Bought a run down SRO with tons of hazards and violations

[James Kilpatrick]

Investment Info:

Retail fix & flip investment.

Purchase price: $1,900,000
Cash invested: $1,700,000

Put in Smoke Detectors (there were none...seriously), CO detector, cured raw sewage in the basement, etc.

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

Was a good, off-market deal, and love the neighborhood!

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

A real estate agent brought it to us

How did you finance this deal?

hard money because of all the issues

How did you add value to the deal?

repurposed redwood from the basement, cleared out tons of flammables and debris. Remodeled parts. Replaced horrible retail tenants.

What was the outcome?

Sale price should be positive.

Lessons learned? Challenges?

A horribly unethical contingency attorney banded tenants together to sue us. Luckily we were able (eventually) to force our insurance company to pay.