Today is perhaps the beginning of the end of the foreclosed Watergate Hotel’s sad days as a dilapidated property. Reports said a European group bought it for $45 million and plans to renovate it. Now that’s a huge rehabbing job – if they rehab it.

As far as the blogger is concerned, the hotel – famous for being the scene of a botched burglary that led to then President Nixon’s resignation – has over 250 rooms! It’s not clear what the company will do with it after the two-year renovation period. It doesn’t look like a fix and flip (apart from the obvious fact that two years of holding a property is not a flip anymore). So they will probably keep the property and monetize it. This is a case of millions of dollars of investments and is certainly not short-term real estate investing.

But have you ever considered the possibility? If it’s possible to rehab commercial properties, why shouldn’t it be possible with a huge hotel? After all, it’s still a property and it’s possible that it will be cash-flowing once brought back to good condition. Well, there are a few reasons why this foreclosed property won’t work as a rehabbing project.

One, the purchase price is simply too high. Second, the repair budget for something that huge is also too big (some experts said that it will take tens of millions of dollars to renovate it). And third, it just can’t be rehabbed in a short time and flipped in a short time as well. From this point of view, single-family homes remain the best properties for short-term real estate investing. Agree? Agree.

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