Rooming Houses - Posted by Jacob


#1

Posted by Andrew Smith (Phila) on January 24, 1999 at 22:23:48:

Breaking an apartment into rooms for rent can greatly increase your cash flow. However, it may be illegal depending on the zoning laws in your area. In many areas rooming houses are not allowed. Check with your local zoning department first.


#2

Rooming Houses - Posted by Jacob

Posted by Jacob on January 24, 1999 at 21:53:45:

Wanted to know if anyone has any experience converting a sfh into a rooming house. I have located a property that someone is practically giving away, but it seems the only way I can break even on it is to convert it into sleeping rooms, or possibly sell on a lease-option. Can anyone advise?

Thanks in advance for your responses.


#3

Re: Rooming Houses, a bit more info - Posted by Jacob

Posted by Jacob on January 25, 1999 at 13:01:55:

Thanks to all three of you for your responses. I’ll shed a bit more light on this particular situation. This is a property in a part of town (Indianapolis) that is on a tremendous upswing. The house has been renovated from the ground up, and is beautiful. The seller has an MAI appraisal for $160k and is asking $109k. He needs cash. I know on the surface, this screams deal, with $51k in potential equity, the catch is that this house is by far the nicest on the block. I don’t see any way that this can rent for $1400-1600, or sell for anywhere near $160k. Not in this neighborhood, not now. I have a lender who is interested in possibly lending me $120k on the house, but I don’t want a money pit. Any more suggestions? Thanks again in advance.


#4

Re: Rooming Houses - Posted by Tim Pannabecker

Posted by Tim Pannabecker on January 25, 1999 at 07:38:26:

Jacob,

Andrew & GINO have good advice, a rooming house does best in a high density, low vacancy, less discriminating area (Big city). Not to say that it can’t work in other scenerios. But, managing a rooming house is time consumming and as Gino says a headache. Why not explore a lease option. Remember there is a large pool of individuals with less than desirable credit that are used to paying a hefty premium when applying for credit, this would also apply to a lease/Op.

Best of luck,

Tim


#5

Re: Rooming Houses - Posted by GINO

Posted by GINO on January 24, 1999 at 22:52:28:

Russ Whitney would say “go for it” i on the other hand have done a few in the 80’s and they were nothing but headache and very high maintenance.

I would tie it up and flip it to someone who can do the fixup if necessary.

Or just assign it to someone for a nice little chunk.