All Forum Posts by: Alex V.

Would also be interested in this list.

Welcome to BP @David Senter! I live on the east coast but invest in KCMO. Happy to discuss what I've learned so far if you're interested. KC is a great market!

Welcome to BP @Padric Lynch! Being a vet has a huge advantage so it's extremely smart of you to leverage VA loans to build your portfolio. Congratulations on taking the first step and Jersey Strong!

Always fun (scary) to rush things when it comes to large purchases :)

Good luck and hope everything works out!

@Matt K. I've used Bulldog in the past and was very pleased with the results

For what it's worth, 1400 seems pretty close to current market for a fully renovated 3/2 in Lee's Summit. It depends on the finishes though. Do you have granite and stainless/brushed nickel style? Floors are hardwood, laminate, carpet? Tile in the kitchen or laminate?

I currently have a property very close to your prospective one, it was last renovated 10 years ago, and it's currently rented for below market at 1,200. We just took control of it and are in the process of trying to raise the rents to 1,500.

@Andrew Clifton yup, you are on the right track. The very dumbed down version of it is you apply for the tax credits with an HFA, build the project, sell the tax credits to a bank or a LIHTC syndication fund, and you retain .01% ownership. Exactly, on point in terms of the income stream. You get money for managing the building and your small slice of ownership, with essentially no money in the project. The bank gets Community Reinvestment Act credit, and they get to use the tax credits to offset gains in other areas. This is good for 15 years then there is an equity takeout.

This is a great primer on the flows of the deals:

https://www.occ.gov/topics/community-affairs/publications/insights/insights-low-income-housing-tax-credits.pdf

Geographic diversification, lower barriers to entry, less capital required, and despite the fact that it's been proven that you don't have to use it as a way to build capital for multis, it's still a great way to do so. 

https://www.msn.com/en-us/money/realestate/millenn...

More evidence to the contrary...

@Andrew Clifton generally yes and no :)

Yes, you would apply for tax credits, or bond funding with the state. They would help fund but not build it. The LIHTC is capped by statute and the bidding is very competitive so the 9% credits usually go to large development/rehab projects. You would have to check with your local HFA though, as this varies greatly from state to state.  They don't have to approve every tenant but you must provide a certain percentage of your units to people who make X% below the area median income. The compliance reporting for these programs is quite onerous so it's worth sitting down with a CPA in your area that does real estate tax credit deals to get a lay of the land locally. The structures of these deals is usually very complex, and beyond my area of expertise. I specialize in structuring the bonds that fund these so I'm a little removed from the development side of it.

These programs don't apply to single family. HFAs serve the SF market by offering subsidized mortgages to low income first time home buyers, not rental investors.