All Forum Posts by: Wyatt Franta

Hey Matt,

Are those closing costs accurate? typically, closing costs range between 1-2% of the purchase price. I use 1.5% for my projections. Not a big deal here, just would help tighten up the numbers a little bit in that regard.

I agree with @Alexander Bacon, your CapEx is too low. Depending on the age of the property, reserves range between 8-12% (8% for newer properties, 12% for older).

Have you already received a quote for HOI? 

Property taxes seem very low, but this property could also be in a state with a low tax rate.

5% rent growth a year is aggressive. Aim for 5% but plan for 3.0-3.50%.

Looks good other than that,

Good luck!

That's the synopsis of it. Please read the bill on your own. It's not easy to try and summarize 21-pages of potential legislation into a few posts.  

Below is a synopsis of the proposed bill.
(I do not stand by the following information, please perform your own due diligence to confirm its accuracy)

Affordable Housing Acquisition Fund

This fund aims to ensure the following:

Tenants shall have safe & habitable living conditions

Property owners will not face financial hardships

Prevents a mass exit in the affordable housing market that results in 2008 V2.0

Applicants must adhere to the following guidelines:

Owners may not sell the property without notifying HUD

HUD must approve of the buyer

HUD retains the ability to disclose to the buyer the seller's intent either to sell or transfer the property

HUD will only allow the following buyers: Non-profits, public housing agencies, Co-op housing, community land trusts, or a state/local gov't agency specified by the Secretary of HUD

HUD will provide purchase assistance to eligible buyers up to the full purchase amount

The agreed-upon sale price between buyer & seller may not exceed Fair Market Value (FMV)

It must comply with the Cranston-Gonzalez Natural Affordable Housing Act

Tenants are only subject to just-cause evictions

Tenants may not be discriminated against based upon the same criteria in the previous post

Residents of affordable housing shall be provided the following free, voluntary services:

Healthcare, employment/education assistance, childcare, financial literacy education

Tenants shall elect a resident board/council that will control the living & operating conditions of the property (HOA-esque?)

Same recapture penalties shall apply to violators of the 5-year freeze period 

Below is a synopsis of the proposed bill.
(I do not stand by the following information, please perform your own due diligence to confirm its accuracy)

Lender Relief Fund

Lessors will be provided relief payments similar to the Landlord Relief Fund above.

Applicants must adhere to the following guidelines:

Lenders must disclose the following to HUD on all new loans

Race, ethnicity, age, & credit score of mortgagor | zip code of the property, interest rate & structuring of the loan

Location of mortgagee office

practices & systems for outreach and borrower referrals

Below is a synopsis of the proposed bill.
(I do not stand by the following information, please perform your own due diligence to confirm its accuracy)

Landlord Relief Fund

- The Secretary of HUD will reimburse lessors for any loan payments made during the suspension period

- To be eligible for this reimbursement, relief applicants must adhere to the following:

For a 5-year period, the following must be adhered to:

Monthly rents will be frozen to the amount charged to the unit at the beginning of the suspension period

Tenants may only be evicted for Just-Cause reasons

Tenant applications may not be discriminated against based upon income, gender, sexual orientation, criminal record, credit history, nor immigration status

New vacancies in the property must be announced to the public

The lessor may not collect an arrearage in rent owed by any tenant as of the expiration of such 5-year period

Lessor may not retaliate in any way against tenants

Lessor may not report any tenant to credit bureaus

Also during the suspension period, tenants will be reimbursed for any payments made to the lessor by HUD

A tiered-system will be put into place to determine landlord relief priority. This will be determined by assets, revenues, disclosure requirements, and profit status with respect to lessors.

If any lessor is caught violating the requirements of the 5-year freeze period, HUD will recapture all assistance funds provided to the lessor.

Below is a synopsis of the proposed bill.

(I do not stand by the following information, please perform your own due diligence to confirm its accuracy)

This bill is broken into several sections. I will do my best to break it up accordingly in separate posts.

Rent and Mortgage Cancellation Act of 2020

(The COVID-19 suspension period is considered to have started April 1st, 2020)

- Tenant rent will be suspended throughout the COVID-19 suspension period

- No deferred rents/payments will be owed, nor allowed. Tenants will not be reported to any credit bureaus for missed payments

- Residential mortgage loans will receive the same treatment as above

- No foreclosures will be allowed nor commenced during the suspension period

- Once the bill is passed, a system will be put into place to inform tenants & property owners if its passing

- If any party is aggrieved by an adverse action taken by a lessor or mortgagee, a civil lawsuit may be commenced against the violating party within a 2-year window.

- Violation damages are as follows:

1st violation - $5,000 fine

2nd violation - $10,000 fine

3rd + - $50,000 fine or forfeiture of property

Hi Aaron and everyone on this thread:

Read the 21-page bill here: 
https://omar.house.gov/sites/omar.house.gov/files/Bill%20Text%20-%20Rent%20and%20Mortgage%20Cancellation%20Act%5B1%5D.pdf

I'll post my own thoughts on the bill shortly after reading what it has to say.

Hey Fili,

To piggyback off @Joe Villeneuve, the answer is yes. Do whatever the heck you feel will move the process along efficiently while minimizing as much unnecessary back and forth between you and seller as possible.

A.K.A. | If you were running a business and you had to sell a consumer a product, and you couldn't physically meet them somewhere, how would you go about it?

Good luck.

Hey Jonathan,

A few Realtors/investors above took it way more personally than they should have when explaining why you shouldn't make multiple offers. Please don't get discouraged to ask questions on the forums in the future. Normally, our community does a much better job of guiding members in doing things ethically and help to carve out good investing fundamentals. 

While I'm sure you got the answer you were looking for already, I just wanted to hop in here and let you know your question is more common than you may think, so don't feel as if it were a bad one.

Happy investing, and I hope to see you around the forums.

Hi Julie,

This should serve as a lesson to your friend for the future handling of his real estate investing business. He was complicit in the financial irresponsibility of these tenants for far too long and he's now paying the price for it.

Don't pay the tenants to move, and definitely don't threaten them. Both ideas are just begging for more trouble and more lost revenue. 

Your friend needs to stick it out and when the eviction moratorium is lifted, serve them with one ASAP. If he wants to pursue recovering past due rent, he can do that after they're gone. 

Good luck to your friend, I hope it all works out.