvements rarely have any value, so plumbing, climate control, vents have little effect. Zoning, location and square feet are what determine price. The equipment would be worth perhaps 50 to 60 % of used retail, the cost of selling the equipment is high, it would likely be sold at a wholesale price to people who would resell it (even if that's you). However, if you're in a good economic area and it sounds like you are, it would likely be a good real estate investment regardless of what use it is put to. You could always rent it or sell it later. The other step is financing. That may be quite a hurdle, this is commercial not residential and requirements are different. But sometimes the seller will finance short or long term. This may be a good opportunity to own some investment property. I think your wife is right- go for it.

When you connect with a community like the one I am in you make allies and never enemies. I have a few people going to bat for me right now in figuring what the current and even the long term value of this property is completely independent of my intended use for it. That simple math will be done by Tuesday, that will pretty much be 90% of what I need to know. If this fails to line up as I would want it to, I will look into getting the sinks and stick to plan A.

That's all I can do, you miss 100% of the shots you don't take, I am going to do my best to make this a positive outcome. It would suck to see my friend's amazing workspace get ripped to shreds.

[Tin Can]

Good luck.

I think you will end up with it.

Without you, they need to strip it out, remodel, stage and then sell.

That will cost money and time. The gear is incidental to everyone except you.

And they know it.

Enjoy your new space!

[DennisD]

When will the estate be listing the property for sale ? Let the family know you'd like to know the asking price ASAP. If they are reasonable and the price aligns with your research, you might be able to deal directly. Once they sign with a broker, the sale will be subject to a substantial sales commission.

If you're in a "hot" market, the property will easily sell in "as is" condition. That is what the estate would prefer. The family would probably not be advised to spend $$$ to demolish the improvements and remodel for sale. The new owner will make any necessary changes. OTOH, if the market there is slow, the darkroom will be a liability on the sale of the unit.

If you're truly bent on buying the real property, your ability to finance depends on your having a solid (ongoing) income statement. You'll need several years of supporting tax returns. Also, for commercial property, interest rates are higher than residential. Someone suggested getting terms from the seller (good idea), but the estate lawyer may advise against that for tax reasons.

Were you to go for the property, your final deal would, ideally, include all your friends's photo equipment, I.e. darkroom, cameras, etc as part of a favorable negotiated package sale price. Keep in mind the value, present and future, is primarily in the real property.

The photography stuff is only of value to you or another photographer. And values are on the downtrend. Despite what certain pieces of photo eqpt may be worth individually, there are definite costs ($$$, time, effort) and difficulties disposing of anything & everything.

[Jim Fitzgerald]

Knowing the area I would say go for it! The work of yours that I say is excellent and I think that if you do not feed your passion then what is the point of life? We all take chances but I feel this is a great opportunity. The location is great and hell I retire next month and June and I are going to travel so I'd love to come and check out a world class darkroom! Good luck but I say go for it. My .02

[thomasfallon]

The darkroom and systems have no value to anyone in the market besides you. Most buyers would just clear it out. The commercial space is pretty easy to get a value based on comparable sales. The family may prefer a quick sale rather than holding the property. If so, they will require an attractive price. On comparable sales, how long were they on the market? A good accountant can advise you if this makes business sense for you. If it does, get a commercial real estate person to help you with the purchase negotiation. Take the emotion and personal relationships out of it.

[Corran]

He purchased the 680 sq. foot space in a business park in our extremely expensive resort town for about $345,000 in 2005.

Ultimately it's up to you and I have little to no input.

But...

It occurs to me that simply taking all of the darkroom equipment and putting it somewhere not in an expensive business park might be the more reasonable thing to do, even if you have to rebuild the "turnkey" system in a new place. While the site looks beautiful, I can't imagine sinking $400k into it?! Surely you could get all of that equipment simply by removing it and preparing the space for proper renovation as the "payment." Surely there is a location somewhere close enough that would work just as well that isn't nearly that expensive?

I mean, it's New York so I understand property value is a bit [lot] different, but the shed behind my house that I use as a darkroom is twice that size and my entire house is only worth 1/4 that.

[Kodachrome25]

It occurs to me that simply taking all of the darkroom equipment and putting it somewhere not in an expensive business park might be the more reasonable thing to do, even if you have to rebuild the "turnkey" system in a new place. While the site looks beautiful, I can't imagine sinking $400k into it?! Surely you could get all of that equipment simply by removing it and preparing the space for proper renovation as the "payment." Surely there is a location somewhere close enough that would work just as well that isn't nearly that expensive?

I mean, it's New York so I understand property value is a bit [lot] different, but the shed behind my house that I use as a darkroom is twice that size and my entire house is only worth 1/4 that.

If I make a post like the one I have, I have to expect to reveal at bit more about my self, location, means, etc.

So we live in downtown Aspen, an 8 minute walk to one of 4 ski areas, 55 restaurants, real estate is on par with the Hamptons, Beverly Hills. Several friends of mine have net worth's in the billions, I can take a photo out my apartment window right now that will show you about a dozen homes on the hill above worth well over 200 million all told.

For the two clients / contracts I have that are near assured year on year that have been going strong for about ten years, that is 75K minimum I make if I do no marketing, no pavement pounding, anything. In order to keep them, I have to at least stay within 10 miles for various reasons, twist my arm. My wife makes almost double what I do working for one of the nation's largest healthcare providers and is an utter rock star, is constantly being recruited for higher slots in the company. She works remote and travels a bit, her uniform at home is often her pajamas, twist her arm. She can work anywhere there is a decent airport nearby and make the same amount of money, Aspen or Tulsa, OK.

Everything is great, except for the points of entry into free market homes, 250K per year in most places you are considered upper middle class, here it is *just* going to get you into free market housing. So my wife and I are at a crossroads. I can leave here, we can live in another town have a nice sized home with a basement or other great space for a darkroom, but those contracts go bye bye as does the amazing potential for making at least double that with other revenue streams in photography in the town I am in ( was easily that pre-recession when I marketed and did more ). I would likely be doing everything and anything in another town to earn that kind of income in photography and I sure as heck would not be skiing, hiking and climbing like I do now. I'd be doing weddings.

I already have three complete enlargers for doing my own work and holding small workshops. The only thing I would want from the estate are the sinks, I am set otherwise. The business plan, the type of work I do, the whole reason for even being a photographer can only work for me in a place like where I live, so 400K for a place like that I can ride my bike to in the Summer and drive 2.5 miles to in the Winter is pretty much golden to me.

Then my wife and I can either be happy at the income level we are at and bid on county subsidized housing that I no longer have to worry about not having enough space for a darkroom ( $200-$500K ), or we can really get our incomes cranking and get into a free market condo to the tune of 1.2-3 million...that *might* have room for a small darkroom.

You make sacrifices throughout life, I don't regret the ones I have made to live the life as a photographer I have had to make here, but as I get a little older and want more out of my dwelling and career situation, I have to consider all moves I can make in an educated and well thought out fashion, including exiting photography as a job, life and passion if we choose to leave the area.

So here I am, an opportunity in front of me, I don't know what the numbers will be but I have my suspicions. Things could certainly be worse in my life, but I want them to be better, I have literally been working the past ten years to shift to doing fine art and workshops. Using my friend's outstanding space to do that would be fantastic on so many levels, an ideal use of the space really.

All I can do is try....

[Kirk Gittings]

I think you are asking the right questions. In the short run all that is important is will it pay for itself somehow. Hope it works out.

[IanG]

T think you need to be quite frank. as a whole the set up is worth far less than if everything was sold individually or in smaller lots. You need to negotiate.

Back around 1999 I bought a complete darkroom and various other kit from a family where the father (the photographer had died), it was on a Newsgroup and people wanted certain items and the family would have made far more but the son & his mother didn't want the hassle and wanted everything to go in none sale.

I think you're in a similar position, it's up to you whether you give the family a share of any duplicate items you sell on.

Ian

[RSalles]

Daniel,

Evaluating the thing by a "big picture" point of view and bypassing where the devil is - the very little details - I would say, just go for it.
In a better sense of perspective I prefer to regret the things I did then those I didn't, and my perception is you better get it and don't turn back at all.
Go ahead, luck favor the braves,

:)

Cheers,

Renato

[Corran]

For the two clients / contracts I have that are near assured year on year that have been going strong for about ten years, that is 75K minimum I make if I do no marketing, no pavement pounding, anything. In order to keep them, I have to at least stay within 10 miles for various reasons, twist my arm. My wife makes almost double what I do working for one of the nation's largest healthcare providers and is an utter rock star, is constantly being recruited for higher slots in the company. She works remote and travels a bit, her uniform at home is often her pajamas, twist her arm. She can work anywhere there is a decent airport nearby and make the same amount of money, Aspen or Tulsa, OK.

Well good on you. I'll bow out then as I have nothing to contribute. You live in a different world than I. Such is life - both my GF and I have good jobs in the higher education field and earn triple the "median household income" for this county but only 1/4th of what you two are pulling in. Of course my city was ranked #2 poorest in the country at one point. Want to buy a print for $100? :rolleyes:

[Kodachrome25]

Well good on you. I'll bow out then as I have nothing to contribute. You live in a different world than I. Such is life - both my GF and I have good jobs in the higher education field and earn triple the "median household income" for this county but only 1/4th of what you two are pulling in. Of course my city was ranked #2 poorest in the country at one point. Want to buy a print for $100? :rolleyes:

It is good you contributed! I have enjoyed reading the varied responses from everyone, no one is wrong or right. I started off by saying this is a niche topic and as it turns out, it really is. I just hope I can get a darkroom going that I can use and have other people use, I am looking at other options for that including having arts programs and the city look into it.

[Corran]

Cool, that's a good idea. I have had numerous friends and students ask to use my darkroom space and I would love to have a "community darkroom," though mine is not nearly ready for that kind of use, so I envy you.

[Eric Biggerstaff]

Love the space and opportunity, it could be a good investment. As Anderson Ranch is no longer teaching traditional photography or printing, you might be able to get some excitement for workshops - heck you cannot be in a better place for them. I am up there all the time and always seem to find something new. The price is high, but you could turn and sell it or lease the space for income and probably not take a loss. By the looks of it, you could live out of it if needed! :rolleyes: When you get it let me know, I will pop over for a tour!

[Henry Ambrose]

Other than the real property you are buying a business that is not a business and that doesn't fit any business plan. You already have a business and a plan. So the real question here is: Can you pay for this from your current business and plan?

If you can buy it for the value of the real property and can certainly maintain a mortgage on that amount, then go ahead and give it a try.

[dsphotog]

Sounds like you know you want it!
His family wants you to have it.
All that's left to do is the numbers.

Best wishes for your new addition.

[Kodachrome25]

Other than the real property you are buying a business that is not a business and that doesn't fit any business plan. You already have a business and a plan. So the real question here is: Can you pay for this from your current business and plan?

If you can buy it for the value of the real property and can certainly maintain a mortgage on that amount, then go ahead and give it a try.

My current business would easily take care of a monthly of 2K.

Buying this property would make it cost less in the long run / big picture than trying to find a home that would allow for a darkroom of even 1/3rd the total space of this one within 40 miles of the same area. Because then the pressure to find a home under a million that would provide such a space would be gone, it would be a commercially dedicated space free of the home office deduction which happens to increase audit risk btw. I currently rent office space in town on an excellent lease due to this reason, easier to write off, no audit risk associated with the home office deduction. I would get rid of the office space if I got the studio / darkroom.

With two properties in an optimal sense at 350-400K a piece, this gives us a *much* better living and working situation than finding that local property for
an affordable price. I had considered renting commercial space but could not find anything less than $1,200 per month and for longer than a year. Unless you can build a business as a pop up that is easy to move around, this makes it hard to create a long term plan given how flakey landlords can be once the lease is up.

It's an exciting and sobering prospect at the same time, this is going to make or break my career couple of years ahead.

[Michael E]

My current business would easily take care of a monthly of 2K.


I am definitely doing something wrong :-(

The numbers are staggering, but you have put them well into perspective. My income is a fraction of yours, but my house only cost a fraction of your upcoming project. I have spent a lot of time and money working on the house and (currently) the workspace, studio and darkroom. Two things I have come to appreciate: The luxury of space and the luxury of nobody to answer to. Don't let your emotions get the best of you, do the math and also don't underestimate the toll the property will take in the future. But if everything fits, go for it!

Best,

Michael

[Kodachrome25]

Believe me...I am being **very** cautious, especially since we are all starting to see patterns in the global economy that could have lasting ripple effects, especially in China.

Our local tourist economy will likely see a dip in european visitor-ship this Winter due to the currency. And lets be real here, even in the best of circumstances, unless you are one of the smarter legacy "Greats" in photography, it is no where near as good as it used to be. In 2006 I had my best year, I won't say what the annual revenues were but in one month in particular I billed out 45K...I do miss those days.

Also, I will meet with my CPA this week. He might have some reality checks for me that will send me back to the drawing board.

[Kirk Gittings]

Oddly enough I'm having my best 60 day run since 2007. Pretty amazing as I didn't see it coming at all and it may not mean anything in the long run-may be just an anomaly. But I'll take it. This is the most commercial work I've seen since 2006 by far and my best print sales ever-30k.

[Peter De Smidt]

That's great to hear, Kirk!

[HMG]

The piece that seems to be missing in this discussion is just how liquid is the "680 sq. foot space in a business park". If it would be easy to sell (or perhaps rent), that minimizes your risk exposure should your plans change or income projections not pan out. If not, then it's pretty risky.

Much depends on how that space can be otherwise used and what restrictions it may have. For example, could it be used as a commercial kitchen for a food truck? The more alternative uses there are (in your market) the easier it will be to unload if/when the time comes.

You can value the property at a "quick sale" (but not fire sale) price less commissions and fees. You can value the photo gear and non-built in darkroom items at 75% of typical private party sale prices (the 75% value reflects the cost of selling plus a bit of a package price discount). The built-in darkroom stuff (ventilation, sinks, etc) are valued at 0 unless pieces are easily removable, have non-darkroom use, and a market in your area.

Normally, I would suggest getting a sense from a banker as to a mortgage on the property without other collateral. That would give you an idea about what they see as the risk. But these days banks can be so risk averse you may not get a fair assessment. Perhaps your SBA loan approach would help. But keep in mind that SBA loan eligibility may be limited by your location (NOT an economically underdeveloped area) and that you're not creating jobs.

[Drew Wiley]

That's a nice home darkroom. But over the past decade or two I have literally seen at least half a dozen darkroom easily worth twenty to fifty times as much hauled to the dump. And they had to pay someone to take it. You'd be utterly stunned at the kind of equipment I've been offered for free; but other than a few
items, I have no more space. And when I pass, unless someone with photography interest buys my house, there will be an analogous situation. Unless some arrangement can be made for donation to a non-profit teaching space and a tax writeoff, they'd be lucky to get any money out of that other than incidentals that
can be easily shipped. There is quite a bit of interest around here in darkroom work, but this is yet another area where people simply cannot afford the real estate unless they have fixer-upper skills, and that takes time. I got in under the wire, back when local properties with big shops or attached commercial spaces
were still available in decent residential areas. Now affordable spaces exists only in neighborhoods where you need bullet-proof siding. Of course, they are areas
an hour or two drive away where the real estate is currently a bargain. But those aren't the kind of places where a commercial photographer is likely to survive.

[Kodachrome25]

The piece that seems to be missing in this discussion is just how liquid is the "680 sq. foot space in a business park". If it would be easy to sell (or perhaps rent), that minimizes your risk exposure should your plans change or income projections not pan out. If not, then it's pretty risky.

Unless the broad market takes another 2008-like dive, I'd say it is pretty liquid, the market has definitely been heating up (http://www.aspentimes.com/news/18029462-113/number-of-aspen-real-estate-agents-rising-again), although industrial commercial space 2.5 miles out of town tends to not be nearly as favorable as retail commercial space which in the town of Aspen proper is stratospheric. I found out today that the county assessed valuation for property tax purposes is $55,970, actual value listed at $193,000, a number I could only dream of getting it for considering the current market. At least the property taxes won't kill me. I also talked to the county housing authority and me owning commercial real estate does not disqualify me from bidding on residential property offered within the scope of the subsidized housing program, most certainly welcome news.

The appraiser said the family is actually really quite pleased that I am looking to get it, have told the lawyer to not put it on the market yet since I am the primary consideration this point. I am also meeting with her tomorrow because they still want *my* opinion on the value of the equipment if sold and ventilation upgrades.

They are already well aware that the market for this kind of equipment is *quite* soft, especially for large pieces like sinks, presses, plate burners and other large and expensive to ship items. We also agreed that the ventilation upgrades are likely a zero sum game in that it largely represents sweat equity and not more than 2K in retail material costs. So lets say a bakery wants to come in and make the darkroom space into a kitchen of sorts. The ventilation would not really work for that and there is no commercial fire suppression system installed. So overall it represents very little market value to most buyers. If it comes down to it, they could take care of the gear and leave the sinks and I could use all my existing equipment which is actually more than what he had.

I meet with them at 9 tomorrow, keeping this all moving forward, I remain cautiously optimistic.

[Drew Wiley]

I thought most of the commercial whatever (other than galleries and boutique pot bars) was downhill from Aspen, at Glenview Springs (??) or whatever (not so far
far down as Durango, which seems like a Motel Six town). I obviously haven't been thru there in a long time, before the fires and local oil boom. Since Aspen is
pretty much internationally known as a resort destination, you'd think it would be pretty recession-proof in terms of property values. I probably couldn't afford a
cup of coffee there.

[Tin Can]

I thought most of the commercial whatever (other than galleries and boutique pot bars) was downhill from Aspen, at Glenview Springs (??) or whatever (not so far
far down as Durango, which seems like a Motel Six town). I obviously haven't been thru there in a long time, before the fires and local oil boom. Since Aspen is
pretty much internationally known as a resort destination, you'd think it would be pretty recession-proof in terms of property values. I probably couldn't afford a
cup of coffee there.

I remember driving into Aspen in the 80's and buying the most expensive gasoline my 1972 Buick ever drank. It was fun dodging the wealthy with my huge car on the narrow roads...

[Drew Wiley]

I last went thru Aspen and up the hill late season, and pulled over beside the lake across from Maroon Bells. It was snowing pretty good and nobody else was around. About two in the morning after a decent sleep I figured I better drive lower down the hill so I wouldn't need to put on chains in the morning. As I started to turn around, there was a red fox mere feet away in my headlights. He panicked but couldn't get decent traction on the wet fresh snow himself. So as he took a leap over the guard rail, it ended up as a complete back flip right into the lake itself, which wasn't frozen yet. Sorry about that.

[HMG]

Unless the broad market takes another 2008-like dive, I'd say it is pretty liquid, the market has definitely been heating up (http://www.aspentimes.com/news/18029462-113/number-of-aspen-real-estate-agents-rising-again), although industrial commercial space 2.5 miles out of town tends to not be nearly as favorable as retail commercial space which in the town of Aspen proper is stratospheric. I found out today that the county assessed valuation for property tax purposes is $55,970, actual value listed at $193,000, a number I could only dream of getting it for considering the current market.

It's not enough to know about the general market; you need to know about the market for that particular commercial space (size, layout, accessibility, possible uses, location). A point that confuses me is that your original post described it as in a business park. But above you reference retail commercial space. If the space is, in fact, desirable for retail, it may be a safer bet.

I was wondering why the taxes were so low for a space with a market value so high. "County assessed valuation for property tax purposes is $55,970, actual value listed at $193,000" explains that. But why is the county's actual value so low relative to market? Is that typical in your county? Around here, at least for residential property, they aim for assessed values close to, but under, market. And assessed value is often updated after a sale if there's a significant disparity.

Best of luck when you meet with them.

[Kodachrome25]

It's not enough to know about the general market; you need to know about the market for that particular commercial space (size, layout, accessibility, possible uses, location). A point that confuses me is that your original post described it as in a business park. But above you reference retail commercial space. If the space is, in fact, desirable for retail, it may be a safer bet.

I was wondering why the taxes were so low for a space with a market value so high. "County assessed valuation for property tax purposes is $55,970, actual value listed at $193,000" explains that. But why is the county's actual value so low relative to market? Is that typical in your county? Around here, at least for residential property, they aim for assessed values close to, but under, market. And assessed value is often updated after a sale if there's a significant disparity.

Best of luck when you meet with them.

OK, OK...look, there are numbers I am waiting on, two agents are working on what comparable units have been selling for in the past 18 months. Also, it is zoned commercial but it is out near the airport some 2.5 miles away from the core of town. So while the town core has Prada, high end restaurants and hotels, out near the airport are a mix of condos, office space and commercial units like this one. This is why it is desirable for me & other small business owners who need affordable space to work out of. The area is far less about polished retail space than workable commercial space such as metal shops, construction, a bakery that serves needs in the town core, etc. You can use this space for retail and the rent would typically be $700-$1,000 per month for this square footage, I have been looking into that for nearly two years. But you would not get the traffic you need for a typical retail operation out there. Conversely, the same square footage within a few blocks of the core of town proper would run you anywhere from $6,000 to $20,000 a month depending on all the usual factors. There are no photographers operating a business in town center except for Peter Lik, most operate out of their homes or at the Airport Business Center.

As far as county valuations go, I am learning about this as I go, so your guess is as good as mine. Market on this could very well be $225,000-$350,000, the original owner bought it for $343K in 2005. Or it could be $600K, I am not sure yet. But I won't know until both the appraiser finishes her work and the two agents get back to me with real numbers. It's one step at a time, looking at all options and possible partnerships and that includes having an investor buy it and I rent with right of first refusal on a possible purchase, you name it, all kind of things. I am not going to get my self into a hole that I will regret but I *have* to start making headway with my plans or in a year or two, I won't even want to touch a camera let alone be in business with them....and I have been doing this since age 8 my friend.

This will either work and be a sound decision or it won't and I will have to find another way.

[hoffner]

This will either work and be a sound decision or it won't and I will have to find another way.

Affirmative on that. Apart from that, asking this forum if I should buy something for $ 500 000 is, undoubtedly, in a class of its own.

[Sal Santamaura]

...As far as county valuations go, I am learning about this as I go. Market on this could very well be $225,000-$350,000, the original owner bought it for $343K in 2005. Or it could be $600K, I am not sure yet...I owned a parcel of land in Larimer County from 1984 until selling it in 2012. During that period, the assessor's "Actual Value" tracked closely what the market was doing for comparable properties. Since Pitkin County must follow the same voter-approved statewide real property provisions that Larimer County does, I'd be very wary of what real estate agents claim it's "worth." My lot sold for very close to the "Actual Value" assessment in 2012.

That the original owner paid $343k in 2005, right at the bubble's peak, is probably meaningless. In my opinion, you should be evaluating this deal using an estimate just under the Assessor's $193k figure for its real property portion.

[Kodachrome25]

I owned a parcel of land in Larimer County from 1984 until selling it in 2012. During that period, the assessor's "Actual Value" tracked closely what the market was doing for comparable properties. Since Pitkin County must follow the same voter-approved statewide real property provisions that Larimer County does, I'd be very wary of what real estate agents claim it's "worth." My lot sold for very close to the "Actual Value" assessment in 2012.

That the original owner paid $343k in 2005, right at the bubble's peak, is probably meaningless. In my opinion, you should be evaluating this deal using an estimate just under the Assessor's $193k figure for its real property portion.

Absolutely and I suspect that is what could happen since this is not a marble floored store front next to the Ritz. I have a number of people looking out for me on this and while I am learning as I go, I am going to be very careful at each step. The real estate agents are just looking for past sales, not anything else. They are also long time personal friends of mine, they are looking out for my interests.

[brucetaylor]

An experienced real estate agent should get you close to a realistic selling price on the open market. A licensed real estate appraiser can get you a number for "fair market value," which is commonly used to settle estates and other legal matters concerning property values. Finally, if you get a loan to buy the property the lending institution will order their own appraisal for the loan. It's pretty straightforward.

[Jon Shiu]

You can often get property valuations by going to Zillow.com and zooming in on the neighborhood and looking for the yellow dots (past sales).

Jon

[David Lobato]

K25, are there city and county zoning regulations to be concerned about? A chemical photo lab in your town seems to be a business anomaly.

[Kodachrome25]

K25, are there city and county zoning regulations to be concerned about? A chemical photo lab in your town seems to be a business anomaly.

Not in this area, it is already registered as a studio / lab business. Up until 2005 or so, there were actually 4 studio / darkrooms plus two full service commercial B&W, C41, RA-4 and E6 labs that did up to 8x10.

In the mid 90's big name location advertising shooters would pull snips mid day and get chromes back by day's end...those were the days.

[Ron Bose]

Any update on this K25 ?

[tonyowen]

Nowhere in the 6 pages of this posting has any mention be made of the old adage regarding the subjective danger of dealing with friends and family.
How sure are you that the advice given (to be given) to you is/will be objective and not 'adjusted' because you are part of a group and/or well known to the advisor?
[I skied Aspen several times in the 1970s when I was living in Toronto - even then Aspen cost/prices outdid those in Toronto.]
I guess the bottom line is if you can afford a known possible negative revenue stream for 'n' years. Also what is the most pessimistic prediction till you have an acceptable break even point?
The major problem with life is that you never know what is going to happen. So you present-day wealth and happiness could all come crashing down. [Without warning my wife, {who like yours was the major wager earner} came down with MS and that caused us to alter our way of life and circumstances - we have survived, butn life could have been much better]
Certainly you cannot wind your life-clock backwards and it will be no good wishing that you'd done something AFTER you decided not to take the balanced risk.
Also, if you get into trouble then you can always sell and at sometime in the future get back on track - even being bankrupt is not the end of everything.
regards

Tony

[Kodachrome25]

Hi all,

I have been working on it for a bit now, I think I could get it for 250k and even have an investor but my gut feeling is to let it go and work on finding a proper home instead. On the bright side, I have built up quite a bit of "help" equity and I am picking up the 4550XLG and a few other gems ( 180mm Apo Sironar S ) as payment for lending a hand.

Who knows, it still might pan out but I am ok with it not as I am working on less risky ways to get my self in a better situation, a darkroom on a home is my dream situation, not a place I have to leave home to go print at. I am also figuring out what can be done with my current space to make it at least better in terms of ventilation.

[tgtaylor]

Hang in there Kodachrome. I do all my processing and printing, color and B&W, in a 1 bedroom urban apartment. Using citric acid for a paper stop and TF5 for a fix eliminates the odors. C-41 and E-6 are processed with a Jobo so no odor there. Sulphide toners are mixed and used on the patio. Alternative prints are exposed with the sun/shade.

Thomas

[Kodachrome25]

So as a final update to this thread I have decided to pass on getting the space for now. The price is right but the timing is not, my wife and I still need to buy a home so we will continue on saving up for that and I will have to continue to work within the limitations of my current space.

However, not all is lost. Because of the work I have put into it with his long time friend, I am getting a *lot* of great equipment either for free or darn near so. Our local photo program is also involved so things are not being tossed to the curb either.

While it sure would have been nice to get the space I will have to keep playing the waiting game and make due.