A clear vision and an 85% leveraged financing strategy turned distress into outsized returns.

In Los Angeles’s Miracle Mile, a distressed 1929 Tudor-style home sat waiting for the right investor to see beyond peeling paint and dated interiors. Others had walked away from the 3,000-square-foot property, but our client saw an opportunity to create a French country-style luxury home that would elevate the neighborhood’s aesthetic and deliver substantial returns.

The Opportunity

The borrower’s plan was to acquire the distressed property for $1,800,000 and undertake a comprehensive renovation to align it with other high-end properties in the area. The location offered strong market fundamentals, and the borrower recognized the potential to add significant value.

Spreo Capital structured a loan that provided the necessary capital for both acquisition and construction. The total loan covered 85% of the purchase price, with the remaining funds allocated as a construction holdback representing 85% of the total renovation budget.

Strategic Financing Structure

The loan structure gave the borrower exactly what was needed to execute with confidence. By financing both the acquisition and most of the construction costs, Spreo Capital eliminated the uncertainty that often derails renovation projects. The borrower could focus on execution rather than scrambling for additional capital mid-project.

The renovation transformed the property from a distressed asset into a stunning French country-style home. Every detail was carefully considered to create a luxury product that would resonate with the Miracle Mile market. The work was extensive, touching every aspect of the property to bring it up to the neighborhood’s luxury standards.

The project moved forward smoothly, with the construction holdback providing the financial certainty needed to complete the renovation without delays or compromises.

Exit Strategy and Outcome

Just a few months after the renovation was completed, the property sold for almost $3,000,000. This sale price represented a final After-Repair-Value (ARV) of 62% and exceeded the appraised ARV of $2,800,000.

For Spreo Capital, this deal demonstrated the power of strategic financing combined with a borrower’s focused vision. The 85% LTV structure provided substantial leverage while maintaining appropriate risk parameters. The construction holdback ensured the project had the capital needed to execute at a high level.

Lessons for Private Lenders

This Miracle Mile renovation offers several takeaways for private lenders who are evaluating similar opportunities:

Vision matters. The borrower didn’t just see a distressed property; they saw a specific end product that would command premium pricing in the market with the right design choices.

Structure enables execution. By financing both acquisition and construction at 85%, the loan structure gave the borrower the confidence to execute without financial uncertainty.

Market knowledge pays off. Understanding the Miracle Mile market allowed both the borrower and the lender to recognize the value-add opportunity and price the final product appropriately.

Quality drives results. The premium over the ARV appraisal reflected the quality of the renovation and the accuracy of the initial vision.

For private lenders, the lesson is clear: When you identify borrowers with a clear idea and the capability to execute, providing the right capital structure creates wins for everyone involved. The key is knowing the numbers, the market opportunity, and the borrower’s ability to deliver a product that commands premium pricing.