All Forum Posts by: Amy Konopka

You are not required to have a boarding house license in CA. You can rent out to individuals, per room and not be a boarding house. 

My parents have seller financed a free and clear property they operated as a fine dining restaurant in late 1990s, then transferred as a neighborhood bar.  They seller financed and now have to go into foreclosure against a 'long time acquaintance."  They're tired owners, but I've asked them to let me get involved since I don't want them ripped off. I live in Ca, this property includes a liquor license.  I am looking for someone who may be interested in discussing taking over the current arrangement.  Asking price is 750K and includes the liquor license.  Located 100 yards off the 378 and two miles from Lehigh University campus in Bethlehem, PA.  Tons of history in the historic building, was upgraded in 1990s. 

I agree an attorney would be a great idea, but what I've found with my own parents is they use their "old friend who's been an attorney for 47 years" who doesn't know jack about real estate.

First, I you've come to the right place, please try to find an attorney on this forum who has knowledge and experience on the subject. I've found with my own experience with my parents the older the attorney is,  the less "evolved", so just a heads up to arm yourself with background on this in order to ask the right questions. 

I'm trying to unscrew what my parents have gotten themselves into as well- they felt becuase "theyre on the deed of trust" in the county, all is well.  Now they have tyo foreclose. and there was a liquor license involved and the transfer done illegally.  According to the attorney--who advised them in the first place.    My parents have seller financed before--they're not newbies, but they lucked out the prior two times.  Save the heartache and VET the attorney. 

Quote from @Gloria Grotjan:

@Steve Garcia - Thank you for the info. I think marketing is the key before you even get started with a home at least thats what I'm seeing from various comments and also Youtube videos.

 Finding a House Manager should be the first thing. They are the boots on the ground, the most important piece of the entire operation. 

Quote from @Kayla Givens:

@Vatsal Patel I highly doubt it - the sober living model is not something just anyone can do. You're dealing with people that are in a fragile state and need a lot of help and support. As a landlord, yes it can be a good deal but as an operator, there is so much to consider if you're going to do it right. 

Thank you--everyone is looking at this as the "next big thing" and I'm torn between encouraging it and ripping apart anyone who wants to get involved "just for the ROI" ha ha ha. It isnt for just "anyone"- the House Leader is the MOST important person in the equation on so many different levels.

Quote from @Gloria Grotjan:

Quote from @Steve Garcia:

Quote from @Jared Galde:

@Steve Garcia first, LOVE that you're doing this! Curious what made you decided to operate the house yourself instead of Oxford House or another tenant organization who specializes in this?

Thanks Jared! My son is battling addiction which is where I discovered what a sober living home is. I wanted to open and operate my own to serve the need in my community to help bridge those gaps between families. I am in hopes he will join me in this venture.  

 Just curious if you've started the process of opening your first home and how thats going? Looking at opening a home this year in California but in the research stage and trying to learn from others.

Gloria, Google CCAPP and their credentialing information. They are super helpful, provide so many forms online necessary for the start up. I'm not a fan of the Oxford House Moedl-they need structure and accountability. Oxford House is reminiscent of a bunch of people who pinky swear to be sober and go to meetings...its hard enough getting people to stay sober--after exiting Residential recovery (another requirement we have) with a House Leader who is truly invested in helping people.   You need a live in House Leader at a minimum.  They get free rent/all utilities paid and I pay mine a $500 month stipend after an initial 6 month trial period. They need to be in it for the right reasons as well.  I also want them to understand ME and my vision: my homes are there for women who WANT recovery and will WORK for it-we're not just a cheap place to live in SoCAL with all utilities paid. I don't advertise on Craigslist and FB marketplace-I rely on word of mouth  so people know before they come to my house they WILL be tested multiple times a week and WILL have to go to AA meetings, do their chores and be a TEAM player with the rest of the house.  The Recovery Community is small--if you're a flop house you will be called out. Will you get "shut down"? Nope Its super hard to shut down a "Sober Living Home" due to ADA and fair Housing.  

Quote from @Zach Edelman:

These can be difficult to finance just an FYI. I know for DSCR especially, lots of lenders don't like sober homes unless there's truly no medical services offered.

Sober Living Homes --or "Recovery Residences" as the industry is now trying to move toward as far as "names" goes, CANNOT offer services. A Recovery Residence that claims to offer services should be classified as a Residential Treatment Center-which includes staff and usually medical personnel. Then they will be required to be licensed. Recovery Residences (specifically Level 2) offer housing only. DSCR lenders asked for the market rent of the property, they didnt care what I was doing with my house. I actually WISH DSCR Lenders would consider the income projections based on operating a Recovery Residence! I'd be able to scale 5 times as fast.

Quote from @Jared Galde:

We own 50 sober living homes, obsiously this was 7 years ago, but I've closed all of those homes in the past 4 years. Couldn't disagree more with what Wayne said here. The growing need for sober living homes is incredible. Profits aren't somehow ridiculously high, but our average cash on cash return is >23% across the portfolio. 

 Hi Jared, why did you close them? I'm opening my second home and find them extremely rewarding but think I may stop at these two because I am extremely involved in them and am spreading myself too thin I think.  It's not a "passive investment" that's for sure--at least for me! But I can see how burnout may be an issue. Just curious on your experience. 

Sorta real estate related (since it affects my ability to get lending!!) but this is a general question I feel every CPA probably has an answer to: 

TCJA eliminated the deduction line on Schedule A for legal costs associated with trying to recoup (not sure if that word is the best word) costs for unpaid Alimony/or legal expenses.  Prior to 2018 alimony was taxable to the person receiving it and deductible to person paying.  It is now the opposite. I am currently paying taxes on Alimony received. 

However, my understanding is line item still applies IF I am paying taxes on my alimony, despite it being removed from Schedule A.  This makes sense-the IRS wants me to receive that taxable income because then I have to pay Uncle Sam Taxes on it. Therefore in “government fashion” it provides incentive for me to seek those payments being willfully withheld THROUGH the tax breaks on Schedule A.  

Where do I plug the numbers now for legal fees spent trying to recoup this lost taxable income? 

Sorta real estate related (since it affects my ability to get lending!!) but this is a general question I feel every CPA probably has an answer to: 

TCJA eliminated the deduction line on Schedule A for legal costs associated with trying to recoup (not sure if that word is the best word) costs for unpaid Alimony/or legal expenses.  Prior to 2018 alimony was taxable to the person receiving it and deductible to person paying.  It is now the opposite. I am currently paying taxes on Alimony received. 

However, my understanding is line item still applies IF I am paying taxes on my alimony, despite it being removed from Schedule A.  This makes sense-the IRS wants me to receive that taxable income because then I have to pay Uncle Sam Taxes on it. Therefore in “government fashion” it provides incentive for me to seek those payments being willfully withheld THROUGH the tax breaks on Schedule A.  

Where do I plug the numbers now for legal fees spent trying to recoup this lost taxable income?