All Forum Posts by: Ryan York

Quote from @Luka Milicevic:

Quote from @Ryan York:

I am in the process of remodeling a home for co-living. I think I made the mistake of doing the work without getting permits. All the work in the home is completed. We are in the process of converting the garage to bedrooms when an inspector walked in without my permission.  he is now asking for permission to inspect the rest of my house. Am I required to grant this request? Or can I refuse and what are the pros and cons of each option?   thank you.

 Only someone from your county can truly answer this question since every single county, and possibly city has different laws.

What work did you do? If you did electrical, plumbing, hvac and they require you to pull permits retroactively you will need to probably tear into the drywall for them to inspect it. 

Do they have any proof that you did work inside the house? How did the inspector enter without your permission? Did he break in? Did he just walk in while work was done? They can do that....

If you're converting a garage to bedrooms, you should probably get a permit for that....

That's not a small job like paint and flooring. You are making massive changes. 

Thanks for the help!  I had some contractors on site.  I was told the contractor opened the door and stuck his head in. The contractors then let him into the garage. The work done was just bedrooms... 4 new ones, so just new wall and electrical.  Some of them have external conduits for electricity due to concrete walls, some behind sheet rock. He has no proof that I did work in the house. 
I am guessing he will make us tear out he garage bedrooms because their is a requirement for the flooring to be level and the garage floor slants slightly. 
My hesitation is my neighbor works for zoning and planning and he has been targeting me and trying to shut me down for the past year. False claims like accusing me of running a treatment facility, etc.  he has been aggressive and I am a little nervous about letting them in., 

The inspector said he was dropping by to inspect a new sewer line and pump we put it, which was fully permitted. But we already passed the final inspection so I am not sure what he was looking at. 

I am in the process of remodeling a home for co-living. I think I made the mistake of doing the work without getting permits. All the work in the home is completed. We are in the process of converting the garage to bedrooms when an inspector walked in without my permission.  he is now asking for permission to inspect the rest of my house. Am I required to grant this request? Or can I refuse and what are the pros and cons of each option?   thank you.

Thank you for your help.  I think i would need a home 50k cheaper to hit 7 %. I budgeted 10k for legal. Is that unrealistic?   I feel like i would need to do a 506b friends an family for the first deal or two to establish my track record before I could entertain a 506c and do multiple homes per deal. 

i am incredibly grateful for your help!

I  need help with numbers to decide if starting a syndicate would work for purchasing recovery homes or if I should just wait until I can purchase another one on my own

Property cost estimate 450k.

total cash to close 479k

80/20 split with 7% preferred returns...basically. 1% asset management fee, 2% due diligence and acquisition fee, disposition fee.. not sure

Rent annualized (38,400) minus taxes/ins (4,000) minus 7% (maintenance accrual for major repairs only) minus 1%(asset management fees for cash flow in the $31,496 range.

real estate prices in my are high, but I can charge a premium rent for sober living home which would increase returns.

Not sure if it would be worth it to syndicate or not.  any help would be appreciated. thank you!!!

@Tom Gimer  Thank Tom.   I would like to do commercial loans but the term are much more difficult at this point.  Shorter amortization and higher interest rates would really cut into my monthly cash flow...am i understanding that correctly?

thank you!

I have an interesting situation that I am looking for some advice on. 

I own sober living homes for men looking to recovery from substance abuse addictions.  We are ready to add more houses.

Problem: We may no longer be able to get traditional financing since we own so many homes already.  We could rent, but rental prices are so high it would cut into profits and it would be difficult to find an owner willing to lease to us since we would need to make alterations to the home to accommodate up to 12 men.

So I have been thinking about several solutions.  The one that I would like some advice on is this:

I would seek out an investor looking for a hassle free real estate investment.  The real estate investor would own the house but would have no landlord duties at all.  I would be responsible for all expenses including remodel, repairs, maintenance and would even pay the mortgage, taxes and insurance directly.  

Basically, the only responsibility of the owner would be to open his mortgage statement once a month and see that it is paid.  

In addition, I would pay the owner a 5% annual return on his original cash investments.  Up to 20% of the price of the home  So:

House price: 300,000

Investor down: 20% or 60,000

Annual return: 5% of $60,000 which would be $3000

the cash return is not amazing, but considering that the owner does not have to pay for repairs, maintenance, management, vacancies or upgrades....the profit would be comparable to any single home rental.  The cash return is NOT dependent on the income of the business. 

Owner Benefits

1. 5% annual return

2. Home appreciate (roughly 2-5%) on $300k is $6000 to $15,000

3. We pay down the mortgage (around $3,600-$5,000 annually)

with the various avenues of profit, the owner would realize a around a 20% return on his $60,000 annually.  The safety of the investment would be backed by the value of the house.

Some stipulations

We would likely require a 5 year commitment.  The owner can opt to sell or continue to own after 5 years.

The owner and my business would have to agree on the house.  It would have to be located in an location within 1 mile of treatment centers and would have to accommodate up to 12 men - shared bedrooms.

Of course, we would agreed to any remodels, and would agree to keeping the house clean, maintenance up to date, etc to protect the investment.  

I would love some input on this as I have never done a deal like this.  But I am trying to make a deal mutually beneficial.  

looks good on paper.  you put in zero for repair costs?  no capital expenditures?  so you are saying the home will rent as is then. i don't know your market, but with a price that low with the potential for that high of rent, i would invest in a really good home inspector.  know the age of the furnace, ac, and water heater. make sure the plumbing, roof, and foundation are good. if you do your homework and it checks out... i would say you have a solid deal. 

unless this place is hot and getting a lot of offers, i would ask the seller to pay some of the closing costs too.  

hope that helps

and you can diversify your risk by having more properties