Appraise as SFR or MF?

[Johnny Knucks]

I have a property located in Baltimore that is a SFR, but the owner rents each bedroom separately, with a common LDK on the first level and a common bath on the 2nd. There are long term renters with verifiable contracts. It's worth way more as an investment, but remove the bedroom locks and it's just a SFR. It's a private sale but will eventually require a bank loan, and I don't want to leave the buyers in the lurch.

 

[Zoe]

Is it a brothel? Does Epstein's partner own it?

 

[swandel1]

It's a rooming house. Lenders would not lend on these 20 years ago. Haven't run into one since. Regardless, you appraise to HBU.

 

[Zoe]

It's a rooming house. Lenders would not lend on these 20 years ago. Haven't run into one since. Regardless, you appraise to HBU.

Does it have any kind of help from like HUD on subsidized housing?

 

[Zoe]

Sharing the kitchen and baths kinda bothers me. Does the owner stay in one bedroom?

Who has first rights on the kitchen and baths and TV or whatever?

Is food delivered to the occupants?

Surely you have a rent roll and income/expense statement.

Are the utilities split between occupants? It is confusing to me personally. Who handles the maintenance?

Me personally, I would want 2-3 years of rent roll and income/expense statements or it would be no go. I would also require inspection of each bedroom.

 

[George Hatch]

The occupancy doesn't change the physical or legal attributes of the property.

 

[Surf Cat]

Sounds as if it's next to a college. The dwelling is probably taking a beating. Agree with Hatch's assessment though.

 

[Overimprovement]

Do zoning or local ordinances even permit this? Any others in the neighborhood being used this way, and more importantly, sold this way (to see if any premium is being paid).

 

[Johnny Knucks]

It's a rooming house. Lenders would not lend on these 20 years ago. Haven't run into one since. Regardless, you appraise to HBU.

Wondering what HBU is in this case. The owner makes pretty good money doing this. She has inspections from the city and everything. I don't think it can go as a MF, but possibly a rent schedule attached, but that depends on lender requirements. I've got someone who's working on that angle.

 

[Johnny Knucks]

Sounds as if it's next to a college. The dwelling is probably taking a beating. Agree with Hatch's assessment though.

No, it's mainly people who work or are retired and on fixed incomes. No Sec 8s, but I don't think there are any college age either.