All Forum Posts by: Kevin Mirise

There are times when option-to-buy and seller financing make sense. I would not consider it in this case. It is likely you will be roasted in the media if you have to pressure or litigate against a non-profit. That's a lose-lose proposition, whether you prevail or not (you will lose a lot of sleep and money, for starters!). Even if you regain possession, you'll have a nightmare on your hands to again reconfigure/renovate after they've trashed it. 

1031 can be a great way to go. Some 1031 facilitators can connect you with group deals where you can be an investor alongside others, and let a pro manage it all. So if you try to find your own purchase and can't, the piece-of-a-bigger-deal investment(s) can be your backup plan. 

If I was in your shoes, I'd try for #4. So many people are looking for affordable alternative housing, who can't afford first/last/sec or can afford it but get turned down anyway because self-employed, unemployed, etc. Lodging house/rooming house/short-term rental properties are generally higher maintenance (time involvement), but MUCH higher CF returns. 

We have owned and managed one for about 5 years. Not 55+ exclusively, but a 14-unit lodging house (aka: rooming house/SRO/single-room-occupancy/co-housing). We pitch it as “designed to be cheaper than a studio, for those who don’t mind sharing kitchens and bathrooms.” So yes, sharing a bathroom is a big dealbreaker for many, but others are okay with it, since it makes their rent cheaper.

If I was going to design a co-housing property from scratch, a good compromise might be for each room to have a private toilet, sink, small fridge/freezer, and TV. Common area kitchen(s) save a huge amount of buildout and maintenance costs, as do common area shower rooms (maybe a tub option too?).

There are also pros and cons to having any shared ‘living room’ type spaces (game room/TV room). Some SROs do not have shared media rooms, and because of that, they enjoy fewer social frictions. Today's close friendship or romance or clique can be tomorrow's domestic screaming match, bothering all the other tenants, and causing “good” tenants to move out.

You can find quite a bit of news articles available on the resurgence of co-housing and micro-apartment type living. There are a wide variety of reasons that people choose SRO type co-housing. Maybe someone has just moved to the area for a job, and wants to live there for a few months to get to know the area before getting a studio or apartment. Some live for 10+ years in an SRO even though they could easily afford a 1-bedroom apartment, because it frees up a lot of monthly cash for other life choices (expensive sports, etc). Others are recently divorced, recent financial hardship, downsizing to a place with minimal to clean or maintain or pay for, etc.

I could easily see a 55+ SRO being in high demand. It would help tremendously if it was in a walkable location (no car needed to get to the drugstore, bank, Post Office and coffee shop, etc).

Give tenants all the things that are important to them, and take away all of the things they dislike, such as paying for WiFi, partying neighbors, or scrubbing a stovetop (cleaning crew does that).

Basically, it’s the most affordable rung in the wide range of housing options, and there will always be a niche demand for it. Happy to try to answer specific questions if you have them.