Updated over 9 years ago on . Most recent reply
Motel to Studio Apartments Conversion
Would like to get this community's opinion on a concept I'm exploring.
The idea is to convert 70s/80s vintage motels (Gulf Coast of Florida) to economical housing for low income tenants. These properties are often under performing and difficult for the owner to refinance or sell, providing a cost basis including capex that is well below the going rate for garden style multi-family.
I would be collaborating with a team that has direct experience re-positioning these properties. They have been successful with gaining approval from municipalities and securing debt.
Proposed rent is $625 including utilities. The intention is for tenants to not receive housing subsidies and to have steady income and employment.
It seems very attractive due to the cost basis and would aim to refinance all, or nearly all of invested capital once the property is stabilized and financials seasoned. My concerns are the potentially high churn related to low income studio apartments and more management intensive style property.
Has anyone participated in a project like this? Is it something you would consider?