All Forum Posts by: Jennifer B.

Karen M. You read my mind! This is exactly what I was hoping to do. Not sure if its possible in our state though.

George Trejo Thank you so much for the info! I read about the requirements you speak of on the DSHS site, guess I was hoping you could do what Karen had talked about but it doesn't sound like there is any way around being an owner/operator. You mentioned you were close to opening one... is this the reason you didn't? I'm wondering if you could partner with someone who already has the licensing and experience.

I've broken down the difference between different facilities:

AFH: Must be licensed with the requirements you mentioned. No more than 6 residents

Assisted living: same as above but 7+ residents

Retirement community: staff does not take on general responsibility for the safety and well-being of resident. Medical care can be provided by visiting nurses or home health aide. No licensing requirements.

Bill Gulley Thanks for the feedback. Actually, Adult Family Home is the term used on the DSHS website and even has this definition : These are residential homes licensed to care for up to six non-related residents. They provide room, board, laundry, necessary supervision, and necessary help with activities of daily living, personal care, and social services. RCW 70.128.010.

Rob Gillespie Thanks Rob. That's where I am at also. I always want to make sure the new business ventures will keep me in the investor seat and I have no interest in creating a new J-O-B for myself. I've figured a way to leverage so many other businesses so that I am just an investor, but am not finding a way that it works in this type of business. There has to be people out there that have done it and are doing it well... just probably not sharing with the rest of us. I've heard that in order to make it a business where you do not have to run it you need to have more than 8 rooms to turn a profit, be in a high rent area and have the right people working for you.

comments keep getting better... thanks everyone!

Most of my businesses are built on leverage with others that are experts or specialists in the specific area that we are investing in - or I am the specialist and they are the funding partner ect ect so long as we are valuable to each other.

I do like to understand as much of the business as possible so I can make informed investment decisions.

I see a huge benefit in talking with people that actually own an adult family home to get an insider's perspective.

Great feedback so far, thank you for the comments! The Seattle area has a higher cost of living, and the per room price that I have quoted came from several people paying those rents for their family members, so it all depends on the area and type of care that you are providing. Karen M. brought up a great point, I will need to research all of the different types and see which one fits best into my business plan. There are a few different places I am looking at, one in a large 162 room facility that would be a Medicad funded assisted living, and another is a standard AFH with 10 bedrooms in town.

My thoughts are to do some kind of a partnership with someone who already has their license and a system set up. I have the capital and ability to provide financing and oversee construction and maintenance . Its important to me to provide the best facility possible given the nature of the business.

Brian Hoyt I like where you're going with this. Can you give us some more info and explain where you come in and when you say "they don't try to beat us up for our fee" what service are you providing? Thanks for the comment!

Rob K J Scott: You are right, most lenders will require a 2nd appraisal for that issue, however the lender that I use does not require the 2nd appraisal after the 90 days no matter what the difference in sale prices vs. acquisition. Its been too long since I asked why and how they are able to do that. I'll see if I can get you an answer.

Who on the site owns and/or operates adult family homes? I've done a lot of research and found that as investments their cash flow can be great.

I'm looking to gain insight into the strategy or either building new construction to be adult family homes or rehabbing large homes and converting them while hiring out the management.

Some of my research shows that the private home rent is $4500-$8000 per month per room, which also depends on the facility and care that is provided. Staffing seems to be the biggest expense along with the insurance & licensing.

I'd appreciate any more information!

Here are a few tips on things that I have done to control this appraisal issue and mitigate the risk of low appraisals:

1. Try and find a lender that is familiar with FHA flips and has a pool of appraisers they normally use. The lenders I work with usually have 5 - 7 that are on their "list". Then have your agent have a letter on file that the seller requests buyers get pre-approved with your preferred lender. Some agents might get annoyed by that, but if you sell them on the idea of a quick closing and few issues they will usually play ball. The benefit would be using trusted appraisers who understand the lender's business and can come in with the necessary value.

2. If you are close to having seasoned the property for 90 days and an offer comes in, you can accept the offer and then rewrite it on the 91st day (make sure everyone is on board with this and understands why). Then the lender can order the appraisal and create the FHA case number and the 2nd appraisal should not be required. You may lose a few days, but well worth it.

3. Others have mentioned it, but meet the 2nd appraiser and tell them they are the 2nd appraiser and hand them the 1st appraisers report. Often times when its a query system that is being used to order the appraisals they don't even know they are doing a 2nd appraisal, they just see the order and do their job. Make it easy for them.

4. If one of the appraisals comes in low, ALWAYS ask for a reconsideration of value and TELL THEM how much you need. If its a few thousand it should be a piece of cake. I actually just got an extra $16,000 on an appraisal today. I emailed the appraiser, thanked him for his work and asked what he thought of the attached comps because I was $15,000 away from what I needed. In one day he revised the appraisal and sent it to the lender. May not always work, but might as well ask!

Hey Emilio, I just answered your question by email, but wanted to give the group an update and an answer to your question:

My typical build time is 65 days from day 1 of cutting the foundation to day 65 when the cleaning crew is coming in. These are calendar days not business days. (This is for my builder basic simple 2 story or split level homes)

Things that can add extra days include: weather, issues with excavation, supplies not arriving on time or subcontractor not showing up. All of these are pretty rare because we have such a good system, but things can happen so you have to factor some contingency.

Since I last posted, I was able to get a local bank to finance the construction at 1.5 points and 7% interest. Prior to that I was building using cash or hard money.

In the Pacific Northwest we don't use brick or stucco so its mostly wood products and regular composition roofing.

When I screen tenants I don't place so much weight on their actual credit score, but more or less their references, past landlords and their employment outlook.

Personally, I would rather rent to someone with less than perfect credit with stellar references and good income than someone with perfect credit and good income. Reason for this is the person with good credit is probably going to be moving on and buying soon (most of the time... but not always).

If I am able to give someone a "chance" they usually stay with me for longer and I seem to have less turn over with those tenants.

With the ones with bad credit, I ALWAYS ask them to explain themselves. If they start blaming everyone else I won't rent to those ones even if they gave me a triple deposit... those people are victims and will be a nightmare.

If they take responsibility and tell the truth for whatever blemishes are on their credit, I tell them I am going to give them a chance and explain that due to their credit there will be two deposits. One is a regular security deposit, and the other is a performance deposit in which they will receive back at the end of their term if they are never late and if the place is left in good condition ect ect. Make sure you check with your specific state laws before you do this, but its worked wonders for me!

For the second part of your question regarding self employment income... that one is a little more difficult. I would have to understand what their business was and how they were receiving income and make sure they are not over extending themselves depending on what the rent was.

Hey Bill Gulley, Since you want to criticize my advice that was actually not given to you... I feel compelled to let you know that you are incorrectly spelling TENANT... It's not TENNANT - but hey... what do I know?