Montrose-area real estate investor (and frequent Swamplot commenter) Cody Lutsch expects to close later this month on 3 apartment buildings on Holman just east of HCC between Crawford and 288 that he calls “the worst of the worst” in Midtown. A web listing for the properties cautions potential buyers: “DO NOT WALK THE PROPERTY AND DISTURB THE TENANTS. (it’s for you own good, i mean it).” Lutsch calls the group of buildings, which date from 1938 and has seen half a dozen owners over the last 10 years, “very very rough . . . Police are always going over there, there is drugs, prostitution . . .”
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The buildings are at 1624 and 1628 Holman . . .
and 3508 Mosley Ct.:
Each is 2 stories, and sits on top of its own garage. They total 49,815 sq. ft., on a little more than half an acre. Lutsch tells Swamplot he wants to keep the buildings “as ‘original’ as I can, while still making it modern, safe, and attractive. . . . The place needs a TON of work.”
In advance of closing, Lutsch says he’s already begun taking over management of the 56-unit property, as well as working on repairs and upgrades. One “model” unit is already complete; Lutsch says he’s already ordered supplies to complete work on 8 more.
- 1624, 1630 Holman & 3508 Mosley [LoopNet]
- Previously on Swamplot: Third Montrose Skylane Apartment Building Turns Over, A Neighbor’s Plans for the West Alabama Skylanes
Photos: AndreÌs 
FernaÌndezâ€Cueto
I live not far from there, thanks Cody. I’ve often wondered about those places and why they haven’t seemed to improve with everything else. I would guess it’s probably the tenant situation. Good luck on your endeavor though, I am excited to see the result.
I love that complex. It really has a lot of potential. I have fantasized about purchasing, renovating, and owning that property for a long time. Congratulations.
Great news! Any more insight as to what the end result will be? I’m just a few blocks away and love the bits of history that are spread throughout this part of midtown – would love to see some tasteful preservation.
That is so cool. You go, Cody. Thanks for showing the world that all that is old is not necessarily junk, even if it’s not currently shining brightly. I look at these buildings and see a ton of opportunity; I’m glad that somebody with the funds to realize that opportunity agrees.
I’m not sure what Cody’s business plan for this cesspool is, but after ballparking the numbers, I would insure well, burn it down, and sell the land.
Don’t forget to research the City’s Historic Site Tax Exemption program for landmark properties. It’s not likely to be the driving force of your project. But, it’s great to get a little bit back, if you are planning on restoring the exterior and renovating the interior.
I love these buildings. I had pretty much assumed they’d be torn down and replaced with townhouses, so this is fantastic news.
sidenote:
commonsense, is there anything in the world that you actually like? Every comment I’ve ever seen from you has been incredibly negative.
Cody, do you own the former Skyline, or whatever they were called, Apartments on W. Alabama and the spur? I think I’ve heard that somewhere. I drive by those every day on my way to work and if those do belong to you and you do as good a job on your new purchase as you have done on those, it will be amazing! Thanks for having the courage and taking the time to rehab these properties into something great, instead of bulldozing and putting up cookie-cutter townhomes!
Great to hear, buildings may be worn but they look very sterdy, wish Cody the best on getting these done, hope he post progress pics along the way.
Thanks for the kind words. A few notes:
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1) Due to some recent city red tags regaring safety issues, I got permission to begin work before closing. My fear was that I would close on the property only to have the city shut it down. So I’m having some licensed contractors pull permits to get some urgent things taken care of. Nothing giant. Just lots of small deferred maintence issues.
2) I haven’t taken over management yet in terms of dealing with the existing tenants but I have begun cleaning out vacant units and doing some upgrades / fixes to them for our new tenants. Basically I wanted to get a head start.
3) I’ve put a new property manger in place about a week ago, who will only be working with new tenants and managing the large project of getting the building fixed up (like replacing the 100s of small broken interior windows facing the hallways that were all previously boarded up). He won’t really deal with the management of existing tenants too much till close.
4) So far we’ve fixed up over 10% of the units and leased out about that same number. Everyone who has taken a fixed up unit likes what we’ve done and our plans moving forward.
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The building is great. It has so much charm inside. It has its flaws but its just from neglect rather than being incurable. We have a ton of upgrades planned for the building as well as the units. All around the property you see a lot of new investment. This particular property has been the main source of blight. I’m happy I’m able to do a bit to help.
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The property is exactly a mile away from another building we have in Montrose which has smaller units and stays jammed full for higher rent. So being in midtown, so close to downtown and Montrose, and having such a high walk ability and public transportation score, we are sure the demand is there.
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Shameless plug: we are leasing these all bills paid units for $600/month. Or $550/month for swamplotters/friends :). They are studios, but a pretty good size. I’ll get someone to put some updated pictures/info on our site.
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Commonsense: Nothing about the property that causes you to call it a cesspool is unfixable. Why knock down a cool 1930s unique set of buildings when you could fix them up?
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If anyone wants to come down and say “hi” and check out what we are doing, feel free. I try to be there a few hours a day but I have a full time manager there who is doing showings and trying to manage about 12 workers.
Go Cody!!
Props to you, Cody. Best of luck. I hope you make this thing shine!!!!
Awesome work, Cody! Look forward to seeing the fruits of your labor…that area needs some TLC.
Clerestory windows? Definitely a pre-A/C feature.
I remember when the apt. property across from Elizabeth Baldwin Park looked just like this one. It can be done.
But I’ll never forget this dump after TS Allison. The swimming pool in underground parking was beyond belief.
Here’s my free advice of the day, Cody…
I’m sure you have your own business plan already in mind, but…
If you want to make an absolute killing on this deal, you should convert it into student housing. Remove every single one of the current tenants, and only lease to new tenants who can prove enrollment in X+ of hours of classes at UH/Rice/TSU/St.Thomas/HCC/all the MedCenter schools, etc.
At this price point, students will be all over it. In fact, they will pay a premium for it. The problem with many other “affordable” apartments in Houston, is that you have to live around other people who can only afford affordable apartments. The student restriction gives you a legit reason to keep out less desirable tenants, even if they could otherwise afford the rent.
The location is certainly on the shady side of Midtown, but what better way to lure tenants to the neighborhood than by promising them that every single one of their neighbors will also be a student?
At 56 units, you can make this work EASY with just students.
The units may be really small, but with some smart design, I’m sure you can configure some of the common areas into awesome places for students to hang out and mingle with other residents. You could turn this thing into a really cool place to live.
This could be a financial home run.
I also live in the area and have been part of the investment in the area. Those buildings are really dragging things down and I am really looking forward to any improvement of that property. Do you plan on keeping / using the underground parking or do you want people to keep parking on the street?
Craig: They never had proper sump pumps installed. Luckily, the underground parking is graded correctly for it. Currently when it rains they have a single old pump they’ll take from building to building.
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We bought some new ones but will wait to install them till they can be secured properly. I guess they used to leave in pumps down there but people would, *shock*, steal them.
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My guys have been sweeping and powerwashing the parking area and will soon be painting the block. It’s nasty down there at the moment.
That’s an interesting forgotten quadrant of midtown. Nice to see someone isn’t afraid of putting in some work to make these cool old buildings viable.
I gotta ask about the mesh wire between the floors..is that original or a safety feature because of current tenant activitys?
Good job Cody. The project sounds insane from the description but it is great to see someone trying to hold on to the past while looking towards the future. Much like many others on here I am happy to see that another set of cheaply made cookie cutter townhomes wont be going up. Cant wait to see the final product. What is your website to see the pics so far?
Cody –
Awesome news! I live in the area and was wondering if you expect the tenant quality to improve as the building renovation progresses? There are definitely some nice families living there, but unfortunately there are also some drug dealers as well as people who like to use prostitutes. Also do you have any plans on how to cut down on the amount of trash that stays on the ground and in the street around the building? This is probably a question for your building manager, but as the building is improved I would hope the trash and old furniture situation could be improved as well. Best of luck with your endeavor. The residents of mid town applaud you!
Thank you!
Every once in a while I get a little turned around in Midtown and find myself driving by these. Looking down into those parking garages always gave me the creeps.
And hey, I just found the CL ad for what it’s worth: http://houston.craigslist.org/apa/3290572889.html
Thank you so much for caring about the history of this city and not just tearing it down. The city needs more people who care like you mang.
Funny, but it seems the outpouring of kudos for Cody and the idea of preservation over demolition has finally put a sock in the negative mouth of commonsense. Will miracles never cease?
Glad to know there are so many in favor of seeing a jewel in the rough, regardless of location in our growing city.
It’s odd that they built interior windows running the length of the hall. That seems like it could interfere with tenants’ privacy. But I LOVE these old apartments. There are some near the museum district (not sure of the street) with glass block window accents and they look charming, even though they do have window units poking out. I’d love to see more interior shots. Let us know when and where we might be able to see those, if available.
Just curious, from a marketing standpoint, are you planning on clearing out buildings or sections and basically “starting over” with a new tenant mix, or are you going to try to put in place new, more qualified tenants right in with the current mix? If it is/was as bad as previously stated with the crime and drugs, won’t it be difficult to get better people to go in? If they do, and there is still too much hard-core riff-raff, it could scare off good new tenants who end up just breaking their lease and skipping out rather than deal with it. I applaud saving this cool building(s) and I wish you all the success, but I am curious how you are going to address that component, because it will definitely be a challenge.
Attracting the ‘first wave’ of good tenants when you have a newly acquired ugly building isn’t easy. In this case, we started upgrading a few units prior to close so we would have something to show people. As for the building itself, we’ve had to just explain our plans. With limited resources we can attact units for new tenants or the building exterior itself for the same goal. It’s a balance.
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No doubt a lot of people that would take a unit if the building were finished will pass on it how it is now (even knowing our plans). However with enough people coming by, you can still get enough people in to make it work. It just may be 1:10 now vs 1:3 if it were already done.
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To help attract the ‘first wave’ you also can offer a $700+ unit for $550 as sort of an “early adopter” discount. We did a lease yesterday for a young lady moving in mid December. So by the time she moves in there will be significant improvements yet she’s still getting that lower price. A reward if you will for taking a risk with us. I’m sure others will look now for a dec move-in date, pass, then come by next month and take the same unit but pay an extra $100. That’s fine with us too.
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We rarely go in and kick everyone out and start over. I know investors who do that. I don’t. We will upgrade tenants and units via attrition (and we are starting with about 15 empty – a good %). Plus, if any existing tenants are quiet and pay rent, it would be silly to remove them. And, to be frank, if someone is already there paying their rent I’m in no rush to spend $$$ on their unit. Upgrading via attrition allows capital improvements to be staggered.
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Thanks very much for the kind words. Doing this as an independent owner/operator isn’t easy so it’s nice to know others support keeping these types of buildings around.
That is a great location, so that may make it a lot more workable. There aren’t a lot of options for people in that price range & a lot that are, may have the same “tenant issues” but without the better trending and renovations. So hopefully it will work.
27 comments, all but one being positive.
Way to go. And good luck to you too.
Yes, Good luck and Thanks! for sticking your neck out.
Will you disclose if there have been meth labs on the property?
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Cleaning Up Meth Labs in Texas: It’s a Dirty Job, And Nobody Has To Do It
http://stateimpact.npr.org/texas/2012/10/02/cleaning-up-meth-labs-in-texas-its-a-dirty-job-and-nobody-has-to-do-it/
Let me begin by saying I support Cody’s right to do whatever he wants with his property. Sure, my comment was negative, but I take an extremely pragmatic view on real estate business. I’m not in the business of charity, social engineering, or some art project therefore I take a skeptical view on any project that does not utilize resources for maximum return.
Way to go Cody! Would love to see your business plan. And I appreciate your focus on attrition to minimize upfront upgrade expenditures. I am all for respecting historical design where it makes sense…it’s what grounds us. But then again, I’m in the process of building a house that looks like it was built 100 years ago and has been lovingly restored and modernized throughout the years.
Thanks for doing this Cody! I hope you make a bundle.
Rise, Ashby, Rise!
@ Marketing Wiz. I think you’re talking about the apts at the corner of San Jacinto & Binz. I used to live there in the early 90s. Really cool. All original in amazing condition. Lurie owns them & his dad built them. I eventually moved because he wouldn’t allow cable tv. Due to the location, there was very little reception….I could only get ch 26. Good times…
@ Cody- KUDOS to you! I’ve admired those buildings for a long time. Such an unusual design for Houston. And windows in the hall! Very cool. I wish you the best of luck.
It’s good to see that these buildings are going to be renovated.
I had to make a delivery there after dark around 1998 when I worked as a pizza delivery driver and I never went back after that attempted delivery.
When I approached the entrance to the building there were several drunk males hanging around the entrance to the building, once inside I heard loud hispanic music echoing throughout the building, the place was nasty and there were chickens/hens roaming the halls. When I made it inside the building, I briefly thought for a moment that I was in a third world country. After taking a few steps down the hall of the building there was a suddden erupture of gunfire coming from one of the units in the building. Needless to say, I ran out of the building and that was one customer that didn’t get his pizza delivered that night.
Capt: Yeah, I love the hallway with the windows. Leaves a lot of possibilities.
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Speaking of… If anyone is or knows a good color consultant, let me know (codymail at gmail is my person account). That’s our biggest weakness (design) and why we go with such boring / natural colors all the time.
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I figure there is such an opportunity to make the hallway area cool with various color and lighting. I have some ideas of what I’d like to do, and I’m going to paint a sample area, but I’m sure someone with a skill-set when it comes to that type of thing could do better. And luckily, under that nasty hall carpet is some really cool plank wood that we’ll fix up.
JC: I’m removing, but saving, a lot of the hardware being replaced. Like old door handles, latches, etc. If you’d like them for your project, come on by. I’m having all the workers save them in buckets.
You’re building this business, Cody – way to go!
You might approach HCC/Trinity Episcopal, and some of the other churches/museums on the Metro line – I’m thinking they would value having an inexpensive studio they could rent for guest artists, lecturers, etc. I know it has been a problem in the past for the Natural Science museum to put up guest curators who didn’t drive (the “Kremlin Gold” Russians, for example). FWIW – probably late to the party with this idea.
And @commonsense – “Not everything that counts can be counted.” (attributed to Einstein) Profit is a motive, certainly, the strongest motive, but sometimes meeting intangible goals ends up generating even more profit.
WW12: hehehe, thanks for the story. Feel free to bring pizza by again any time. I promise you’ll be fine. All* chickens have been removed
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(*most)
Nice work Sir, best of luck to you and kudos..
Hey, Commonsense, let’s be very practical about your “business plan.” Buying property, insuring it and then burning it down is fraud, which I’m sure you know. Since you have so much to contribute in terms of innovative ideas for redevelopment of older areas of the city, I suggest you limit your operations to Kingwood.
At the risk of stating the obvious, the reason for the interior corridor windows and clerestory, as well as the central corridor slot with metal grid, is for chimney effect for ventilation in the pre-AC days. Apartments of this vintage often had to resort to innovative ways to get ventilation, like the angled window bays of Wilshire Village. The grid looks like it’s part of the floor of the second floor corridor, which would be perfectly reasonable if you’re trying to create a walkable but air-permeable floor.
Temple, that comment was obviously tongue and cheek. My point is, according to my rough estimates, one could lose money or merely eek out a meager profit by renovating that project, whereas demolishing and building fresh should yield an industry standard and substantially higher profit.
I used to live near these and am glad to see them being renovated. That building was the primary problematic building in the area. With it improving, this will definitely help the neighborhood.
Well, I love the comments and Cody, good job! What is the square footage of these apts? I may have missed that somewhere in the comments. I might be looking for someplace soon, so that early tenant price sounds interesting. And within my retail job budget. lol
I am happy you are keeping that inside window detail.
So may cool buildings in Houston. I’m glad that there is a developer that understands and appreciates them.
Sally,
56 units and 49000ish sqft total leads me to think these are probably 600-700 sqft studios or at most 1 bedrooms.
I actually tried to talk Cody out of it.
This deal has so much hair on it; mortgage fraud, serious neglect, and the City being overly zealous about meeting code requirements, that I called him last month to get his reasoning. If anyone can pull this deal off, it is Cody Lutsch.
@Cody…appreciate the offer. Bummer, as I’ve already bought new replica hardware (at quite an expense, I must add). I searched salvage for originals, but couldn’t find the consistency I needed. I love what you are doing. I remember stories from my Dad who grew up here on the east side after moving from Chicago in the 30’s…it’s a shame that we throw all that history away. All the best to you.
Janak: If I recall, your words were “It’s a dog! No, it’s a dog with flees!”. hahaha. If you didn’t think that about everything I’d buy, I’d be worried ;)
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Lost / Sally: The units are not as big as HCAD would suggest as there is underground parking that I believe is taken into account. The units are larger than our other studios, but they’re no where near 600-700. I’d say 500SF max. I’m going to try to draw out and floor plan a unit today.
I just read this and want to add my kudos to the chorus. Best of luck on this project and thank you for having the vision, the funds, and the chutzpah to take on restoring these cool old buildings.
Cody and Lost…thanks for the info. I am getting interested. I will say the parking garages look pretty creepy. I went on google maps yesterday and “drove” myself thru the neighborhood, looks like some good things happening there.
Five hundred sqft seems pretty nice.
Cody, again such an interesting building, I will start keeping an eye out for your properties.
Good job Cody, that sure was a lot of work but something had to be done
As 2+ year tenant of a townhouse on Mosley Ct, I’m so so so very thankful for your efforts. When I first moved into the neighborhood, I saw some people/things on this street that I cannot unsee. It was like driving through the set of an uncensored Jerry Springer episode every day and night of my life. I’ve been watching the progress on these buildings since day one and am very impressed. Thank you SO MUCH!
I just submitted an application for a unit, after doing several drive-by’s (not the kind that involves a gun). At first I was apprehensive but am relieved to see positive comments from others that live near there. How exciting!!