All Forum Posts by: Adam Tafel

@Patrick Smith - I was just speaking with a client last week, she had a similar agreement in one of her units and was taking the necessary steps to transition back into a normal residential property. Here's my take:

-I would first get an idea of projected rent. If the companies you are dealing with have experienced track records of success, they should be able to provide plenty of data. You obviously will want more than market rent, considering the amount of hoops you are about to jump through. As for references to speak with other property owners they work with

-call the city zoning department. You'll need to make sure that zoning allows this, different cities have different codes. In St. Paul many types of special housing can't be within a certain distance of each other, because the city doesn't want specific neighborhoods to become institutionalized.

-call the city inspection department. You'll likely have an inspection and work orders, followed by more inspections.

-research your exit strategy, and speak with your lender. My client was having trouble transitioning back to normal residential from her congregate living status, she was essentially running a small group home. She had refinanced during this time, and her lender wasn't allowing her to rent to traditional tenants. She was also required to obtain a new certificate of occupancy (rental license), and she couldn't afford to make the necessary updates to comply with code

Hope this helps! I think that finding a lucrative niche is always worth trying out, and can often lead to faster road to wealth building. Most owners won't be willing to jump through these hoops, so you might position your property to outperform your competitors. Where are you located? 

@Robert J.- that's awesome! I was expecting the same deal, but mine is a bit more complicated.

@Martin Lindsay - NewRez and PennyMac. 

Update: 

I called one lender, and the automated system was very vague. They told me that forbearance would continue to accumulate interest, and at the end of the period I would have the choice to restructure (with possible additional fees and interest rate change). I couldn't get an actual person, "press 2 to accept". No thanks!

I then talked to the lender who I plan on using for my next loan - apparently people who used forbearance during the last crash weren't able to buy for years. I'd rather not risk it, so I've decided to pay my mortgages as scheduled. Still interested in what kind of deals other posters are seeing - if it were an interest/fee free delay, tacking on payments to the end of the loan, I see no reason why to turn it down.  

I spent many years in the restaurant industry in St. Paul, we always used Plunkett's Pest Control. I can't speak to their costs since I was never footing the bill, but they were always very friendly and informative. Good luck! 

Those terms sound pretty ideal- I have a friend who works at the Minneapolis University Ave office, I can reach out to him to get his opinion on the terms. What part of MN are you in? 

@Jeff Freund - I would be surprised if a homeowners' association would grant you leniency on their occupancy rules , but it doesn't hurt to ask. In Minneapolis/St. Paul it depends on the population density of the area - typically no more than 3-5 unrelated adults is the range. Call your city zoning office tomorrow - they'll be able to tell you for certain. 

@Gus Muller I don't have anyone who isn't currently swamped with projects, but I know a few decent handymen if you need minor repairs. What kind of project are you working on? Feel free to shoot me a text or email.

All of our projects are proceeding as normal, although we only have 1-2 guys working at once. Construction workers are considered essential personnel, as are real estate professionals. I don't think it's a good time to be postponing anything, although we want to be smart/safe about it.

Welcome to MN Jacori! There are plenty Twin Cities investors on BP who will be happy to connect. Hopefully you guys get to resume your season before too long! 

@Account Closed said - can you afford the payment on your own? What do you currently pay in rent, would it make a big difference if you were temporarily responsible for the full payment? 

There's definitely a possibility that home prices will go down, there always is. If I bought a 4-plex today at 400k, rented it out, and it appraises for 350k next year, am I going to be concerned? Probably not, I just want it to provide income. Timing the market is an impossible task. The government has put a series of protections in place to protect property owners, in an attempt to avoid a housing downturn, which makes me optimistic for the future.  

That being said, we are living in a strange time. I think it's highly unlikely that home prices will increase dramatically in the next 6 months, and there will always be future opportunities. Don't make a decision that's going to keep you up at night - ask advice from the experts and make an informed decision. 

@Account Closed - do you have a specific property in mind, or are you just beginning the process? 

The search for an investment property typically takes 3-6 months, so there's no reason not to get start the process. I'd recommend meeting with a lender if you haven't already, @Tim Swierczek ^ is a great resource. You'll get a full understanding of your purchasing power and financial position.

It also doesn't cost anything or require any commitment to start looking at properties. There's a chance you won't find a deal that works until later in the year, when life is (hopefully) back to normal. 

Only you can decide when you're ready, but thats my 2 cents. Welcome to BP!