How to Market a Live-Work Property
By Joanne Cleaver
Live-work properties are tricky to market. Here are some tactics for finding the angles that will put your live-work space in its best light.
>Be prepared to coach your buyer through the financing process. Your buyer might be assuming that the only options are traditional home mortgages. But a live-work property opens up a host of financing alternatives – and a host of potential complications to the transaction.
>Collect forms and contact information from local small business centers and lenders.
>Scout local sources of information and financial advice, especially local economic development councils, small business centers, and chambers of commerce. They will likely have leads to little-known financing sources appropriate for live-work.
>Document that your live-work property complies with all zoning and codes relevant to living quarters and commercial properties. Your buyer will need to present such evidence to a lender, so arming them in advance with all the relevant evidence will remove a major roadblock to obtaining financing.
>If you are selling an actual business – such as an operating bed-and-breakfast – you’ll also need to provide audited financial statements. Your buyer might have to get two loans – one to purchase the property and the other to purchase the business. Expect to cooperate with an appraisal for both the property and the business itself. And copy all the operating licenses and permits you have so your buyer can see what he needs to get.
>Selling a business and property as a package opens up a new channel of potential buyers for both. Consider approaching:
- Related businesses that could logically to add the services your company offers
>If you are unsure that your live-work situation will hold up to current laws regarding disability access, codes, ventilation, and commercial/residential zoning, pay for an inspection. At the very least, this will flag problems that you can then address on your own timetable and within your own budget. At best, this will identify potential deal-killers that you can rectify.
>Prepare a detailed floor plan that shows the access and clearance of entrances and exits (so buyers can figure out, for example, if furniture they manufacture can fit through the exits). Also plot industrial infrastructure such as grounded electrical outlets, drains, work surfaces, and appliances. All of this will help your buyer see how the setup dovetails with his requirements for space.
>If your work space is flexible, outline several scenarios that illustrate how it could be used for different types of businesses. Outlining how the amenities work for a caterer or a frame shop or a yoga studio will help buyers “fill in the blanks” from what they observe and how they might use the space.