All Forum Posts by: Laura Janosko

Here are my personal rankings:

1. Will I Have Enough to Retire Using Real Estate?

2.Prove Your Friends Wrong with Real Estate Investing Financial Independence Math

3. Just $50 More Per Month - The Impact of Slightly Better Cash Flow on Achieving Financial Independence and Early Retirement

4. Saving $100 More Per Month - The Impact of Slightly Better Savings Rate on Achieving Financial Independence and Early Retirement (using Stocks and Real Estate)

5. How to Easily Acquire 10 Rentals and Achieve Financial Independence

6. A Faster Way to Acquire 10 Rentals and Achieve Financial Independence (Nomad)

7. The Case for Healthy Cash Reserves When Investing in Real Estate

I came across this article about modular construction which can cut costs by 20% and speed up production by between 20% and 40%, since the build is unaffected by weather and foundation work can be completed simultaneously with the rest of the build. Has anyone used modular construction? If so, what was your experience? It seems like a great solution for affordable housing.

https://www.lgc.org/newsletter/the-move-to-modular-housing-cutting-costs-to-advance-affordable-housing/

Here's another forum that goes into detail about the LIHTC development process: https://www.biggerpockets.com/forums/44/topics/193846-low-income-housing-tax-credits-lihtc?page=1#p2056421

Thanks @Jill F.! We got the cabinets from Kraftmaid outlet :) Really happy with the way it turned out.

Hi Andrew. The development process is a little more complicated since you'll be working with several different agencies. If you're applying for new LIHTCs, you'll need to apply for them at the state and/or federal level. Then, you'll bring in an equity provider to purchase those tax credits to offset their tax burden. You may also need to work with other agencies to provide soft sources of gap funding to make the project work. If you're looking to get project based Section 8 subsidies, you'll need to work with the local Housing Authority. 

In terms of ownership/management, typically a LIHTC deal will have slightly higher admin expenses and management fees than a market rate deal. However, LIHTC projects generally have lower vacancy levels than market rate properties. LIHTC properties are typically more difficult to sell as they are subject to rent restrictions which are determined by the area median income set asides for the units. The set asides are typically outlined in a 30 year land use restriction agreement that requires the property to lease to low income tenants.

Here's an article explaining the basics of the 4% and 9% LIHTCs: https://www.novoco.com/resource-centers/affordable-housing-tax-credits/lihtc-basics/about-lihtc

If you have any questions or would like a second opinion on any deals you're looking at, I'd be happy to help!

I haven't watched the 60 Minutes episode, but found this website was really helpful in explaining how a whole host of factors influence homelessness: https://www.homelesshub.ca/about-homelessness/homelessness-101/causes-homelessness. Because there are so many factors, I believe it will take a combined public and private effort to end. However, here are some things we as investors can do to help: 1) Volunteer with a local organization working to help end homelessness. 2) Invest in affordable housing (Section 8, low income housing tax credit (LIHTC), Veterans Affairs Supportive Housing (VASH), etc.) by accepting subsidy vouchers at your rentals, partner with experienced developers on larger projects or invest in equity funds that provide capital to develop affordable housing. 3) Invest in naturally occurring affordable housing.

If there are truly affordable rents at the property, the owner cannot charge or collect the market rents. There may be a restriction on the property deed or a land use agreement that restricts units to the maximum allowable rents as determined by HUD. If you send me the location and a description of the restrictions, I can help determine what the maximum allowable rent would be. It's not common to sell affordable apartments, so the original restrictions may have expired or may have been self imposed. Definitely check all of the paper work first though.

The CHN homes are typical single-family homes and can be conventionally financed. I’m not sure about CCSS. Tiny homes can be difficult to finance, but residents have equity in the paid off asset. Both programs allow tenants to become owners of the properties after a set # of years (for CHN it’s year 16 and for CCSS it’s year 8). 

I don’t exactly follow the references in tenants getting trapped into affordable housing or starting the American Dream, but under both programs tenants receive years of classes, training and other services before taking possession of the home. If you’re looking for government financing (grants, tax credits, etc.) the process is likely competitive and may require that you offer some type of services for residents.

However, if you are looking for a solution that does not include government financing, there are lease to own programs and tiny home communities.

Lease to own programs are where the property owner enters into a lease with a tenant with the agreement that after certain conditions are met, the tenant may exercise an option to buy the property. The resident may be able to capture the equity from the rent being paid to date serving as a down payment and appreciation. https://www.zillow.com/mortgage-learning/rent-to-own/.

Tiny home communities are much cheaper and typically more ecofriendly/sustainable than a typical home, which reduces costs associated with homeownership. However, it often means less equity as well and may be more difficult to finance due to the low purchase price and the type of asset. https://www.thetinyhouse.net/how-to-finance-a-tiny-house/

This is pretty broad. Feel free to ask follow up questions.

Thanks all! It turned out I had originally signed up for Zillow years ago under a yahoo email account. Even though the rental was posted via my gmail account, I had to use the yahoo account to see the applications. It was very confusing and frustrating, but Zillow did eventually get back to me after the 4th email. I've since switched to Innago which allows you to customize the application and also does eviction screenings. Innago also has wonderful customer service.

There are two non-profits that have successfully modeled the type of affordable housing development you’re envisioning. The first is Cleveland Housing Network. They offer a lease to purchase model for low income individuals and have created a manual that outlines how to get started: https://chnhousingpartners.org/about/lease-purchase-flagship-program/. The second is Cass Community Social Services https://casscommunity.org/tinyhomes/. They build tiny homes for low income individuals who are eligible to own the home if they reside in it for 7 years. There are lots of funding options for affordable housing at the city, state and federal levels, including low income housing tax credits, grants and subsidies such as Section 8. Please let me know if you have any questions or if there’s any other way I can help.