All Forum Posts by: Payton Chung

County (or in NYC, city) tax assessor offices usually maintain online maps with property records. For instance:
https://www1.nyc.gov/assets/finance/jump/property-data-maps/indexpage.html

Do note that many (perhaps most!) vacant houses or lots in cities have unclear title--that is, nobody's quite sure who owns what. That could be an heirs or probate situation, it could be a bunch of unpaid liens (back taxes, water bills), etc. Any bank will need evidence of clear title before they'll lend on a property, and it often takes a lot of time and effort to figure it out beforehand.

As Ron points out, a lot of houses with "English basement units" are listed as single-family since they don't have a separate Certificate of Occupancy for the second unit. They'll usually note this in the listing text, though. Getting a CofO for a second unit is getting easier, as updated accessory dwelling laws expand across the area: DC, Arlington, and just now Montgomery have fairly OK laws, supposedly Fairfax and Prince George's are considering changes. So you could buy a house (pending zoning research!) and split off one bedroom into a proper ADU, then rent rooms within the larger "main house."

Since you're young, you could also consider hacking a house into a group house / co-living arrangement.

Basement is almost always the more expensive option. Concrete is also almost always more expensive than wood.

Depends on how the height limit is defined. Some places allow "penthouses" above the height limit, which can include access to a roof deck (as Josh points out). Clever split levels, or doing a mezzanine, might get you the floor count but won't yield any additional square footage... and people pay for square feet, not floors. Are you absolutely sure you can't play with the grade a little bit?

Anyone have luck getting one of the big SFR institutional investors (e.g., Invitation, Front Yard) to sell a house that they own?

I have my eye on an over-zoned house where the land is worth much more than this investor paid. However, I can't find any contact info for dispositions -- only acquisitions and asset management.

As Mike points out, there's a building code difference for SFH/duplex (IRC) vs. multifamily (IBC). That makes a three-flat significantly more costly to build, since that kicks in stuff like sprinklers. (The city of Chicago doesn't use IBC, so it doesn't have that particular problem, but its building code has many of its own problems!)

However, IRC also works for townhouses. A triplex or four-plex of rowhouses can still be built under IRC, and with a conforming Fannie/Freddie mortgage to boot. Of course, getting the income to qualify is a bit tougher; someone just starting out might want to take a house-hack approach, starting with a duplex and adding an ADU later (local laws permitting).

An OZ fund (QOF) would make an equity investment into the project LLC (which holds QOZBP or is a QOZB), and would hold that stake for 10+ years. Most QOFs are looking for pretty standard PE returns, although with an emphasis on (tax-free) long-term capital gains instead of (taxable) operating distributions.

As mentioned, you need to get a securities lawyer involved to properly set up the LLC with equity classes, write OZ language into the incorporation documents, and draft a business plan and timeline for the QOF's records. Most of the additional tax compliance down the road is handled by the QOF.

I've seen some entitled projects listed for sale directly to QOFs. However, most QOFs are run by private equity shops, not by developers, and are looking for someone else (e.g., you) to do that work. Also, since most are private equity shops, they're most comfortable with institutional-scale assets—but a local fund might be interested in smaller assets.

There are a few marketplaces that have been set up to match QOZBs and QOFs. I know that the state of Maryland has set up one for in-state projects, and a couple of national platforms have popped up.

Living on-site in an ADU and renting out the upstairs is completely legal and will not jeopardize either your Class 1 Residential assessment, your homestead exemption, or any senior property tax relief you may be qualified for.

There are some local architects who have ADU experience; you might find some recommendations at the DC-based CSG's ADU forum.

It's such a new program that there aren't many people with funded projects yet (much less realized returns), and companies aren't entirely sure about their strategy -- and so aren't hiring OZ specific people. Some of the larger community development groups, private equity funds, etc. have launched specific OZ platforms, and some local economic development officials are funding programs to reach out to equity investors.

My impression of Milwaukee is that it's a tight-knit market. You might try going around to some of the family firms (focusing on ones more likely to do redevelopment) and asking for informational interviews, with a presentation about local OZs. There are people who are doing this work nationally, but I have doubts about whether they can understand the peculiar dynamics of a disinvested community from afar.

@Jamie Berger: OZs were pretty much invented for people with stock options (Napster founder Sean Parker is often credited with the initial idea). Especially if you're an accredited investor ($1M+ net worth), there are plenty of private equity funds that would love to invest your money for you. Or, talk to a local lawyer/accountant about setting up your own OZ fund to invest in Qualified Opportunity Zone Businesses. There are some marketplaces out there (some run by states like Maryland, others national) to match investors and projects.

Neither one is definitively more efficient than the other in all scenarios.

The builders I've talked with in the Atlanta area (and the Memphis area) don't think that there's much of a benefit to modular there, since construction labor costs are somewhat reasonable -- even if quality is sometimes lacking. In Northeast/West Coast markets, where on-site construction labor is much more scarce, there's an appreciable price difference as well as time savings. 

Even the best case scenario I've heard of (100+ standard units in the Bay Area) the savings were a few percentage points, as only 1/3 of the TDC goes to the factory in the first place. Modular doesn't offer any savings on land, soft costs, etc.