All Forum Posts by: Alex V.

Hey @Andrew Clifton I work on the financing side of low income housing. It's probably worth paying attention to which way the wind blows with the House Tax Reform Bill. The current bill proposes removing tax exemption from Private Activity Bonds, which are how a good chunk of LIHTC and all bond financed low income housing is funded. The bill also proposes scrapping a lot of other tax credit programs for affordable housing on smaller deals. The Historical Rehab and a few others are on the chopping block, all by end of year. The likelihood is low but there is a small chance that low income housing bonds cease to exist in January.

With that being said, you should contact your local Housing Finance Agency to see what they have to offer. They act as the go between from HUD to developer. I'd wait a few days before reaching out though as a lot of them are in pure panic mode right now.

http://adfa.arkansas.gov/rental-housing-developmen...

Please feel free to reach out with more questions. Affordable housing is very near and dear to my heart so happy to answer any questions.

@Cornel Smith Amen!

@Andrew Syrios Thank you!

@Eric Winters Good luck with your first property. Keep pushing man!

@Ibrahim Elzaim I'd be curious to see one of these studies.

Hi BP Community,

I wanted to share a success story of implementing a tip I learned from BiggerPockets.

PRO TIP: Tell all your friends, family, and even strangers what you are working on.

I've read or heard a form of this advice in Anson Young's book on Finding and Funding Deals, in Brandon Turner's Book on Rental Property Investing, a quick tip on the Podcast, and from numerous podcast guests and I'm here to tell all my fellow noobs that IT WORKS!!

I just started investing in Kansas City this year and have been telling all my friends ad nauseam about the benefits of buy and hold rental investing. Well a few weeks ago one of my good friends emails me and says, "hey one of my clients needs to raise cash. He owns a bunch of property in KC. Are you interested?" To which I reply, "hell yeah I am but I don't have the cash so let's figure out how to make it work." We ended up partnering 50/50 on the deal, and his father who has been looking to invest in real estate, acted as our private money lender so we could close quickly, in cash.

Fast forward a few weeks later and I've just closed on an off market deal where we paid $15k below appraisal for a tenanted cash flowing SFR, started a partnership with a great friend who has a very complimentary skill set and work style to mine, and gained access to a private money lender with deep pockets. All of this because I simply spoke up about what I've been doing. For all the new investors out there, speak up about all the hard work you're doing, it pays!

So I just listened to Episode 250 of the BP podcast and it did not disappoint. Grant Cardone is as entertaining as he is intelligent. He makes some great arguments against the single family home and equally great points about buying middle income MF housing. Being on the older cusp of the Millennial Generation, his points about not wanting a long commute, a walkable downtown, and central location resonated. It's why my wife and I rented in Manhattan as opposed to moving to the burbs well into our early 30s.

I couldn't help but think that his general investment thesis that "the suburban single family home is dead" is a bit short sighted. Yes, Millennials have shown a much stronger preference to city life than Gen X and Boomers. One has to ask though, is this just due to a combination of factors, including the preference to wait much longer than prior generations to start families? Here are two articles that cite data and provide counterpoints to Grant Cardone's current investment thesis.

https://www.bloomberg.com/view/articles/2017-08-25...

https://www.theguardian.com/commentisfree/2017/aug...

1. Delaying Families - I just got married last year at 31, which is completely within the norm for the NYC area. A large chunk of my generation is delaying starting a family in order for both people to continue working on their careers. As the generation ages will that continue?
2. Economics - As a generation we graduated college into the "Great Recession". I had an offer from my internship at an investment bank rescinded as that investment bank was in the process of imploding. Many of my friends with liberal arts degrees ended up jobless for years, went immediately to grad school, or took menial low wage jobs just to scrape together enough money to drink with their friends on the weekends. There are a few years of graduating classes '07-'09 that took on student loan debt, instead of mortgage debt. Does this mean that the shift away from home ownership is permanent or just another reason it's delayed?
3. Pricing - The demand for walkable cities far outpaces the supply. Rents are finally coming down a little in Manhattan but they have been outpacing wage growth for a decade. So even if Cardone is right about the demand, will the constrained supply price out a lot of people? To quote the Bloomberg article above, "Additionally, the remaining “mega-elite” workers in top-tier cities like San Francisco will struggle to find adequate service labor -- teachers, police, firefighters, healthcare workers, not to mention restaurant and retail workers. And we’ll have to see how they end up dealing with that."

Those are just the top three anecdotal reasons why I question if the shift from white picket fences, to apartment complexes is permanent or just delayed due to a mix of factors. A market correction or recession would completely wipe out my points 2 & 3. Grant Cardone has $650mm in real estate and I just bought my first two investment properties this year (both SFR) so take my opinion with a grain of salt. I'm not saying Cardone is wrong, just playing devil's advocate. I'm curious what the BP community thinks.

Hi BP Community,

Are there any developers or rehabbers on here that use low income housing programs to finance their deals in New Jersey? Whether they be LIHTC, CDFI Loans, historic rehab tax credits, etc. I work on the institutional side of these programs but am trying to help a friend get the lay of the land in Essex County, NJ and understand the drawbacks from a developer's perspective. Any help is greatly appreciated.

Time, time is the difference.

We need all cash to buy from the current owner.

@Brent Coombs

@Brent Coombs we don't mind putting money down in the deal. Was just curious if we could reduce the amount down by capitalizing on the spread between purchase price and market value.

Ah gotcha, so they will appraise and lend on market value but the loan size is capped at our purchase price?

Thank you @Harjeet Bhatti!

So what you are saying is that if I refi right away, a conventional lender will only appraise the property at our purchase price and not at market value?