Case Study: Single-Family Fixer Uppers

The Project
A partner and I purchased a series of single-family homes and condos in Los Angeles. Our goal was to fix them up and re-sell at a profit.

What I Did
After negotiating the purchase of each property, I put together and ran a crew to go through each house/condo. We cleaned them up, painted the interiors and exteriors, and made cosmetic modifications that we determined would give the biggest bang for the buck. I then listed the homes, negotiated and closed the sales.

The Results
We bought, fixed up, and sold nine houses and three condos over an approximately two-year period. We made a profit on each one, although on the house we put the most into we made the least profit. I learned a good lesson on that one – don’t fall in love with the project. In hindsight, we got a bit carried away in making it “nice” and found out that our ideas of “nice” were not the same as buyers’.

Case Study: 42-Unit Apartment Building

 

The Project
I purchased three lots with teardowns on them on Capitol Hill in Seattle on which to build an apartment building.

What I Did
I determined the mix and size of units and amenities to be included. After defining the project, I hired and managed the consultants to design and permit it. I raised the equity and debt and managed the investment partnership. I negotiated the construction contract, provided construction management, and held the contractor’s feet to the fire to complete the contract as agreed and obtain the CofO. After the building was complete, I hired the management company and closely supervised their initial lease up campaign and subsequent property management. After seasoning the building, I hired a broker and negotiated and closed the sale.

The Results
My partners and I made a substantial profit on the project.

 

Case Study: Apartment Rehab

The Project
I purchased a 16-unit apartment building in north Seattle in order to create value by improving it. It was run down and had no curb appeal. The drug culture had moved in.

What I Did
I began to rehabilitate the units one at a time to keep vacancy expense down. I converted a large unused storage room into another bedroom. I re-roofed the building and enlisted in a city program to replace all the windows at deferred and reduced cost. To increase the curb appeal, I painted the building and cleaned up all the long-ignored plantings. I made a deal with a larger adjacent building to share a manager; this meant we had more doors to manage, which allowed us to pay for a better manager.

The Results
My almost daily coat-and-tie presence increased what the druggies perceived as “heat”, and they left. I replaced them with good tenants, and rents and cash flow increased. Tenant turnover was reduced. Deferred maintenance was reduced. I operated the building for several years and sold it at a profit.

Case Study: Los Angeles Condominiums

The Problem
The company I worked for developed a 40 unit condominium project whose builder folded just prior to completion. On top of that, the condominium market had recently deflated.

What I Did
I moved my office into a nearly-completed unit and managed the subs to complete the units. At the same time, I started an in-house sales program to begin pre-marketing. I led sales tours through the project, negotiated purchases, hand-held buyers and agents during the closing process, and negotiated warranty work with buyers and sub-trades.

The Results
Our company was pleased that my work allowed them to break even on the project.

Case Study: Baton Rouge Industrial Park

The Problem
My client bought a defunct manufacturing plant in which to put a new machine shop he was starting. What to do with the rest of the property?

What I Did
I converted the other buildings into a light industrial park. I negotiated leases with both national tenants and local companies and managed the property. I found and hired a broker, managed her, and ultimately sold the property to local investors.

The Results
The owner got a cash flow over a number of years and then got his money out and then some.

Case Study: Albuquerque Office Building

The Problem
A private Seattle lender took back an empty 60,000 sq. ft. office building in a market with 18% vacancy. The roof leaked, the elevators did not work, and the building looked like a sore thumb. The lender’s goal was to minimize their loss and get back to cash.

Before:

What I Did
I put together a recovery plan to improve the building and its marketability, and turn it into an investment with a positive cash flow and a decent yield up until a sale. I demonstrated the plan in a step-by-step pro forma of costs, cash flow, NOI, IRR and value. Today, I am “herding the cats” for the lender to ensure the various players interact as and when they should so the plan is achieved.

The Results
This is a current work in progress and the lender is enthusiastic about the program.

After:

What Dedon Consulting Offers

Bob Dedon uses the same steps on every project in order to get successful results:

  • Define the vision closely so the consultants remain focused in their solutions.
  • Make detailed financial models.
  • Find, manage and motivate team members.
  • Keep tasks on track to get them completed on time and budget.

What Dedon Consulting offers:

  • A roadmap back to cash.
  • Financial implications of different strategies.
  • Recommendations to optimize value.
  • Timeline projection.