Adult Family Home

[TC]

I've had that situation on more than 1 occasion. I immediately informed the bank and they cancelled the deal and paid me for my time. Even had one where the house turned out to be a Bed and Breakfast. A simple case of someone trying to get a residential rate on a commercial property.

TC

 

[38Scarcello]

WOAH! Thanks for all the very knowledgeable responses. It is going to take me some time to absorb all these. I am going to re-touch base with the loan officer and let him know what I discovered. I bet anyone a lot of cash he knew about this. This is my first time working with him, so he could be one of those types.

 

[Smokey Bear]

In California, if 6 or fewer beds, it's allowed in residential areas, and doesn't change the nature of residential use. Doesn't matter if it's group home or hospice, and I have seen loans go through on them, as I've done several of them.

Alterations that remove the regular residential functionality might make a difference, depending on cost to cure.

 

[Charles Witt]

Does anyone think a Certified General Real Property Appraiser License might be needed for this job?

 

[hastalavista]

In California, if 6 or fewer beds, it's allowed in residential areas, and doesn't change the nature of residential use. Doesn't matter if it's group home or hospice, and I have seen loans go through on them, as I've done several of them.

Alterations that remove the regular residential functionality might make a difference, depending on cost to cure.

They probably went through because the UW didn't read how you described the property.

Here's my concern if I'm lending the money-
I'm not too worried about the modifications, because I know that if I hire Cynthia to do the appraisal, she is going to give me my accurate "as is" value, and take into account the modifications in her valuation. So, my normally valued $500k house is worth $425k "as is"; I can handle that.
What I can't handle is this: When my borrower stops paying on the mortgage because the adult home-care business is not as easy to run or lucrative as he thought, and I need to take over the property, what do I do with the elderly-care residents? Roll them out onto the street?

 

[Marcia Langley]

Denis,

I think the authorities move very quickly to move the residents as soon as the licensed provider is no longer there.

I've seen them relocate several dozen people over night so a half dozen would seem to be a snap.

But, this seems to be a 'for profit' business and I agree that the business activity should be indicated in the report.

 

[Lobo Fan]

I ran into a series of these in 2005, none lately. I just reported that it was being used as an assisted living facility and never heard another word. The only weird one had the garage converted into 4 bedrooms, two of which had no secondary egress. It made for a tough comp, 7 bedrooms, 4 baths in 3000 SF in a neighborhood of 3/2 and 2/1 around 1500-2000 SF. I did a C2C to take the garage back to a garage and that made my home a 3 BR 4 bath which was adjustable.

I didn't think the bathroom support bars were a big deal either way.

 

[McPheeters]

Patrick,

I will weigh in with Mr. Dayton on this. Ran accross one last summer that had 6 bedrooms, each with it's own bath, a utility room with 4 washers and 2 basins. It is in a SFR neighborhood, had clearly been designed/built for adult foster care use and was being used as such the day I was there. The bank cancelled the order.

 

[hastalavista]

Denis,

I think the authorities move very quickly to move the residents as soon as the licensed provider is no longer there.

I think (and hope) you are correct.:new_smile-l:

However, the last thing I want to read in the paper is that local officials were forced to evacuate 8 bed-stricken elderly residents because The Bank of Denis foreclosed on the property!

 

[38Scarcello]

By the way, this assignment went 'bye bye' this morning. It's going to be a wonderful weekend. I have tee time in 2 hours.