A successful investment: in Pennsylvania, a man bought an abandoned school and converted it into a residential building with 31 apartments
When an abandoned high school in Homestead, Pennsylvania went up for sale in 2019, Jesse Wieg saw it as a profitable opportunity. He bought it for just $100. Now it's an apartment building with 000 apartments, according to CNBC.
34 year old real estate agent Jessie Vig bought the school and then connected with Adam Colucci, a 35-year-old real estate investor and owner of an audio-video business.
“I was told about the school and, frankly, I wasn’t sure it made sense to do anything with the building,” Vig said. “But at this price, I had to purchase it, and I was hoping that in the future we could find a good plan.”
For two years, Vig and Colucci discussed what to do with the building. They considered it as a wedding venue, a beer garden, and even a WeWork space.
“After two years of work, all the professionals told us that all roads eventually lead to residential apartments,” Colucci said.
The two realized they needed help and contacted Dan Spanowicz, a 41-year-old full-time real estate developer and apartment building manager.
“These old buildings can be very difficult to rebuild,” Spanovic said. “We were willing to take risks, no matter how much we might gain from it. We knew that for that price we could find some use for it that would generate enough profit to satisfy everyone.”
Former classrooms have become new modern apartments with built-in washer and dryers, and the auditorium has been transformed into a shared space designed by Chrissy Norman of C Norman Designs. They also added a full gym with half a basketball court, kettlebells and Peloton bikes on the ground floor.
With so much space, the three partners hoped to get around 60 apartments.
In the end, they were left with space for 31 apartments due to large corridors, stairs, a gymnasium and an assembly hall.
Colucci added that it was important to them that some elements of the school were preserved in the building. “We have worked closely with the National Park Service to preserve its historic significance,” he said. “We have done everything possible so that the school retains its historical appearance.”
The partners received federal and Pennsylvania tax credits, though they did not disclose the exact amount.
After purchasing the school in May 2019, construction on the building began in 2020 and was completed in October 2021.
There are 27 one bedroom apartments and four two bedroom apartments in the finished product. The partners also installed solar panels on the roof of the school to help reduce environmental impact.
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Leasing began in October 2021, and six months later the building was 100% full.
Spanovic said the building's rent was $1400 a month for some 1-bedroom apartments and up to $1650 for 2-bedroom apartments.
When it comes to splitting profits and expenses, Colucci said he, Vig and Spanovic share everything on a building-proportional basis.
Partners are already starting their next projects
Colucci learned that the school across the street from their first home was up for sale.
Vig was a little hesitant at first, but Colucci and Spanovic were ready to go. “Jesse came in and we bought the building and I think it was an amazing move. We are very happy about this and we are very lucky,” added Colucci.
This second school, bought in August 2020, cost them $90. But Spanovic said their experience with this school was very different. Their first property needed a complete renovation. The second - no, but the building really looked like a haunted house.
“When buildings look beautiful, a lot of people want to buy them, so you almost want them to look like haunted houses – you have less competition,” Spanovic added.
This new home is in need of a major overhaul, which includes fixing a leaky roof. They also need to carry out an environmental study to ensure that the structure of the building is in good condition despite years of water damage.
Colucci said the second school was in worse shape than the first school and would be more difficult to repair.
It is planned that the second school will consist of 33 residential units, consisting mainly of one bedroom and a few studios.
“Someone once told me that you would go broke if you fell in love with beautiful old buildings, so be careful,” Colucci said. “Fortunately we have Dan on our team and he was able to figure out the logistics to make it work.”
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The partners said the plan is for residents to be able to access amenities from both buildings, such as an auditorium in the first school, a two-story garage and a rooftop terrace that is available in the second building. Over time, Vig, Colucci and Spanovic bought two more schools.
Vig says his biggest takeaway from these projects he and his partners have worked on is that buildings change society.
He lives just a few miles from here and is a member of this community himself. “It was helpful and nice to see the community improve,” he said.
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