All Forum Posts by: John Cash

I have been looking into a rental management strategy put forth using new construction rentals on commercial property targeted as a Residence Inn vs standard apartment.

The group supporting this claims it works well for cheap to construct low value units for several reasons, mainly they can be built as a Hotel by right in most commercial zoning laws without having to go through alot of the land use approval that mutlifamly properties often have to.

Their other main support was being able to bypass the normal eviction process in many states thus reasonably allowing week to week rental with minor deposits, and the ability to get rid of problem tenants quickly.

My research into this is going both ways. Namely Increased costs due to many areas having local hotel taxes, and many areas having normal rental eviction laws apply after 30 days or a similar period.

However the construction zoning issue seems to hold up, IE I could walk into a real estate office tomorrow, buy a commercial lot, and have the building plans approved quickly and cheaply without many common issues that seem to be involved in getting approval to build normal rental complexes.

I am currently looking into building some rental properties on a piece of land as an ownerbuilder. I would have cash on hand to aquire the land and build a unit or two. Then to continue construction I would need some kind of equity loan or related product to draw the equity out of constructed cash flowing units to build more units.

I do not think a conventional construction loan would be feasible for a owner built project, so I assume I will need something different?

any ideas into the feasibility of this?

I am very early in the considerations, so I am not looking for offers, just ideas.

I am assuming that since it would likely be a commercial type product the loan would be based on cashflow CAP rates etc rather then my actual materials outlays?