Just a question for you more experienced rehabbers out there: what are some of the lega/political loopholes or problems of turning a rehab project into a recovery house for addicts? I found a 2500 sq foot house, 9 rooms, 3 baths in a decent neighborhood for $30k. It’s all stone and really pretty. It needs total gutting, etc. Instead of fixing and flipping, my partners and I are debating turning it into a halfway house for AA or NA. If we put bunk beds in the rooms and charge 70 bucks a week the potential cash flow could be ($70x8 people x 4 weeks= $2240/month). The note would only be about $650. I am just wondering if anyone else has tried this. If it’s not a likely option, we’ll just flip it. Thanks is advance.
I don’t know where you’re located, but here in Austin, Texas there was a half-way house in the news lately. It was trying to get a permit to open a new house. Apparently, they’re licensed and regulated by the state. Also, the city would have to give them a variance in the zoning to open in a residential area-- they seem to be treated more like apartments than SFH’s.
So check for zoning requirements with your city and licensing requirements with your State. You just know the neighbors will complain, so you might as well get it worked out in advance.
I investigated renting to “OXFORD HOUSE” which is a national recovery house (Google "OXFORD HOUSE) they sent all info, there is no state/local or federal oversight for these types of homes if they are residential. I had a four bedroom that NO ONE had any authority over who I rent to. OXFORD is very very helpful.
Thanks for the responses guys. The legal issues were worked out rather easily, just by making a phone call to the city housing department. But we decided to pass because our contractor said it would be $75,000 to fix and had major structural problems in the basement. Too bad.