All Forum Posts by: Bryan Hartlen

You should be asking the city. Besides the fine, the current owners most likely have an obligation to return it to the original configuration.  You’re issue will be zoning first; is a triplex an option as currently zoned?  If it is then you’ll need to have their work inspected which could require minor or major changes. I’d call the permit office and ask if it’s possible to have someone come look at the property (most likely for a fee) - but you’ll at least know what you’re up against before you sign.

@Tony S. if I understand you correctly you're asking what would the general contractor fee be for managing the rehab of 18 units at a total cost of $270 - 330k... with a potential for more business down the road.  In the single family rehab world, we assume that we're paying a 10 - 15% premium to a General Contractor to manage the rehab. For this premium they are responsible for selecting and managing subs, managing material purchases and for all work being performed to spec (this is a financial risk for the GC also - if work needs to be redone it's on their dime). 

It sounds like you're still planning to select the subs and you just want oversight - like a foreman. If that's the case I would expect you would pay less than 10%. It would also depend on whether you believe this will be a fulltime job for the life of the project. If it is you might be able to pay an hourly rate. In either scenario the final fee, may depend on your local labor market.  Finding trustworthy, knowledgeable contractors is still tough in our markets. 

They could be cashing out for any number of reasons - I wouldn’t take it as a sign.  But plan to do your due diligence on any property whether stabilized or value-add.

Hard money is typically interest only for a 12 month period…. So you’ll need an exit strategy to pay that loan off within 12 months. 

A little off topic but we avoid Centerpoint from an investment perspective as the word on the street is that they are a PITA to deal with from a permit, inspection and fee perspective.  

@Rebecca K.we didn’t use Roofstock. Haven’t met many that have… so we’re not sure if it’s worth the cost (time and dollars). 

I would echo what @Andrew Syrios says and make sure you are every bit as thorough when screening and to the best of your ability scope out your housing authority’s process to see if you have a good one or a PITA. 

A couple other points to consider.  

- Sec8 payment is only ‘guaranteed’ if your housing authority is paying the full rent… if rent is split between the authority and the tenant and something changes with your tenant’s situation you can find yourself with a tenant that is no longer current.  There are processes for the tenant to request a change in rent through Sec8 but it’s a process they need to initiate and manage.  

- There is a regular property review by the Sec8 inspectors. In Birmingham where we have our properties this is an annual review and a cynical man might say that the inspectors try to justify their positions by finding something that needs repairing with every review and their criteria appears to be more personal than repeatable.  

- In times of rising rents, we’ve found rent increases are slower to implement (again because of the bureaucracy). When approved, the increase has been retroactive.  Setting rents for new tenants is pretty fast with the authority but getting an increase for a renewing tenant is slower. 

- Finally, it’s been our experience (which isn’t vast) that Sec8 tenants tend to be long term tenants. This may be because of the process required on their end to move or it may be that they are grateful to have a home. But it is nice to have most roll over from year to year.

@Chris Seveney. PM sent.  Thank-you.

 We own the note on a property and it appears we may have to foreclose.  Wondering what the time and $$ cost is to FC (so we can evaluate other options). And legal firms that specialize in FC in Illinois. 

Wondering what we should expect in terms of time (and cost) for an uncontested FC in Illinois.  Christian county (not Cooke).  Any recommendations on a good firm (or firms to avoid)?

Each housing authority handles rent increases differently.  We have Sec8 properties in Birmingham AL.  Each year (through our PM) we file a rent increase request (what we're asking for justified by comps).  We have not had any increases declined because of an arbitrary (or governmental) rent increase cap.  We have had increases come back at different amounts than requested because the authority valued market rents differently. In any case, it is our decision to accept the authorities offered rent or to not renew a sec 8 lease if we want to pursue a higher amount of rent in the open market.