Can I afford a warehouse for a side hustle production and tooling firm?
TL;DR, I want to buy a office space or a warehouse to run an engineering firm with: $3.5k in saving, new job @ $90 annually, 770 FICO, and $24.9k in student loans. 

Old-man story mode below:

I have worked in product engineering my whole life and really want to start an engineering firm -- design, prototyping, tooling, mass production/assembly, and fulfillment. 

My situation is: I graduated with $25k loan ($250 monthly min.) Dec./2018. Made some good money at a couple companies, traveled the world. My ambition has always been to work with my dad, but we had a falling out in 11/2020 and I stopped working. Lived with my grandma and friends/ gf, worked odd jobs while dwindling my savings. 

Now, I have $3.8k saved up and I landed a solid job in McKinney ($85k + $5k bonus after 30 days); I'll be starting this month. I would really like to set up a side hustle doing what I know best, product engineering. My options would be P.O, office leasing, or most preferably make payments on a RE loan (FICO = 770). 

I have no idea what to even ask, but I would really enjoy reading recommendations, answering questions, or generally chatting about my situation.
[{"id": "hkey0fj", "text": "This is a nice dream. I suggest you start from your garage.\n\nMcKinney, TX? I know this market well. The warehouse/light industrial market is insane right now. Properties sell for $150+ per square foot, and there's very little available. Lease rates are probably $7-10/ft per year for the space you want.\n\nAlso- prototyping, tooling? You don't have the funds for this equipment right now. I feel like you're getting ahead of yourself. Buy a house with a big workshop or polebarn and ideally with 480V power. Slowly acquire equipment off of eBay etc. When you outgrow the shop, maybe your financial situation will be stronger and/or you'll have met partners who can swing a commercial space.\n\nBest of luck growing this on the side.", "replies": [{"id": "hkxxvq7", "text": "  I don't really have a personal life, that's why I'm unattached to the idea of a house, but I appreciate your unfiltered ideas\n\nI'm not planning on running tools -- merely design, sourcing my contacts, QC, and maybe some production if things take-off. So storage and a business front is more important than energy &amp; equipment. \n\nMy question to you is, a McKinney TX market expert, where would you recommend looking?", "replies": [{"id": "hky1u93", "text": "I didn't mean to be rude, just trying to be direct. Your post was titled \"Can I afford a warehouse...?\" and the general answer is \"no, not right now\". In the McKinney area, or Plano, Allen etc the answer is \"definitely not\". \n\nFirst problem is your finances just aren't there to qualify. Second problem is there's no inventory. Third Problem is DFW is huge and to travel the distance necessary to find a unit that you can afford, you will not be a short commute to your day job, therefore will spend all your time stuck in traffic. To get an affordable unit right now you either need to go north on 75 to Sherman or go south into Dallas. Shoot maybe even east but I don't know what's out there.\n\nWhat you're describing is a small flex condo or light industrial condo. A little office up front (or on a mezzanine), with a roll up door and some unfinished space. Take a look at 11148-11162 Morrison Ln, Dallas, TX 75229 on loopnet. This is about as cheap as it gets right now and might meet your requirements. \n\nAll that said, my sincere advice is that you do not have enough money for this right now, and should try to strengthen your personal finances before leasing or purchasing.", "replies": [{"id": "hlbb2r3", "text": "&gt;I didn't mean to be rude, just trying to be direct. Your post was titled \"Can I afford a warehouse...?\" and the general answer is \"no, not right now\". In the McKinney area, or Plano, Allen etc the answer is \"definitely not\".\n\nNo offense taken! I appreciate your directness! \n\nWell heard. I will be looking into it.\n\nBests!", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hkezvzb", "text": "I'd strongly consider just renting garage space and go for as short of a term as possible since this is just a side hustle for you. At most, are you going to be spending a few nights a week and maybe a weekend or two a month there?\n\nIf you're serious about buying legit commercial real estate you really need to put together a pro forma to figure out what you can afford by finding out what you'll be making from this tooling firm. You'll need your expected net operating income for the next five to ten years, what kinds of loans you can get at what rates, projected after tax cash flows, etc. \n\nI know you want to buy a space, but I'd just do this in a garage. If it's just a side hustle I can't imagine it's going to take up ten thousand or more square feet. If it is, you're going to need employees, you're going to need a ton of equipment, insurance, an accountant, an attorney, up-front expenses for building out the space, etc. There's going to be so much so that it needs to be your *only* hustle, and you're going to need *a lot* more than $3,800. \n\nIf you have no idea how much money you'll make off of this, I'd advise you to sit down and really try to crunch numbers for as long as possible until you get a solid estimate. Like real, actual numbers, not hypothetical, \"maybe I could buy parts at this price\" numbers. Literally find material suppliers, ask them their prices are, and go with that. I don't know how tooling firms work, but you get my point.\n\nI have a feeling renting a garage is your best bet. I'm sure if you check Craigslist you can find some guy renting out a space and just do it there. If you mean McKinney, TX, you're on the outskirts of Dallas already so I bet you can find a garage that's for rent in the boonies for pretty cheap.  One year lease, shouldn't be too risky.", "replies": [{"id": "hkxy6k8", "text": "&gt;I have a feeling renting a garage is your best bet. I'm sure if you check Craigslist you can find some guy renting out a space and just do it there. If you mean McKinney, TX, you're on the outskirts of Dallas already so I bet you can find a garage that's for rent in the boonies for pretty cheap.  One year lease, shouldn't be too risky.\n\nWell heard! You make a lot of sense.. thanks!", "replies": [], "depth": 2}], "depth": 1}, {"id": "hkhc6xj", "text": "This seems to be a personal finance issue before the \u201cside hustle.\u201d You can do it hit your finances need a bit of shoring up IMO. But I hope this works out for you!! Freak\nBig", "replies": [], "depth": 1}, {"id": "hkhif18", "text": "Figure you'll need to put about 25% - 33% down for a commercial mortgage. That would suggest you *might* (if we ignore reserve requirements) be able to afford something in the $11,400 - $15,200 range.\n\nI don't suspect you'll be able to find anything available for you to buy at that price range.", "replies": [{"id": "hkjo7nl", "text": "Doesn't sound like you've heard of the SBA programs with a minimum 10% down (could be a bit more but you get the point)? Could look at 7a or 504. Reserve requirements for a small deal would be negligible if not more likely zero. But again this still seems a stretch.\n\nIn this case I'd recommend incubator space or the personal garage if he has one. And he can rent meeting space at the incubator or a coworking space if necessary.", "replies": [{"id": "hkkco80", "text": "Even if you assume that OP would actually have any shot at getting approved for an SBA loan (which I personally find doubtful), even at 10%, and even with 0 costs, fees, and reserve requirements (which I think is **highly** unlikely), he'd still max out at $38k. \n\nStill unlikely to be enough.", "replies": [{"id": "hkxz3pa", "text": "I feel underestimated by you; an SBA loan seem to be an easy short-term goal from my perspective. Maybe because you've assumed I've no resources or assets? Anyways, would appreciate if you could elaborate on your doubts.", "replies": [{"id": "hkypn8y", "text": "&gt;Maybe because you've assumed I've no resources or assets?\n\nYou have $3,800. That qualifies as no assets. Combined with your student loan debt, your net worth appears to be negative. \n\n&gt;Anyways, would appreciate if you could elaborate on your doubts. \n\nYou're broke. Not hating, been there myself (with a new small business and everything). But the SBA are not angel investors.\n\nIf you want to buy real estate, your only realistic option is likely to be private money (aka borrowing 6 figures from your rich friend/uncle/crazy neighbors). I doubt you'd be able to do hard money, even.\n\nNow look, if you've got a million dollars worth of pirate booty buried in your back yard, that might change the situation. But given that you're counting dollars by the hundred, that seems unlikely.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "hkxygvw", "text": "Very insightful. A lot to look into here; thanks!", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]