He Bought a Drug Motel for $1.6M and Filled the Pool

The Pool That Should've Stayed Filled — Why destroying the "best feature" was actually the smartest move

Location vs. Condition: The $1.6M Question — How a property with drug dealers became a goldmine

The Squatter Loophole Nobody Talks About — Two years of free rent and the zoning hack that prevents it

Double-Fridge Strategy That Changes Everything — The psychology behind apartments vs. extended stay perception

The "Anyone Can Do This" Lie — Why optimism without expertise creates expensive disasters

Questions He Didn't Answer — What the numbers really need to show

What This Means For Your Conversion — Lessons you can actually use

I came across a Moses Lake motel conversion video recently, and something made me hit pause.

It wasn't the before-and-after shots. It wasn't the dramatic transformation story. It wasn't even the $1.6 million price tag on a property crawling with drug dealers and squatters.

It was the pool.

The owner filled it in. Completely. Turned it into a community garden.

And I thought: this guy actually gets it.

See, most people converting hotels make the same mistake. They see that mid-century pool and think "amenity." They imagine families splashing around on summer afternoons. They picture themselves marketing "resort-style living."

They're wrong.

That pool is a liability sink wrapped in chain-link fencing that screams "cheap motel" louder than a neon vacancy sign.

But this Moses Lake project teaches way more than just pool strategy. It's a masterclass in what works in hotel conversions—and what everyone watching on YouTube is probably missing.

The owner wrapped up his video by saying "anyone can do the same thing." And look, I appreciate that confidence in people. But as someone who's done four hotel conversions myself and analyzed hundreds more, I need to give you the reality check that video didn't.

Not anyone can do this successfully.

That doesn't mean you shouldn't try. It means you need to understand what he did right, what challenges he breezed past, and what it actually takes to pull off a conversion that doesn't bankrupt you.

Let me break this down.

The owner bought a property with:

For $1.6 million.

Your first thought: "Why would anyone touch that disaster?"

Here's what he saw that most people miss: location is everything.

This wasn't just any failing motel rotting away on the wrong side of some forgotten highway exit. It was in the heart of Moses Lake, Washington. Great street. Near downtown nightlife. Adjacent to the actual lake.

That's the geographic trifecta for conversion opportunities.

When I evaluate distressed properties, I always ask the same question: What is the best possible use for this real estate given its location, zoning, and market demand?

A terrible motel in a terrible location stays a terrible investment no matter how cheap you buy it. But a terrible motel in a great location with strong fundamentals? That's not a problem property. That's an opportunity wearing a disguise.

Moses Lake offered:

He understood something crucial: you can't fix a bad location. But you CAN fix brick walls, leaky roofs, and drug problems.

My Take: This is highest-and-best-use thinking in action. He nailed the fundamental principle that separates successful investors from people who lose their shirts. Location beats condition every single time.

The property condition was fixable. The location was already perfect. That's the deal.

Okay, back to that pool decision.

When he announced he was filling it in, I guarantee 90% of people watching thought he was insane. "You're destroying the best feature!"

No. He was eliminating a liability while creating actual value.

Here's what most rookie converters don't understand about mid-century motel pools:

Unless you're dealing with resort-style pools—beach entry, swim-up bars, sophisticated design features that actually compete with modern amenities—that rectangle hole in the ground surrounded by chain-link fencing looks like a prison exercise yard.

Your future tenants don't value it the way you think they will.

Instead, that space becomes:

He filled the pool properly (permits, proper compaction, the whole deal), then transformed that space into a community garden with pergolas and seating areas.

Why This Was Genius:

Community gardens, barbecue stations, picnic areas with shade structures, even dog parks—these create actual value your tenants will use without the monthly chemical bills and liability insurance increases.

Think about it: would you rather pay $200-400/month maintaining a pool that half your tenants are scared to use, or create a space where families actually gather, plant vegetables, and build community?

What I Might've Added:

If I were consulting on this project, depending on the demographics, I might've also considered:

But his garden approach works perfectly for affordable housing tenants. It gives them ownership, purpose, and a reason to stay longer.

The pool decision alone tells me he's thinking like an operator, not an amateur watching HGTV.

Here's where the video got real for about 15 seconds before moving on.

He mentions—almost casually—that a squatter lived in one unit for approximately two years.

Two. Years.

Let that sink in. Someone occupied his property, presumably paid nothing, and couldn't be removed for 24 months.

He moved past this quickly, but let me tell you: this is every landlord's nightmare, and it's getting worse in tenant-friendly jurisdictions across the country.

The Problem:

In many markets, local laws heavily favor tenants. Landlords can spend months or even years trying to evict non-paying occupants while still covering:

You're bleeding cash while someone lives rent-free in your property, and the legal system protects them more than it protects you.

The Loophole:

Here's where strategic zoning becomes your secret weapon, and I'm not sure he fully explained this in his video.

If you keep your property's commercial or C2 zoning instead of converting to multifamily residential, you operate under transient housing laws rather than landlord-tenant laws.

This changes everything:

Critical Disclaimer: I'm not an attorney. Every jurisdiction has different laws. You MUST verify this strategy with a local real estate attorney who specializes in landlord-tenant law before implementing it.

But in many markets, this is a legitimate advantage of keeping hotel/motel zoning intact instead of converting to traditional multifamily.

My Take:

I don't know from the video whether he kept commercial zoning or converted to residential. If he converted to residential, that squatter situation could've been even uglier than two years. If he kept commercial zoning, that's a strategic move that protects him going forward.

This is exactly why I hammer home understanding your local municipality requirements before you ever make an offer. The zoning strategy you choose impacts everything—financing, operations, legal protection, exit strategy.

It's not sexy. It's not Instagram-worthy. But it's the difference between profit and catastrophe.

Let me give him credit here: he actually shared numbers. Most people in this industry talk about "amazing returns" and "cash flow" but never show you real data.

What He Disclosed:

Major Capital Improvements:

My Analysis:

At 50% renovation scope with gut-level work plus kitchenettes, he likely spent between $15,000-$25,000 per renovated unit depending on finishes and local labor costs. For this level of transformation, that's actually conservative and smart.

Charging under $1,000/month in Washington State for quality affordable housing is exceptional. He's serving a real market need while (presumably) hitting profitable returns.

What I Want to Know (That He Didn't Share):

These aren't criticisms. These are the questions that separate surface-level understanding from actual expertise.

Why the Phased Approach Works:

His decision to renovate 50% now and tackle the rest later is legitimately smart:

✓ Generates cash flow from stabilized units during construction ✓ Tests market rent assumptions before over-investing ✓ Allows for phased capital deployment (preserves liquidity) ✓ Maintains some occupancy during heavy construction phases ✓ Lets you learn what works before replicating across remaining units

If I were advising him, I'd want to see a detailed pro forma showing:

But based on what he shared, he's executing smart strategy.

This is where he really proved he understands conversion psychology.

He installed full kitchenettes in every renovated unit:

Why This Matters:

Without a kitchen, you have extended stay. With a full kitchen, you have apartments.

The psychology is incredibly powerful. Tenants perceive properties with proper kitchens as legitimate housing, not temporary accommodations where transient people crash for a week.

But here's what I really love—the double-fridge strategy.

Most converters would install that mini fridge (because it's cheap and comes with the kitchenette package) and call it done. He went further and added a full-size refrigerator too.

What This Accomplishes:

If you want your conversion to compete with traditional apartments instead of sketchy weekly motels, the full-size fridge is non-negotiable. He gets this.

The Conduit Compromise:

He mentions that the brick walls behind drywall required exposed conduit runs for electrical outlets (needed for the cooktop, microwave, and additional outlets).

He's right that exposed conduit doesn't look as polished as recessed outlets. But he's also right that functionality beats aesthetics when you're operating in the affordable housing space.

Your tenants care more about having working appliances and reliable electricity than Instagram-worthy walls.

Where I Might Differ (Depending on Budget):

If the numbers allowed, I might've explored:

Not saying his approach is wrong—it's cost-effective and functional. Just showing there are options depending on your budget and target tenant profile.

But the core decision to install full kitchenettes with double fridges? That's the single most important transformation in hotel-to-apartment conversions, and he nailed it.

Toward the end of his video, he says something generous: "Anyone can do the same thing."

I genuinely appreciate that optimism and confidence in people. It's admirable.

But I'm going to level with you in a way that video didn't: not anyone can do this successfully.

I've personally failed on a conversion project. I've also succeeded on others. The difference between success and failure comes down to three things most people skip:

1. Proper Feasibility Studies Before You Make an Offer

You need to understand:

Most failed conversions skip or rush this phase because they're excited about the opportunity. The property looks like a steal. They fall in love. They make an offer before doing the hard work.

Don't be most converters.

2. The Right Team Assembled BEFORE You Close

You need:

You can't figure this out as you go. By the time you realize you have the wrong contractor, you've already burned six months and $200,000.

3. The Discipline to Walk Away From Bad Deals

I've walked away from deals where partners, shareholders, and other investors said, "This is a deal. We should do it. You're being too conservative."

It wasn't a deal. It would have been a nightmare.

The discipline to walk away is more valuable than the excitement to buy. You make money when you DON'T buy the wrong property, not just when you close on the right one.

Common Pitfalls That Kill Conversions:

My Take on "Anyone Can Do This":

Did he execute this Moses Lake conversion well? Based on what he shared, yes. Smart decisions on location, pool removal, kitchenettes, phased renovation.

Could someone watching his video replicate his success? Maybe. If—and this is a huge if—they do the unsexy work of feasibility studies, municipality meetings, engineer consultations, contractor vetting, and thorough due diligence BEFORE they fall in love with a property.

That's where conversions are won or lost. Not in the YouTube video. In the months of preparation nobody sees.

If I could sit down with this owner and analyze his project over coffee, here are the questions I'd want answered:

1. Zoning Strategy: Did you keep commercial/transient zoning or convert to residential? What was the strategic reasoning? How did that decision impact your financing options?

2. Capital Structure: What was your debt structure? Conventional financing, bridge loan, private capital, seller financing? What were your terms?

3. Actual Returns: What's your actual cash-on-cash return right now with 15 units stabilized? What's your projected IRR over a 5-year hold?

4. Municipality Battles: What was the most difficult regulatory hurdle? How long did permitting actually take? What surprised you?

5. Cost Overruns: What was the biggest expense that came in way over budget? What came in under budget and surprised you?

6. Squatter Resolution: How did you eventually get that two-year squatter out? What legal process did that require? What did it cost?

7. Exit Strategy: Are you holding long-term for cash flow, planning a cash-out refinance to pull equity, or positioning for a sale in 3-5 years?

8. Lessons Learned: What's the one thing you'd do completely differently if you started over tomorrow?

These aren't criticisms. These are the questions that separate surface-level content from actual expertise.

His video was valuable. But these are the details that determine whether YOU should attempt something similar.

Let me pull together the lessons you can actually use:

What He Absolutely Nailed:

✓ Location selection — Near lake, downtown, strong fundamentals (you can't fix bad location)

✓ Pool removal — Converted liability into community asset (gardens beat prison-yard pools)

✓ Kitchenette execution — Double-fridge strategy transforms perception from motel to apartment

✓ Phased renovation — 50% stabilized generating cash flow, 50% future (smart capital deployment)

✓ Affordable housing mission — Serving real market need while hitting profitable returns

What Wasn't Clear:

⚠ Detailed financial returns and hold strategy (IRR, equity multiple, exit plan)

⚠ Zoning decisions and legal structure (commercial vs. residential, entity setup)

⚠ How he actually resolved the squatter situation (legal process, timeline, cost)

⚠ True all-in costs per unit (not estimates—actual receipts)

⚠ Municipality challenges and timelines (permitting reality vs. expectation)

What You Should Remember:

→ Location beats condition every time. A distressed property in a strong location is an opportunity. A perfect property in a bad location stays a problem.

→ Challenge conventional wisdom. Filling pools, focusing on affordable housing, installing double fridges—contrarian moves that create real value.

→ Kitchenettes transform perception. The difference between extended stay and apartment is a full kitchen. Don't skip this.

→ Phased renovations work. You don't need to renovate everything at once. Stabilize half, generate cash flow, then tackle the rest.

→ Zoning strategy matters more than you think. Commercial vs. residential classification impacts financing, operations, legal protection, and exit options.

→ Not everyone can replicate this without proper preparation. Feasibility studies, team assembly, and due diligence aren't optional steps.

If this Moses Lake project inspired you to explore hotel or motel conversions, here's your actual next-step roadmap:

Phase 1: Education (Do This First)

→ Study your target markets deeply → Understand zoning laws and municipality requirements → Learn what similar conversions have sold for in your area → Identify demand drivers (employment, tourism, housing shortage)

Phase 2: Team Building (Before You Hunt Deals)

→ Interview conversion-experienced general contractors → Find MEP engineers who understand adaptive reuse → Connect with real estate attorneys specializing in conversions → Build relationships with lenders who finance value-add projects

Phase 3: Deal Analysis (Before You Fall in Love)

→ Run feasibility analysis on every property → Understand realistic renovation costs (add 30% buffer) → Model conservative rent and occupancy assumptions → Identify all municipality approvals needed → Calculate true returns (not best-case scenarios)

Phase 4: Expert Guidance (Before You Sign)

→ Work with someone who's done this before → Get independent verification of contractor estimates → Have an attorney review all contracts → Structure your entity and financing correctly → Build in contingencies for surprises

Red Flags That Should Make You Walk Away:

✗ Sellers who won't allow thorough due diligence or inspection periods

✗ Properties in declining markets with no demand drivers or employment growth

✗ Municipalities openly hostile to conversions or adaptive reuse projects

✗ Structural issues that would exceed 40% of your purchase price

✗ Markets with extreme tenant-friendly laws and no transient housing options

✗ Deals where you're rushing to beat other buyers without doing proper homework

I've done four hotel conversions. I've analyzed hundreds more. I've walked away from deals that looked perfect on paper but would have destroyed my investors.

I can help you:

→ Analyze whether a specific property actually makes sense (before you waste time and money)

→ Identify hidden problems sellers are hiding (or don't even know about themselves)

→ Renegotiate pricing based on discovered issues (saving you tens or hundreds of thousands)

→ Make the informed decision to walk away (the most valuable advice is sometimes "don't do this deal")

Want my complete due diligence checklist? Reply to this email with "CONVERT" and I'll send you the exact 47-point inspection framework I use to evaluate every conversion opportunity.

Have a specific property you're considering? Let's talk strategy before you make an offer you might regret. Book a feasibility consultation and we'll analyze it together—zoning, numbers, municipality requirements, realistic renovation scope, the whole picture.

Just want to stay connected and learn more? Keep reading these breakdowns. I analyze real projects, share what works (and what doesn't), and teach the principles that separate successful conversions from expensive disasters.

The Moses Lake owner did something admirable: he took a property with drug dealers, squatters, and structural failures and turned it into stable housing generating cash flow below market rents.

That's adaptive reuse done right. That's creating value while serving your community.

But here's what I want you to remember: his success came from preparation you didn't see in that video. The feasibility analysis. The team building. The due diligence. The municipality negotiations. The contractor vetting.

The YouTube video shows the transformation. It doesn't show the hundreds of hours of unglamorous work that made the transformation possible.

If you're serious about conversions, focus on the part nobody films.

That's where the real work happens.

What's your take on this conversion? What questions would you ask him?

— Andrew