All Forum Posts by: Terrence Wright

Hi Chris,

I don't see much downside in using Section 8. Most of our investors prefer Setion 8 tenants because it eliminates a lot of their risk (i.e. no rent). In a high priced area such as CA, it makes more sense to have guaranteed rent.

I think most people believe that Section 8 = lower quality tenant. This is not necessarily the case. You still have to properly screen your prospects and you can still enforce your lease/policies just as with any other tenant. Section 8 also does very thorough inspections and require upkeep of the unit. Most tenants will abide by all rules and maintain the property because they can lose their voucher if they don't comply. Hope this helps :lol:

Welcome aboard Eric,

I'd have to agree with Eddie on this one. I would get my feet wet by investing in lower priced areas. You get to gain experience without committing a bunch of capital into the deal. There will be no shortage of properties anytime soon so don't think you will miss out on anything.
Good Luck!

Originally posted by Eddie Ziv:

Originally posted by Terrence Wright:

Where else can you purchase and rehab for 20% ARV?

Birmingham, AL, Jackson MO, for the fraction of the taxes paid in Detroit and better weather... :wink:

Thanks for the specifics Eddie. You are correct though.

Typically, in Detroit, for about 12k you can get a nice 3bed/1 bath house with a full basement on a large lot. Easily rent for $700/month with taxes under $1,800 annually. For brick homes, taxes are higher (avg $2,500 - $3,500) but they will generally command higher rents. With the proper cash flow it will be hard to go wrong.

It also depends on your comfort level with certain regions. If you prefer the south, you can definitely make a strong argument for AL, MS, LA. :cool:

Sometimes sellers have to know when to hold their tongue. I've had sellers get comfortable and point out all the negatives about the property. They talked about how the small rooms frustrated them and how the layout of the home was odd. Don't highlight those things to a buyer.

While I applaud the effort, I don't think this legislation is aimed at the right problem.

What makes short sales difficult is:

A. Mountain of paperwork required
B. Understaffed banks are overloaded
with short sale request.

Not sure if $1,000 is enough incentive for banks to speed up the transactions.

The Detroit metropolitan area has a population of over 5 million people. The population in the city of Detroit is under 1 million. There are some excellent areas within metro Detroit but every neighboring community is labeled "Detroit" by the national media.

The local government has been completely overhauled, so it will be intersting to see if there's a shift in their practices. If you are skeptical about the actual city of Detroit, I understand, but the suburbs provide a wealth of resources and opportunity.

I prefer investing in Detroit real estate. Peopl still need a place to live and there is a huge demand for nice affordable housing. Where else can you purchase and rehab for 20% ARV? If you have good property management and cash on hand you can make a killing in Detroit.

Congress is trying to greatly restrict seller financing. The US House recently passed HR 1728 which limits you as an individual to sell real property using seller financing to only once every 36 months (HR 1728 Sec 101 Definition (3)(E)).

Why are they doing this?

Because THEY want to be the bank. They want to control when and where you get your money.

This is bad news for the small investors. Another threat to us all will be from Hedge Funds.

Hedge funds will benefit from government plans to remove toxic assets from the books of crippled financial institutions. Although the burden will be placed on the shoulders of American taxpayers, only professional investors will benefit from these deals. The bailout plans provide these hedge funds with tons of east credit, limits their losses, and allows them to capture a disproportionate chunk of the benefits if the investment pans out. This will create an environment that is ripe for hedge funds to invest in distressed real estate assets. Think about it, wouldn’t banks be more inclined to sell junk assets in chunks of $50 million as opposed to chunks of $5,000.

Thanks Mark

Thanks for the feedback J. It sucks that the credit can't be applied to the HUD.

I'm not suprised it fell through. We don't actually want to stimulate the housing market do we? ( Kidding of course)

Originally posted by jawsette:

There may be another way. Most people that have not bought are renting. Find out if there is a way in your area to get a list of renters. If this is possible then develop a letter for them to respond to as to what they would need in a property to consider buying it instead of renting. Those that do respond should give you a decent list to start with and if your lucky will fill up your properties and give you a waiting list.

Great idea jawsette -

I've put together a first contact letter today. I'm generating a list of non-homestead properties in my target area. I think this will be a nice starting point.