Denver, CO · Member since 2017 · 102 posts · 48 votes
Hey party people! We are finishing the renovation of a duplex in downtown Birmingham, Alabama. The goal was to STR it but obviously that won't be happening now! We are going to put long-term tenants in there for at least a year. Anyway, besides the great revenue it was projected to make on airbnb, the other reason we took on this project was because it was zoned commercial so even if Birmingham decides to regulate airbnb (currently it does not), the zoning code allows for a short term rental already anyway.
So now on to the fun.... trying to do a cash-out refi in a coronovirus recession on a super rare type of property (at least in Bham). So far we are getting a lot of "I won't touch that with a 10 foot pole" answers... mainly because commercial lenders want bigger projects not a little 'ol duplex. Especially in this market.
Does anyone know of a lender that specializes in this type of thing? The lending could be similar to work/live lofts, etc. Just an idea.
Hey party people! We are finishing the renovation of a duplex in downtown Birmingham, Alabama. The goal was to STR it but obviously that won't be happening now! We are going to put long-term tenants in there for at least a year. Anyway, besides the great revenue it was projected to make on airbnb, the other reason we took on this project was because it was zoned commercial so even if Birmingham decides to regulate airbnb (currently it does not), the zoning code allows for a short term rental already anyway.
So now on to the fun.... trying to do a cash-out refi in a coronovirus recession on a super rare type of property (at least in Bham). So far we are getting a lot of "I won't touch that with a 10 foot pole" answers... mainly because commercial lenders want bigger projects not a little 'ol duplex. Especially in this market.
Does anyone know of a lender that specializes in this type of thing? The lending could be similar to work/live lofts, etc. Just an idea.
TIA!
As I'm understanding what you wrote it sounds like you have a legal nonconforming property. While renovating & using it is legal per the zoning when it was built it is a nonconforming use meaning it won't get thru underwriting since it's not the highest & best use of the site.
I ran into a lot of this when I was appraising. It's grandfathered in because it hasn't been redeveloped but this is where municipalities attempt to force redevelopment. If an appraiser thinks there is demand for commercial it moves past interim use zoning to recommending it be developed to conform to the area.
Denver, CO · Member since 2017 · 102 posts · 48 votes
6y
@Jason Cory I doubt that's the case with this one. it's surrounded by other homes the same age (and all commercial) and there are duplexes on the block behind it. It's not like developers are knocking down doors to buy up property to build stuff in that area. I do have a couple of refi options but just looking for more because it's definitely limited, that's for sure!
Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
6y
@Julie Hill what @Jason Cory said above is 100% correct, the zoning has most likely changed around the home and cities do this to create development patterns that they want to see.
I had a similar SFR in Central FL and after I got my loan commitment for a conventioanal loan, the lender ended up needing to make it a portfolio loan and keep it in house because of the non-conforming zoning. So you need to look for a local lender that will hold the loan in house. Another option is any of the alt-doc type guys should be able to lend without issue...the issue is with lenders that need to resell on the secondary market and not being able to meet guidelines.