I'm an Architect that bought a beautiful old Church in Berkeley that had been empty for some time. I changed the zoning to residential and converted the Church into a beautiful modern single family home on a shoestring budget doing much of the work myself or hiring my own crews while I worked my day job as a big city Architect. It was my first development project and it was wildly successful for me and I had a blast doing it!! I now intend to do something similar now in Los Angeles.

What made you interested in investing in this type of deal?

I've always loved creative projects and adaptive re-uses of interesting buildings. As an Architect, I have a skill set that allows me to take on difficult projects that others wouldn't and come up with creative solutions for the problems. This allows me to get projects that are somewhat outside or disconnected from the market and I think will be a good niche for my company. Also this Church in particular was just a really beautiful space that I could see being a perfect house.

How did you find this deal and how did you negotiate it?

I found the deal on Loopnet, it had just fallen out of escrow for the 3rd time and had been on the market for years as it was a difficult project to do as you had to change the zoning and it needed structural work. I negotiated a 6 month long escrow with the seller which gave me the time to change the zoning to residential which took 4.5 months. As soon as it was zoned as a residence I was able to close the deal.

How did you finance this deal?

I had worked 60 hour weeks taking on side projects as an Architect in San Francisco for years in order to save up $100k. With that money I was able to make a down payment ($50k) and pay the Planning Fees ($30k) to change the zoning with Berkeley. As soon as it was zoned as a residence I could get financing on it as my primary residence and got a 203k Rehab loan for $700k which got me through the first round of building (Kitchen, 2 beds / 1 bath). Then I was able to leverage equity for the rest

How did you add value to the deal?

I changed it from a Church that was about to fall down at $250 / SF to a (I think) beautiful 3,600 SF 4 story 6 bdrm / 3ba single family home in Berkeley where homes like this sell for $800 - $1,000 / SF. The church had a huge unused attic space which had room for 3 bedrooms and a patio and I added a roof deck where one of the steeples was. The Church was originally about 2,000 SF so I was able to capture a lot of space.

What was the outcome?

I now have maybe $2,000,000 in equity in the building and am renting it out for $12,500 / mo. as a luxury residence.
My net is $6,000/mo and I will pull out equity to finance the next project. The project was financially successful beyond what I had dreamed and I was truly blessed with this project.

Lessons learned? Challenges?

I did the first half of this project with not much money and I learned it's a lot easier to do a project when you have money haha.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My brilliant mortgage broker Tim Floyd was amazing and really saved the project a few times by finding me money.
My real estate agent Andrew Pitarre was incredible and really knew what he was doing!