Rooming House / Inn / Boarding House (not sure of correct name)

[Steve C.]

I have a property being offered to me at a great price and another investor that I'm friends with wants to go in on the property to set it up as a rooming house.  It is zoned as a commercial "Inn / Lodge" but has not been used in a long time.  Its in horrible shape and will take a huge investment to renovate it.  I have ten residential units that I have renovated myself so I'm familiar with the work but I have no clue how a rooming house would work.  Does anyone have experience in this?  It is a 6000 sq ft property with 40 rooms! and 5 baths.  I've heard there are a few different ways to do it - with one being where you are just the landlord and lease to an organization that runs the house - this is what I would want to do. (Not own a business actually running the house for the tenants.

Does anyone have experience with this and could you post a few basics of how it would work?  ie. Contacting organizations and getting a contract / lease signed for them to use the house, who pays utilities, would I need more than just my standard $1M in liability and my personal $2M umbrella policies that I use on my other rentals, how the amount of rent would be calculated, the going rates in the area you are in?...etc.  Or any other info you would like to post would be very much appreciated!   Thanks!