Three friends buy abandoned school for $100K and turn it into a high-end luxury rental

Three friends bought an abandoned school and turned it into a luxury rental.

Jesse Wig, 35, was offered a deal to buy an abandoned high school in Homestead, Pennsylvania in 2019. The school had been empty for nearly a decade.

Jesse, who worked as a real estate agent and investor, saw potential in the old building. However, he realized he couldn’t tackle the project alone.

So, he reached out to his friend, Adam Colucci, 35, a real estate investor and an owner of an audio-video business, and Dan Spanovich, a 42-year-old real estate developer and lawyer.

Together, in May 2019, they purchased the deserted school, Bowtie High, for $100,000, transforming it into luxury rentals with 31 units.

Starting renovations in early 2020, they completed the project in about 18 months.

Adam expressed to CNBC Make It their concern over the renovation costs, particularly when a bank withdrew support unexpectedly.

Despite this setback, Jesse, Adam, and Dan secured a $2 million loan from another bank, paying $12,129 monthly.

They also contributed $1.3 million of their own money. Overall, the renovation totaled $3.3 million, which continues to astonish the partners.

“I’m not sure we would have done the renovation in the beginning if we would have known what it was going to take,” Dan said.

Dan acknowledged the challenge of revitalizing old buildings but expressed confidence in finding a profitable use for the space.

Despite the building’s long vacancy, they eventually settled on its layout.

Former classrooms were converted into luxury rental apartments, while the old auditorium became a communal lounge.

The ground floor features a gym equipped with a basketball half-court, free weights, and Peloton bikes.

Initially planning for 60 apartments in the 50,000-square-foot area, they had only 25,000 square feet available for leasing due to the large hallways, staircases, gym, and auditorium, per the NY Post.

Colucci emphasized their commitment to preserving the building’s historical significance, collaborating with the National Park Services to maintain its original appearance.

Revamping the old high school qualified them for historic tax credits from Pennsylvania and the federal government, but it also required preserving its historical significance.

Bowtie High began renting out apartments in October 2021 and quickly reached full occupancy within six months.

The building houses 31 apartments, with monthly rents starting at $1,400 for one-bedroom units and $1,600 for two-bedroom units.

Some former classroom units at Bowtie High retain their original chalkboards and benefit from ample sunlight through large windows.

Additionally, all apartments in the luxury rental are furnished with stainless steel appliances, in-unit laundry facilities, and walk-in closets.

Later, Adam discovered the nearby school for sale, but it was already under contract for by another buyer.

However, when that deal fell through, the partners bought it in 2020 for $90,000, with a $3.25 million mortgage.

“I knew that we needed to have it in our portfolio mainly because when you look out of the front windows, that’s what you see, so we could control what we see,” Adam said that time.

Moreover, Spanovich believed they’ll need more money than the mortgage provides to finish the school because it’s proven to be a more difficult project than Bowtie High.

The second school has 33 apartments along with amenities like a rooftop deck, indoor parking, and a communal lounge.

Renovations were completed in July 2023. The luxury rental apartments retained the original 14-foot high ceilings and concrete floors, which the partners successfully preserved and restored.

“Someone once told me that you’ll go broke buying beautiful buildings, so be careful,” Adam said. “Luckily we have Dan on our team, and he was able to figure out the logistics to make it work.”

“I’m invested in this area not only financially but from the aspect that I live here and I want the area to continue to improve,” Jesse added.

See how the three friends transformed an abandoned school into a luxury rental by watching the video below:

You can also follow Jesse Wig on TikTok to learn more about their rental apartments.