The MOST complex deal ever! 63 units, HAP, LURA, City loan...

[Andrew Ramler]

I am excited to share a success story!!! After 11 months of being under contract, we recently closed on a 63-unit apartment near Down Town Dallas! It had a HAP contract, an assumable city of Dallas loan, non-profit participation required, a LURA (land use restriction), city council approval requirements, TDHCA approval, past owner interference. Don’t know what half that means? Neither did I a year ago. For ease of reading, I broke them out below.

• HAP – Housing Assistance Payment. This is a type of HUD payment where the voucher is connected to the property instead of the tenant. In our case is renews annually and pays the majority of the rents.
• LURA- Land Use Restriction Agreement. In our case, we are restricted to leasing the property to individuals that have the past in mental illness or/and homelessness. We also are required to have a social provider available to the tenants.
• The city had given a loan to a previous owner that is “forgivable”. In other words, you don’t have to pay it. But there’s a catch, if you ever break the LURA, the whole loan comes due. To assume the note, we had to go before city council. We also had to talk the city into taking 2nd lean position to our bank
• TDHCA also had to approve our purchase.
• The owner that sold it to our seller sold it with owner financing and when we were under contract he tried to foreclose (unsuccessfully) on our seller and then when it came time to close would not give payout amount for the balance of owner finance loan.

As you can imagine the legal fees and brain damage we occurred getting this one a crossed the finish line were enormous. BUT still so glad we did it, it's absolutely the best property I have ever purchased and taught me more than college!