FRANKLIN PARK PROJECT
A GUT TO THE STUDS: FROM START TO FINISH
We bought a historic duplex that was in terrible condition in an up and coming area. The city had filed a nuisance lawsuit against the prior owner and things had gotten so bad they were threatening to demolish the home.
When we offered to buy the property, the Seller accepted, jumping at an opportunity to get rid of this headache. We were in contract – time to get to work!
We reached out to our typical lending banks to get a loan set up to help fund the purchase, but when banks found out the city might demolish the property, it was too risky for them and they declined to finance our project.
With all of our usual lending options out, we tapped our network to see if we could find another option. We found out a new bank was just getting started and was opening the following week. They were interested in the loan, but only if we could get a letter from the city attorney’s office stating in writing that if we bought the place, they would not demolish it.
This was not easy to get…but we were able to get the city attorney’s office to provide a letter agreeing not to demolish the property for 6 months. If we made good progress on fixing it up, they would give us more time. We agreed, the bank agreed, and we closed on the purchase with the new bank’s loan. They even agreed to fund the construction cost of the project.
Our progress was fast enough to satisfy the city. We got a zoning variance to turn the home into a 3-Unit building, added a parking lot in the back, and completely renovated the interior and exterior of the property while preserving all that we could of the historical charm. It was a roller-coaster ride, and we couldn’t sleep at night sometimes thinking about whether we were going to lose our entire investment to the city’s demolition team.
At the end of the day, we were able to add significant value to the property. We refinanced our initial loan, and also pulled out almost all of our investment in the property with the cash-out refinance. The property now is a home to 3 tenants, and it cash flows well.
Here is a look at some before and after pictures:
