Condemned Worthy Apartments to Luxury Boutique Hotel

[Jamie Tilke]

Investment Info:

Large multi-family (5+ units) buy & hold investment in Fayetteville.

Purchase price: $315,000
Cash invested: $750,000

as of May 2021, complete restoration is still ongoing due to multiple factors such as bad contractors, capital, complete infrastructure upgrades, military retirement, etc. First project and tons of mistakes. Completion including refi is December 2021. Figures are average of current numbers and projected finished numbers.

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

Was looking for multi-family mini clusters where we could own the whole property and therefore shape the after usage to our model. Short-term lodging in the form of a small boutique hotel.

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

Found it on the MLS at 1:30AM, visited property at 6:30AM (drive-by) and put an offer that evening.

How did you finance this deal?

Private money from close friends.

How did you add value to the deal?

Complete 100% renovations to include infrastructure and land grading/preparation. Brick exterior and some interior framing stayed, everything else was is new.

What was the outcome?

Tons of mistakes and over spending due to first project learning curve.

Lessons learned? Challenges?

This project alone could be a 2 hour podcast of lessons learned alone! More like building a new development, rather than "flipping" a property. Ultimately, the concept is working and ROI projections are very good. However, the level GRIT required for this transformation and concept was/is 10! - #1 Lesson Learned is DO NOT take on a project of this scope as your first one. Not because it can't be done, but the number of obstacles involved would likely cause 99% of people to walk away.

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

No! Tons I wouldn't recommend. My sister had her real estate licenses. We bought it and jumped in finding contractors while building the platform/business to market the units.