Cleared the improvement test on a two story mixed use for 41k less than my budget

Small win, real numbers. Corner building in a designated tract, retail down, two apartments up, vacant three years. Paid 148k. Allocation put 39k to land and 109k to the building, so the improvement number I had to beat was 109k inside 30 months.

My budget was 186k. Final was 145k, and the whole 41k difference came from one decision. The original scope replaced the storefront system with new aluminum and glass at 38k quoted. The existing frame was steel, straight, and sound, and a glazier told me he could reglaze the whole thing with new insulated units for 9,400 and keep the frame. Took him six days. It looks better than new aluminum would have, and it cost 28,600 less.

What nearly broke it: I got the allocation between land and building from my accountant late, week three of demo, and until it arrived I had no idea whether my target was 109k or 148k. If it had come back with more weight on land, my 145k would have been comfortably over and I'd have never noticed. If it had come back the other way I'd have been scrambling. Get that number before you sign anything, because the whole test hangs off it and the way it applies to your specific facts is a question for your CPA.

Retail is leased at 1,850 triple net to a physical therapist, both apartments at 1,275. Ten year hold is the plan and the plan being permanent now is why I'm comfortable saying that out loud.

What I'd keep: getting a second opinion on the biggest single line in the budget. One phone call was worth 28,600.