San Bernardino apartment complex gets a new lease on life

Thanks to a public-private partnership, a rundown multifamily project has been restored and made livable. The Golden California Apartments could serve as a model for other residential restoration projects in the city, according to officials.

On Thursday, members of the San Bernardino City Council are scheduled to gather at an apartment complex at 1415 Date St. in the northeast part of the city.

The gathering, which will include remarks from council members and a ribbon-cutting ceremony, will mark the reopening of the 44-unit project, now called the Golden California Apartments. The structure has undergone a $2 million renovation since being shut down by the city one year ago.

That renovation happened because of a partnership between San Bernardino and the local investment community, according to people on both sides of the arrangement.

The multifamily project has a new water and sewer system, along with heating and cooling upgrades. Several amenities have been added, including a courtyard, play area and barbecues.

Also, each unit has its own heating and air conditioning system and its own water source and shut-off valve.

San Bernardino officials hope the renovated property next to Jefferson Holt Elementary School will make the neighborhood a more attractive place to live and improve its long-term economic prospects.

“This is the kind of upgrade we need all over San Bernardino,” Mayor John Valdivia said of Golden California, which city officials expect to be fully occupied in several months.

Built in the 1960s, the apartment complex has for years been one of San Bernardino’s most troublesome residential properties.

The project belonged to a mostly absentee owner that let it fall into major disrepair, including defective sewer lines, bad plumbing, graffiti and multiple automobile thefts.

“I’d been working on that site for a couple of years, trying to get it fixed when they decided to shut it down,” said Matt Gillespie, a code enforcement officer with the city since 2017. “We were constantly dealing with tenant complaints, so it was important that we get it under control, especially because it’s next door to a school.”

Things got so bad that in March 2020 San Bernardino health officials declared the property unlivable and shut it down.

“They red-tagged it,” said Gillespie, who said the building once flooded with sewage when a pipeline broke. “In some places it was reported as an eviction, but that’s not what happened. Everyone who lived there had to move out, but they had to move out for health reasons. It was dangerous to live there.”

Not long after that, the public-private partnership that would ultimately restore the property was put together.

Cuthberto Ramos, founder and principal of Capitalist Masters Group in Fontana, learned of the distressed property from people in the San Bernardino City Attorney’s office and immediately sensed an opportunity. He knew the city had purchased the property and would have to sell it, but he also sensed it could be made livable again.

A former loan officer, Ramos started Capitalist Masters four years ago. With the help of investors, the company buys and renovates residential properties. It has made such projects statewide, but does “80 to 90 percent” of its business in Riverside and San Bernardino counties, according to Ramos.

In April of last year, Capitalist Masters paid San Bernardino $3.8 million for the Date Street/Golden California properties. Of that, $2.2 million was raised by 13 investors that Ramos and Manuel Marquez, also a co-owner and and principal with Capitalist Masters, put together.

That process is a common investment practice and has been around for years.

Capitalist Masters also used it to revive 31 units in two buildings at the Park Avenue Apartments, 2871 N. Park Ave., San Bernardino.

In July 2020, the company bought those assets, which are around the block from the Date Street/Golden California property, for $2.7 million. A team of 10 investors participated in that transaction.

Last January, Capitalist Masters sold those properties for $4.7 million to an undisclosed buyer.  The company still owns the Date Street/Golden California properties, now valued at $7.5 million, Ramos said.

“We’ve bought 75 apartment units in that neighborhood and spent about $2 million renovating them,” Ramos said. “That’s a big investment.”

That investment model is a great way to make money and save dilapidated residential properties, according to Ramos.

Assuming everything goes as planned, all three parties come out ahead when the deal is completed: Capitalist Masters makes money, either as a landlord or by selling the property, the investors make a profit when the property is refinanced, which usually takes about two years.

Finally, in the case of the Date Street/Golden California and Park Avenue transactions, San Bernardino doesn’t make money, but it converts rundown properties into places people will want to live.

It also gives small to medium-sized investors a chance to participate in a transaction that is normally reserved for bigger players.

“There’s always some risk in any investment deal, but there’s very little risk here because it’s real estate, which is a tangible asset,” Ramos said. “The worst thing that can happen is a catastrophe, something like COVID-19, but we got these deals done despite that.

“Some people in San Bernardino will now have a nice place to live, and the city deserves that.  And I can honestly say that not one of our investors has lost money using this model.”

One investor in the Date Street/Golden California project said he expects get about a 20 percent return on his investment, although he declined to say how much he invested.

“It’s a chance to make money, but it’s also a chance to do something to help the community,” said Mark Mendoza, a business lender and Fullerton resident who went to high school with Ramos. “It’s a win-win for everyone.”

Fixing the Date Street/Golden California property was “vitally important” to all of San Bernardino, Councilman Damon L. Alexander said.

“People are hurting, rents are skyrocketing, and that makes it even more important that we repair a property like that so people can live there,” said Alexander, whose seventh ward includes the Date Street/Golden California project. “There’s no reason any San Bernardino resident should not have a good place to live, and there’s no reason why other [residential] properties in the city can’t be upgraded the same way.”