Is this for real? $2700 section 8?

Question

Cash@CashCowComplexes.com

Staying in a hotel and this comes up on the wifi advertisemet page. Ever hear of these people?

Dave M. · Answer

K. Marie Poe I particularly liked:

Will I be able to have my property rented?

A. Yes....
...areas with high rental occupancy percentages (65% in some cases)...

At least you have the 4 months of vacancy to fix all the damage from those "tenant is a tenant" types.

Mark H. · Answer

They lost me when they said monthly payment - piti = profit...  
ummm... no...

Account Closed · Answer

I think there might be more to the sales strategy than wholesaling. There's property management being offered.  And if the pictures are accurate, it does appear to be new construction developed for rental markets with maximum bedroom space.  I wouldn't be surprised if the sellers own or have close ties with a mortgage brokerage.  One stop shopping from development to lender to PM.  Bummer about the typos and bad grammar though.

Account Closed · Answer

Whoa.  I checked out the site and the FAQs. May I suggest that everyone steer clear with out a ton of due diligence.  Some of the answers about their PM and placing tenants were nonsensical.  "A tenant is a tenant", "bad credit is OK".....what are they talking about?

In the FAQ they make clear that they are in LA County but it doesn't say which cities. There are rent control issues in several munis in LA County.  The units are most likely exempt from rent stabilization since they are new construction.  But City of LA rent control (and others) includes a host of limiting and awful things like permanent tenancy for residents unless the owner moves in, etc.  Buyer beware.

Account Closed · Answer

Jeff:  where in CA?  You can look up Section 8 rents at most CA county and city housing authority websites.  S8 in my home county in SoCal pays more than $2500 for a 3BDR unit.  The max any of my RE farms in the Central Valley pays for a 3BDR is $1050.00.  My daughter lives in Berkeley, and I'm sure S8 is more than $2500 for a 3BD.

Trouble isn't the FMR or S8 but rather the lack of an available voucher tenant.  Most counties (if not all) in CA have had closed waiting lists for years.  There are a limited number of vouchers out there and there are simply not enough for as many landlords that would like S8 tenants, especially these days.  Voucher tenants have choices.  Sec. 8 tenants pay a portion, sometimes small, of their income towards rent.  They don't always choose the newest or biggest.  They choose the unit with the least out of pocket costs.

I think using S8 rents as a marketing strategy is smart......for the developer.  Let them fill the units with S8 tenants paying the max FMR and then see how that goes. I'd be interested in buying the unit a year later with some data.  :)

Jeff S. · Answer

FROM THEIR WEBSITE:

"Wholesale
In our Wholesale Program, you may purchase multi-unit properties at 25% - 35% below market value. After repairs have been made by licensed contractors, you may opt to sell properties to our pre-approved buyers or keep the properties for a long term strategy. Selling the property to pre-approved buyers will allow you to continue to replicate the process, with an estimated ROI ranging from 80% to 120%+ annually. Holding the property will allow you to earn 15% - 20% ROI, while increasing portfolio value through future appreciation. Financing may be used for qualified applicants.

CONTACT US"

Jeff S. · Answer

Besides, it is hard to trust anyone that has typos in their website.

K. Marie Poe, don't know anymore than you. It just popped up once not to be seen again.

One could consider this wholesaling listed properties, assuming they are listed (they mentioned licensed agents).

Jeff S. · Answer

So were talking lets say 1200 sf per side at $140 psf. 2400x 140= 336,000/32,400 (2700x2x12x.5) = 9.6%. Not terrible for new construction.

5 beds would take a thrashing though. Interesting concept.

Dave M. · Answer

Try:
http://cashcowcomplexes.com/

Watched the video that came up. Heard the reference to duplexes with 5 BR per unit but I also heard construction costs of $140-145/ft so even at $2700/unit/mo doesn't sound like much of a deal.

Jeff S. · Answer

Sorry, tech retarded. What they are saying is they are building new duplexes with 5 bedrooms each and getting $2700. I thought they were talking about per unit. This is in CA.

The site didn't come up this time, will see if it comes up later.

Is this for real? $2700 section 8?

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