As a former Real Estate agent in Canada I know that there are three important factors when looking at properties – location, location, location.
This is a very unique property and currently an equally unique opportunity for a smart investor. The large building consists of four apartments on one side and what was the main home on the other, which has now been converted into a restaurant. There is also a large ground floor gallery that could easily be converted into an apartment, plus a very large studio on the second floor which has a new bathroom and could be converted into another apartment or rented out as an art studio.
The building was originally designed by a local architect and the current owner; however, he had some unusual ideas, some of them illegal, such as the far too small stairwell which would need to be upgraded to be legal. There are also no stoves in any of the apartment units, but these could be added. There are other issues with the water supply system which is currently gravity fed and not sufficient to service the apartments. There is an on-demand water heater but this does not work without a pressurized system which is easy enough to add. Off the restaurant are four bedrooms which could either be converted into much-needed conference rooms or there has been interest from a local religious group to rent the facility with accommodation for guests and meals provided by the restaurant.
If the four apartments were rented, which they are not because the landlord is asking ridiculous rents, together with the rent from the restaurant the property would sell in the four hundred thousand dollar range. Due to poor management and a failed business venture in Guadalajara the owner is currently in severe financial difficulty. The power has been shut off many times. The property taxes have not been paid. The internet service bills are not being paid, resulting in constant outages. The failed hot water system has not been repaired because there is no money for repairs of any kind. The washer and dryer break down frequently and need to be replaced. The pool is not properly maintained. As is all too common having an absentee landlord and no property manager causes many problems.
Adding to the value of this property is that the lot behind which was previously a very noisy working lot has been sold and a new house is under construction. Also one block away about ten new large-scale houses are nearing completion, which will increase property values in the area. There is an excellent opportunity to buy the property, rent out the apartments, which will be easy given the current rental crisis in the area, do the required renovations, then flip the property at a considerable profit. A better opportunity is to buy the property, do the renovations then rent out all the available space and hold on to the property as a long-term investment. A tenant has volunteered to act as Property Manager in exchange for a reduced rent. He has a construction background and would supervise the necessary renovations plus deal with any ongoing maintenance issues, so for the investor it would be a hands off investment.
Due to the current owner’s poor financial situation he has little choice other than to accept a much lower cash offer. He has moved his family to Guadalajara and has expressed many times that he wants to be out of this property. It is anticipated that an offer of two hundred and twenty thousand dollars may get a sign-back around two hundred and forty thousand, far less than the real value of the property.
This is an incredible opportunity for an investor who is smart enough to realize how good it is, both in the short-term to flip, and the long-term as an ongoing profitable venture.