10/26/2026
The receiver wants a 30-day, all-cash close. I need 90 days.
This is a Cleveland deal with a foreclosure, a receiver, and a 100-year-old building in distress.
The work it needs would cost about 3x what the building is worth in its current state.
The bank, the receiver, and the market seem to be looking at three different values for the same property. I am trying to make sense of that gap.
My read: the receiver's 30-day deadline is what the bank wants too. Banks want these off their books fast, and receivers work for the bank.
I need 90 days to run a smooth capital raise with my own investors behind me.
Here is what my numbers say. My general contractor gave me a repair estimate with a low end and a high end. Both of them cost more than the entire value of the building today.
How do I know what the building is worth today? Start with the money the building brings in after expenses. Divide that by the area's cap rate, which is 9%. The cap rate is the yearly return investors expect from buildings like this one. That is the income approach to value, and it is the same math the appraiser uses.
So the buyer has to fund the work before the building can reach that future value.
My numbers have to account for:
The cost to buy it.
The work needed to bring it back.
Cash set aside while that work gets done.
The interest I pay on the money I have tied up in the deal, about 12% a year.
The price has to leave room for all of that. An all-cash close does not make the repair bill go away.
So here is where I land: this deal only works at a lower purchase price and a lower total cost. The gap between the repairs and today's value is not a reason to walk. It is the reason the price has to come down.
Before you invest in a distressed property, ask the person running the deal to show you the full cost to buy it, fix it, and pay the bills until the work is done.
What would you do if the repair bill was bigger than the building? Cheryl Yetka
