All Forum Posts by: Payton Chung

As Tiffany points out, you may need to hack your own house into a multifamily property. There are few such properties in existence, never mind available: only 4% of Wake County residents live in 2-4 unit buildings, according to Census ACS, vs. 60% in detached houses.

The good news is that some local jurisdictions make this relatively easy. Durham allows detached or attached accessory dwelling units citywide. Cary allows "utility dwelling units" (a second unit within the same structure) town-wide. Both currently limit the second unit to 30% of the primary unit's size, i.e., 23% of the total size of the building.

Raleigh hasn't gotten on the bandwagon yet, though.

As Basit mentioned, the substantial improvement test means that these funds are looking to build, not buy. As a developer with QOF backing, I'm looking for sites with strong fundamentals and entitlements in place, or better yet plans and permits in place. My investors don't have time for anything complicated.

And as Greg mentioned, QOFs invest in project equity -- and hold it for the long term. The projects I've heard about that have gone forward were shovel-ready, but had a financing gap between the construction loan and the owner's equity that additional (and patient) equity could fill.

I've heard multiple fund managers say that they calculate about 200-250 basis points of excess returns for an O-Zone project. The deal has to make money first.

In most jurisdictions, anything that meets IRC specifications (not just HUD specs) is allowed. After all, plenty of things within a house are sold as kits... why not entire rooms?

Two links that might be useful: one about IRC vs. HUD and foundations, with an example:

https://www.rjohnthebad.com/plain-talk/2017/11/22/...

Tiny House Atlanta has a pretty useful summary of zoning codes around Atlanta with regard to placing modular vs. mobile around the metro area:

http://tinyhouseatlanta.com/resources/zoning-build...

Remember that there are two building codes, IRC (residential) and IBC (commercial). It's usually easier and cheaper to find contractors for IRC. A detached house or duplex is always IRC, as are side-by-side townhouses. Either townhouses or small detached houses ("cottage court") seem to be the sweet spot for keeping costs reasonable -- assuming land costs aren't too high.