Turning a Loss into Payroll:
The Story of a Risky Houston Deal

Asset: 7440 Cypress Creek Pkwy | Houston, TX

Type: 10,000 SF Medical Office

Outcome: $325K Profit

We Bought a Building in a City We’d Never Been To

Sometimes, gut instinct overrides spreadsheets. We bought a medical/retail property in Houston — a city we had never set foot in — in an asset class we knew almost nothing about.

We won the auction for $892,000 — $200K under our max bid. At just $89/SF in a market with rents at $20–$30/SF, it looked like a dream: a potential three-year payback.

We threw in our own cash, borrowed from friends, and moved forward with sub-50% leverage, backed by a personal guarantee.

Then Houston Happened

Within a week, we were welcomed by a meth-addicted “master electrician” who cut and stole the building’s underground copper wiring. Scrap value: $2,543.24. Replacement cost: $25K. (Pro tip: Aluminum wiring is theft-proof but more expensive.)

We met our new neighbors — residents of the tent encampment in our front lot. They liked the location for its direct sun, visibility, and scorching 100° temps.

We canvassed every retail store within a mile radius. Called every medical lease broker. Their advice? “You’re 20 years too late. Medical moved west to Tomball.”

Still, we painted the building in trendy colors, listed on Loopnet, Crexi, Facebook… and waited.

Silence. Then a Lifeline.

Three months in: crickets. No calls. No traction. My partners pushed to sell at a loss — said it was a distraction, a liability, a headache.

They weren’t wrong.

But I wasn’t ready to be wrong either.

So I called every medical broker in Houston. One finally came through.

The Exit

Six months later, we sold the building for $1.5M — not the $2.5M dream number, but still enough.

After accounting for $133K in transaction costs and $150K in holding/hard costs, we cleared ~$325K in profit.

Split three ways, it was just enough to cover payroll for a few months — and a powerful reminder:

The buy price ($89/SF) is what saved us.

Deal Breakdown

Purchase Price: $892,000

Square Footage: 10,000 SF (2 units of 5,000 SF each)

Status at Acquisition: 100% Vacant

Sale Price: $1,500,000

Transaction Costs: $133,000

Hard/Holding Costs: $150,000

Net Profit: ~$325,000 (split 3 ways)

Lessons Learned

• Know your market — or be prepared to learn the hard way.
• Buy right — your basis will always be your safety net.
• Vacancy hurts — but resilience pays.

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