All Forum Posts by: Patrick Nissim

I suppose I just have different outlook on this than you guys. C’est la vie.

Wait I think there might be a disconnect here... The objective is not to make money whatsoever (hence, a non-profit), the idea is to give the tenant the easiest route to ownership by letting them use Section 8 assistance to help them build equity. This is a not a for profit venture, this would be to help people via non-profit.

If there are pieces of how I've imagined this that could be problematic for a prospective tenant/homeowner, I'd want those things to be avoided SPECIFICALLY to make sure people aren't taken advantage of. 

Hey everyone!

I am a huge believer in homeownership and after growing up in the bay area, I see what can go wrong when community residents miss out on their window to own and end up getting priced out.

For a long time I've tried to scheme on ideas for a non-profit to provide families and people with low incomes with the easiest possible route to ownership.

For example: Buy DLBA at sub 5K, fix up 75K, and try to structure a lease option to buy (allowing tenants to use section 8 to subsidize cost). 

I've singled Detroit out because: 

a) price barrier is low

which means

b) tenants may have a fighting chance to afford it once fixed up and in program

because

c) if we can give more community equity back and Detroit takes off, the added equity can provide a source of wealth and opportunity.

Wanted to post this to see if:

a) there was something already out there like this

b) People in the area had any thoughts on this

c) if there are any suggestions or criticisms

Thanks!

As a mortgage broker (California), it was disorienting trying to find an active lender for months after COVID hit. Some stopped doing cash out and some pressed pause on everything. It seemed like the only way to get anything done was through hard money, even with our blue chip clients. Bankers who’d never done a small business loan in their life suddenly were doing PPP loans exclusively and constantly.

But we’re starting to see some lenders already loosening up, with impressive rates and cash out. Today I was quoted a 10 year rate as low as 3.08% for Multi-Family (+$6M) in Sacramento - not bad at all.

One thing though - there is a chance they’re going to ask to hold 6mo - 1yr principal/interest reserve. It’s not the worst condition in the world, but it’s something you may need to be prepared for in the short term. Some lenders are also raising debt coverage, but that’s sometimes exclusive to sector (office / retail).

If you’re a qualified borrower with strong occupancy and P&Ls, you can definitely get away with a cash out deal with normal conditions (and apparently a killer rate).

But for those wondering what the RE finance end is looking like, that is at least a glimpse into what we’ve discovered over the past 3 months. Hope this is of help!

Absolutely I'd love to connect! Sent you an invite.

Thanks!

So I'll start by saying I've done some research on home costs, rent prices, employment #s, etc so I'm not starting completely from scratch. Indy, Detroit, and St. Louis all provide me similar low barrier to entry pricing but each have their own flaws. 

What I'm looking for is feedback from those who are currently in these markets and what they like about the upside for these prospects. I will be trying to tour these cities in the coming months before making a final decision but anecdotal insights provide a much more colorful perspective for me to start sinking my teeth into.

Thanks!

Hey everyone. I have a 203k opportunity for a mixed use property in the bay area. I need to find a contractor who is reliable and does quality work. Willing to pay fair for the peace of mind that it was done well. Anyone have good recommendations?

I live in Northern California and am plotting my investment strategy for the coming 2019 year. I've been floored by the prospect of a 203K / Homestyle loan, but have yet to crack the code on how I could make it cash flow for me with only 3.5%-5% down (in the Bay Area at least....)

After speaking on the phone with a loan broker, I was told that you could go as far as building an entire property with a 203k loan as long as there is an existing foundation. I believe you can even pull the FHA Duplex Loan limit to turn a Single Family Home into a Duplex.

My gut tells me this is a very powerful tool that I haven't cracked the code on fully, just yet. I'll list several of my questions and if anyone has experience or thoughts, feel free to tackle any or all of them.

1. Has anyone found a good way to cash flow with these loans?
2. Has anyone ever built a home from scratch with an FHA 203K (acquiring land with just a slab on it?)
3. Has anyone turned a SFH into a 2-4 unit building with a 203k?
4. In a market like the Bay Area where the price to rent ratio is 38.5 - 45.88, is it cheaper to build vs. buy existing?