Purchased 35,000 sq ft former school for $100,000, need insurance advice!!!
Hey everyone, first post. I recently went on contract for a 35,000 square foot building that used to be a school, that I purchased (somewhat on impulse) for $100,000. Yes, you read that correctly. No, there's nothing wrong with it. 

So here's my issue. I got a mortgage for $80,000 from the bank, but they're requiring insurance to cover the loan amount on the building before we can close. Unfortunately, insurance is roughly $15-20k/year on a building this size. I really only want to insure the amount that I have on loan from the bank, is this possible? 

Any and all advice is very appreciated. By the way, I have until 8/29/17 to close or I lose the deal. Help please!!!
[{"id": "dlq4h73", "text": "What are you planning to do with it?", "replies": [{"id": "dlqoxm1", "text": "plz op don't disappoint, we need to know.  ", "replies": [{"id": "dlr1cwk", "text": "Please see above. Sorry I'm still new to this, not totally understanding the best way to reply to comments. ", "replies": [], "depth": 3}], "depth": 2}, {"id": "dlr1ayj", "text": "Well at this point, it's really hard to narrow down. My future brother in law is a brewer, and has been looking for a location to start his own microbrewery. So the gym would probably be a prime location for that. Depending on the layout, the gym could also be used as a wedding venue, alongside the garden area outside (not your typical gym, it's beautiful). I have some friends who are machinists, that are talking about starting their own shop. So the library would probably be ideal for that given ceiling height, and the fact that there are two offices off of it. It also has an industrial kitchen with cafeteria, so I'm thinking I could rent out the kitchen to a caterer or food truck. It's not in a large city or town so I'm not sure it could support another restaurant, so businesses where location is not paramount is really the most important thing. There's a computer lab in which some lady wants to start a call center. I'd also like to turn one of the large classrooms into a movie room, and another into a living area. Perhaps a woodworking shop and a regular shop to work on my car and motorcycles. One of my friends would like to start a forge, which would go well with the machine shop. But even after all that, there's still something like 15,000 sq feet of empty space that I'll possibly use for long term, climate controlled storage. Any ideas are welcome though. It's a lot. ", "replies": [{"id": "dlr1osd", "text": "Which of those uses are permitted in your location?", "replies": [{"id": "dlr1tnm", "text": "All, it's unrestricted.", "replies": [{"id": "dlr35xq", "text": "It is unrestricted zoning?  This is not believable.\n\nNot trying to rag on you too hard, but you have no idea about the zoning, financing, carrying expenses, insurance, taxes, improvement/construction costs, or income for the property, yet you are under agreement to purchase and allegedly have financing?  Did you order a title report yet?\n\nThis sounds like a disaster waiting to happen.", "replies": [{"id": "dlr3cfs", "text": "Well idk what to tell you. It is lol. ", "replies": [{"id": "dlr3jo1", "text": "You really need to see an attorney or experienced CRE broker.\n\nAnyway - keep us updated on this trainwreck.  Genuinely curious how you'll make out.", "replies": [{"id": "dlr42vr", "text": "To answer your last question in order:\n\nZoning: unrestricted\nFinancing: 80/20 loan from a bank, paid out over 15 years\nCarrying expenses: tbd depending on what business I go with\nInsurance: Roughly $1000 per month if I get full coverage\nTaxes: $800/year\nImprovement costs: $10,000 (it's in fantastic shape, this would really be just to paint and clean)\nIncome: TBD depending on businesses\nYes my attorney ordered the title, the only thing left is to get insurance.\n\nWhat is life really but one long disaster waiting to happen. As far as I can tell, even if I just buy it and it sits empty, my mortgage is $650 per month. So I don't really see it failing, because it was just so cheap for $/sf. ", "replies": [], "depth": 8}, {"id": "dlr4ato", "text": "Oh and by the way, I purchased it under an LLC", "replies": [], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}, {"id": "dlrilkd", "text": "In that case, I would talk to local officials and see what sort of development incentive you can get (tax abatement, easing of certain restrictions, etc). \n\nKeep in mind that changing use will most likely require you to make updates e.g. for ADA compliance. \n\nIf it were me, I'd look into what it would take to set up part of the building for paintball...just for fun. ", "replies": [{"id": "dlsvk9c", "text": "I'll definitely talk to the town officials, it's a small town so nothing happens without everyone knowing. And we actually thought about an awesome indoor paintball course.....", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "dlrehnj", "text": "Sounds like a really cool property, you don't see this everyday.  Couple questions:\n\n- when was it built?\n\n- was some sort of environmental report done on the  property? Former schools tend to have contamination from small fuels spills, asbestos, lead pint etc. Size of the problem depends on the vintage of construction, degree of remediation the local govt did, and state regulations.\n\n- What kind of school was this? Elem, high, middle? \n\n- Also just how big is this thing? it sounds huge if it can fit all these things\n\n- have you asked the prospective tenants if they'd be ok with being in close proximity to each other?  Call center prbly doesn't want too much noise from machinery; food and bev prbly want a clean and separate path to the loading bay (does it have one?); no one wants to be near fumes/dust/potential liquid spills from a forge or automotive or wood shop.  Those places also need a good path to get big heavy dirty things in and out.  Depends on how big the property is.\n\n- have you considered demolition in whole or part and selling the land to a developer?\n\n- why did the town sell it? Shrinking small town, not enough kids?\n\n- day cares make great tenants and you have an ideal location.  Unless the town is short of kids.  Can't mix this with dirty industrial uses.\n", "replies": [{"id": "dlrf5xt", "text": "1. 2 sections. 1 was mid 1930's, the other was maybe the 80's. Won't know until the school system releases the blueprints to me. \n2. Not that I can find. No asbestos or lead paint though.\n3. K-12\n4. 35,000 square feet on 2 acres\n5. Right now all these are just ideas. I know what you mean though, only certain businesses are compatible with one another. It was almost an impulse purchase because of how good of a deal it was, but I know I can fill it with something. Just need to decide what the best path to take is. No there isn't a loading dock, but I plan on building one eventually. \n6. It's not really in a great location to be developed, plus the building is in great shape. \n7. Yes, rezoning\n8. Prob not enough demand for a daycare, but maybe a private school? ", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "dlq51mt", "text": "Most likely not imo but this is an uncommon situation to me so its worth making sure.    \nYou have to contact your bank. Theyre the ones requiring you to have it insured so how much you have to insure is also up to them. If your not concerned with usage or liability or anything but minimum cost then theyre the ones who set that and the only people you can negotiate it with.    \nWhether theyll be willing to negotiate is the real question but i dont think anyone here can answer that.", "replies": [{"id": "dlr1erc", "text": "They just said they want the loan amount (80k) covered. They don't care if the building burns to the ground lol. I would like liability though. ", "replies": [], "depth": 2}], "depth": 1}, {"id": "dlqebe2", "text": "Lol ok so what is your plan?", "replies": [{"id": "dlr1c31", "text": "Please see above ^", "replies": [], "depth": 2}], "depth": 1}, {"id": "dlr5oz8", "text": "Any advice on how to upload pictures....? :) ", "replies": [], "depth": 1}, {"id": "dmfsn0i", "text": "Here's a video tour of the school if you're interested:\n\nhttps://youtu.be/n2q3vMiKpoI", "replies": [], "depth": 1}]