Frank Dodd and new construction financing and Trump

[Ralph R.]

As everybody knows there is a huge shortage of inventory in many areas of the country.  I have been able to stay ahead of this shortage by investing in different areas.  Most of these areas have had big rent increases, as well as severe housing shortages. While that is a good thing as far as being a landlord is concerned, as I am able to raise rents and have fewer vacancy's it is a double edge sword.  It makes it pretty tough to add to my portfolio. 

In talking to a Realtor today he told me that there was a severe shortage of housing in his city.  I already knew this from my research there.  According to pad mapper and rent-o-meter there are 2 available rentals there, while in another city (over 20,000 population), I am seeing only 1 available rental.  I usually take these numbers with a grain of salt, but I know them to be indicating the truth as I have multiple properties in these areas.

Neither city has any new construction going on.  when I asked the realtor about this he indicated that Frank Dodd has made it very difficult for banks to lend to developers for new construction and development of new residential properties.  my questions are:

1) Does Frank Dodd indeed contain lending restrictions for banks lending to new construction?

2) If Frank Dodd is in fact making financing difficult for developers to develop new properties, do you see any relief coming from the Trump administration in the near future?

RR         

[Bill Gulley]

Who is Frank Dodd, I googled that, can't find the guy anywhere! 

Now, if you mean the Dodd-Frank SAFE Act and Financial Reform, then your Realtor lives under a rock, development loans are commercial loans, they are excluded from recent Acts.

Now, if you want to talk about a contractor building and then financing the sale, yes, the Act applies and they are restricted, but they sure aren't restricted from building and selling conventionally or renting a house. 

Small town rentals are usually word of mouth, everyone already knows Mary Lou is moving out and just call Billy Bob if you need to rent. You're not going to see many small town owners advertising or reporting to rent-o-meter, they don't need to. 

BTW, I suggest you not build specs right now. might put that off a few years. 

Good luck :)