Merry Christmas 2006
Posted by David Krulac on December 25, 2006 at 19:11:42:
I've heard Nick several times and he is personable, entertaining, and an experienced investor.
I have been doing special needs for over 12 years. It can be a very good niche.
1. Saying that your income is doubled is overstated in my opinion.
2. You are subject to more government inspections, often times both state and federal.
3. Funding while guaranteed by the government, is also subject to budgetary cuts, funding shortfalls etc.
4. There is a layer of bureaucracy added to the process.
5. There is neighbor resistance to special needs, particularly when you are talking about violent behavior, sexual behavior, drug & alcohol treatment, or prison halfway houses. Besides there are zoning considerations to inhibit special needs housing. Some areas around here have outlawed residence where there are more than 3 unrelated people living.
6. They also use these zoning regulations to limit student housing, which is another subject Nick teaches. Some towns with colleges don't allow students to living in certain parts of town. they want to keep the drunken college students on their side of town. so far there have been no court challenges to either of theses zoning regulations restricting students or special needs.
7. Special needs may require certain physical changes to the building. I built a custom special needs residence that has no steps, either inside or outside, wider door opening, extremely low pile carpet, no cabinets below kitchen and bath sinks, wider halls, more exits, and a large shower with no lip.no curb between the floor and the shower. All of these specifications costs money. In a retro fit they will costs even more money.
8. Then after you do all the renovations, or new specialized construction, the government funding could dry up and you could be left with a specialized building that appeals to only a very small audience. And the majority of buyers won't pay extra for amenities that they don't want or need.
9. Some existing properties just are not worth changing, as the renovations would be too expensive. Therefore you need to work with and no the requirements of your clients/customers and provide to them exactly what they need.
10. Its a small niche, but the right circumstances and the right property, can be a worthwhile investment.