Gelt acquired the 25-unit Venetian Apartments located in Bakersfield, CA on November 29th, 2010 as an REO from a small Orange County based bank. The property had previously sold for $1,750,000 in 2005. Gelt purchased the property for $900,000 with a $550,000 private money loan. A total of $450,000 was raised as equity. At acquisition the property had seven vacancies and well below market rents. The property had severe deferred maintenance and was poorly managed by the receiver in place. Tenants were also very frustrated with the management as they had not been taking care of their needs. Also, hot water took over ten minutes at times to be delivered to units because of the old boiler loop system that was in place.
Gelt understood the dynamics of this northeast sub market of Bakersfield having owned hundreds of other apartment units there. Gelt undertook a plan of action to upgrade all of the vacant units and all of the other units as the leases expired in order to stabilize the rent roll and ultimately increase the rents on the property. An aggressive marketing campaign would be required to change the image of this property and change it from "just another boring apartment community on the block of other apartments" to "the most desirable apartment complex on the block." Tenants were also complaining about not feeling safe on the property because of its open access to anyone.