Anyone ever built a shop/apartment out of a steel building?

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blockislandguy
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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by blockislandguy » Wed May 28, 2014 10:09 pm

@nicKMcKinney: Agreed. Sure, the total cost of something is the acquisition cost plus the maintenance cost less the profit the investment generates less what you can sell it for. As an example, IMHO putting a lot of time and money into rehabbing an SV 85B can result in a very costly machine that will never be a SV RT17Y let alone a Berco.

As another example, early on in my career , before there was the internet and sourcing supplies was more difficult, we built some pallet racks out of 4 X 4 wood. This was nutso. The racks had no resale and took time away from what we were doing to produce a profit. The wooden pallet racks are long gone now (because they were made from pressure treated wood we couldn't even burn then in the fireplace at home!) and with the internet we've been able to source metal pallet racking at good prices.

But the major thing I was trying to point out was that if a guy got too weird in putting an apartment into a shop it would hurt the resale and he might not get back whatever he had invested in the apartment. There aren't a lot of people looking for shop space with an apartment built in.

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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by nickmckinney » Thu May 29, 2014 8:53 am

blockislandguy wrote:@nicKMcKinney: Agreed. Sure, the total cost of something is the acquisition cost plus the maintenance cost less the profit the investment generates less what you can sell it for. As an example, IMHO putting a lot of time and money into rehabbing an SV 85B can result in a very costly machine that will never be a SV RT17Y let alone a Berco.
We have had this discussion before and you come from a different shop setting/business model than the majority here. Your shop is obviously large and well staffed and your machines have to stay busy. Most of us are 1-5 man shops with an average of 2 total people I would guessimate. In our cases time on a machine is actually part time as customer service/phone calls/ front office BS takes up a ton of our time.

I will have less than $5K into my CBN surfacer, it won't do a 351W block or anything larger, but part time it will make 7-10X per year of what I spent on it and the bigger jobs I quickly tell them to go elsewhere leaving me to cherry pick the most profitable work. The next shop with a larger surfacer has to move a good bit more work to make the same money as their overhead is that much higher both with the machine, the added floor space, and the added accessories to lift the larger items not to mention the added manpower costs. I see too many shops that are in over their head with overhead, the new machines are not getting any cheaper, and the customers seem to want to pay less and less anymore.

I have been buying machines cheap and rehabbing, and the result is a machine that not only do I know intimately it also performs as good as a new one that costs 10-20X as much. With the Berco or an old Comec or the SV85 when it breaks and you can't get parts you better know how to make them yourself or be able to find someone that can.

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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by blockislandguy » Thu May 29, 2014 10:00 pm

Nick, all good points especially the last paragraph about how by rebuilding the machine you really know it and can fix it when it breaks.

The performance guys seem to have the fanciest, newest equipment and the biggest pickup trucks. I sometimes wonder if they make any money with those lease/loan payments.

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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by nickmckinney » Fri May 30, 2014 7:44 am

blockislandguy wrote:The performance guys seem to have the fanciest, newest equipment and the biggest pickup trucks. I sometimes wonder if they make any money with those lease/loan payments.
Someone smart once said to make a million bucks in the performance world you need to start with 2 million. I think they were speaking from first hand experience. You need to move a ton of product to cover all those machines and if only doing performance thats a tough one if the money is only coming in from the jobs.

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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by Adger Smith » Fri May 30, 2014 9:22 am

A long time ago I was told , by a well known mass engine sales guy, that his profit center in the engines and kits he sold was in the parts. The machine work and assy was a give away to sell the parts. Knowing that, I then understood why I saw missed machine operations in most of these "Store Bought" engines. IE: Pins too tight in pistons and rod, blocks that had deck height "All wrong", Blocks that needed align honed, Engine assys that were "Batch balanced" . You get the idea. Anything that cut machining operation, time or cost was a + to the bottom line.
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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by Keith Morganstein » Fri May 30, 2014 11:37 pm

Adger Smith wrote:A long time ago I was told , by a well known mass engine sales guy, that his profit center in the engines and kits he sold was in the parts.
Much as computer printers. They sell printers inexpensively and make the profits on ink cartridges.

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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by blockislandguy » Sat May 31, 2014 1:05 pm

Son of a gun. There was a long piece in Friday's Wall St Journal about people who had bought old warehouses, contractor's buildings and the like, often in run down areas, to convert into combination shops and homes.

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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by BCjohnny » Sun Jun 01, 2014 3:42 pm

Adger Smith wrote:A long time ago I was told , by a well known mass engine sales guy, that his profit center in the engines and kits he sold was in the parts. The machine work and assy was a give away to sell the parts.
Not quite the same, but a similar conversation I had with the foreman of a large rotating electrics rebuilder, two and a half decades ago. There was little or no profit on sales, they relied on core surcharges to make that happen.
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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by blockislandguy » Sun Jun 01, 2014 8:56 pm

People who rely on core surcharges to stay afloat, give us all a bad name. I can't tell you how many times I've heard the sentence, "My buddy bought a rebuilt exchange one time and he got screwed on the core."

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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by blockislandguy » Wed Jun 04, 2014 9:21 pm

The more I re-read Nick's post about rebuilding older machines to keep the overhead down and knowing what you have, buying machines to fit one's business model, people drowning in debt because they bought new machines, etc I am agreeing with him more and more.

While a lot of the shops that have closed just didn't keep up in terms of quality, marketing (a lot of shops still answer their phone by just saying "hello") and so forth, an equally large number failed IMHO because the (young) guy had too much debt. I think if you are going to go into major debt it should be for what is hopefully an appreciating asset with the potential for resale like a building in a good commercial area. In the meantime, rebuild that SV 85B and tell the guy with the Cummins 855 Big Cam that you don't do them.

A performance shop on the coast in CT just put up a metal package building that came as a kit in a business park. He and his buddies put it up over a couple of months. The building looks great, works for him, and when he decides to retire he can easily sell it.

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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by nickmckinney » Thu Jun 05, 2014 9:34 pm

Blockislandguy - 4 years ago I was looking to get a seat and guide and a CBN, new it was Rottler and few others left. Without ANY tooling the quote was around $60K. I was under the impression then that only a Rottler/VGS style machine could cut a decent valve job, and since I had experience on both a VGS and a Rottler CBN..............Then I started researching/learning and I was able to knock that $60K plus quote down to just under $10K and about 100 man hours of rehab for 2 sweet machines. Since I don't abuse them or use then especially hard, I figure I won't be replacing them either. What I learned on the seat and guide machine the tooling is more important in the end, and that is where the money is going on new stuff.

Now if its a busy business with a high pending workload, you can't afford to sit around and cherry pick the sweet deals. You got to pick your battles with what weapons you have.

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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by blockislandguy » Sat Jun 07, 2014 12:52 pm

Nick, Agreed, Completely. Especially when you related earlier the machine costs to your annual profits of the machine.

I encourage our (younger) guys to regularly read the Boston Sunday Globe auction section for machine shops going out of business and to check out Craigs list. None ever do.

Incidentally, maybe 5 months ago Hot Rod Magazine had a nice article on how to buy a used Bridgeport and rehab it. None of our guys read the article. Amazing.

Let me suggest that when people look at steel buildings to buy or rehab that they pay careful attention to the electrical service and its location . New electrical transformers I think are around 2K plus installation. Wiring is expensive to run. I'd like to get a new, small jet washer, say something with a 40 to 60 gal tank to augment our other cleaning machines. Seemingly, the only small jet spray washers out there are single phase 220. I did find one machine with an option for 3 phase and higher voltage. When I looked at where we wanted to put it and how far we would have to run new wiring from a new transformer, the lower cost to operate three phase 440 volt was no longer a good deal.

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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by nickmckinney » Sat Jun 07, 2014 1:25 pm

I don't think 3 phase is going to help much with a jet wash. 3 phase helps with rotating motors, and in a typical sized jet wash that is not going to be very big HP. Its the water heater elements that drink all the power and they are single phase themselves, and here 440V would help as doubling the voltage halves the current for the same power draw, and its the current load that heats up the wires running from the breaker to the machine. IMHO if you could insulate the exterior of the jet wash you will get more gains than anything else QUICKLY. Loosing heat through the thin metal sides of a typical jet wash operating all day is like money down the drain, and if the shop is air conditioned in summer then its double the money down the drain. Also running its own dedicated line with the biggest conductor possible will help, the current draw is that much on these machines.

Now on manual mills and lathes, what I have found its tough rehabbing the older American iron compared to buying a new Taiwan built version. Taiwan made today is the new American/British/German made when it comes to this size of manual machine. A typical Bridgeport in decent shape is $2500ish, but a similar sized brand new all Taiwan 9x42 mill is $5K, and a monster 10x54 all Taiwan starts around $8K and is near double the weight of a Bridgeport.

Now for livable shop space my wife is thinking to convert one of the rooms into a studio apartment for when guests visit.......we have hot water, a real shower, and 3 phase power. Well I haven't said no yet as it would be nice to be somewhere else should I need time away from the "guests" :lol:

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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by blockislandguy » Tue Jun 10, 2014 7:27 pm

Nick,

Your point about insulation is well taken, especially up here in the Northeast. Our building can be down in the low 50's when we walk in on Monday AM.

Please give me a hand here. I'm not an electrician and may mis-state this. About the only place we can easily put a new electric jet spray is now occupied by our old single phase 220 volts 37 or so amp jet spray. I assumed (Yep, I know what the first three letters make me) that I could find a new jet small jet spray that would be available in a not-too-large tank that would run on three phase 440 volts with say 36 amps. I believe that would cut my amp load in half to 18 amps. Our local utility charges 19 cents a KWH so that would be some nice savings. However , the cost of a new transformer (the power coming in to our building is 660 Volts) and running a line across the building makes this not cost effective.

Speaking of steel buildings, I see ads in all the construction trade journals for package steel buildings at ridiculous prices. I'm told that in addition to insulation etc. you should also inquire about snow loads. I don't think those kit buildings from TN are going to last up here more than a couple of winters. In any case, real estate brokers tell me that on a per square foot basis existing buildings are still a lot less money than new construction.

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Re: Anyone ever built a shop/apartment out of a steel buildi

Post by nickmckinney » Tue Jun 10, 2014 8:05 pm

blockislandguy wrote:Please give me a hand here. I'm not an electrician and may mis-state this. About the only place we can easily put a new electric jet spray is now occupied by our old single phase 220 volts 37 or so amp jet spray. I assumed (Yep, I know what the first three letters make me) that I could find a new jet small jet spray that would be available in a not-too-large tank that would run on three phase 440 volts with say 36 amps. I believe that would cut my amp load in half to 18 amps. Our local utility charges 19 cents a KWH so that would be some nice savings. However , the cost of a new transformer (the power coming in to our building is 660 Volts) and running a line across the building makes this not cost effective.
Actually thinking about it what is the HP rating of the pump motor? Its there and the heaters that will drink the power, I forgot about the pump in my previous statement. I took a quick look at the AXE SW-20 specs as an example, the electric heaters are equivalent to a 6HP motor in power consumption, the pump motor is 3HP, combined with the turntable its about 10HP which is a good bit of current draw if the heaters are on. I would run the highest voltage possible right next to the machine and then get a transformer to step it down there - assuming you are going to run this thing all day. Can you go with a gas burner instead of electric? The AXE unit does have a 3 phase 440V option (440 might be the same as 460 depending like how 110 and 120 are interchanged all the time)

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