All Forum Posts by: Jordan Ray

Does section 8 housing inflate the rental price tools on BP or rentometer?

I purchased my first long term long distance rental last year in a solid B neighborhood in Memphis with a tenant in place. The lease is up the end of April and I will be able to finish my BRRR on this place with minor improvements and refinancing out. Current rent is $1125 for this 3 bed 2 bath place. I will be able to make it a 4/2 with a bedroom above the garage.
My property manager advised me to keep rent below $1300. I pushed back sighting the BP rent estimator and rentometer having high confidence of a median range of $1300-$1700. His response was that section 8 inflates the numbers for these tools and messes up the market. Is this true?!? I’ve never heard of this. Thanks for your time. 

Quote from @Jordan Ray:

Quote from @Francis Faucher:

Hi everyone, my name is Francis. I'm from Montreal, Canada. 

I've been investing in real estate for more than a decade now. Worked on most asset classes in Canada (ground-up dev, multifamily, single-family homes, hotels, commercial properties, industrial, etc). Even launched and managed several real estate funds.

I specialize in various aspects of commercial real estate investment, like market analysis, financial modeling, debt modeling, risk management, portfolio optimization, etc. 

Why the US market and not stick to Canada's market ? Well, the list is really long. Simply put, there's so much difference economically wise, politically wise (depending on states), financially wise and ease to operate, even remotely. 

For now, I sort of want to start "small" and I'm looking to build a portfolio of single family homes in areas with good price-to-rent ratio where there's good cash flow and low price. I've looked at several sectors like Birmingham AL, Memphis TN, and several other. I'd love to have your input on these market and other market you would recommend. Also looked for Florida's market (we did some land entitlement project in the past over there).

If you also have good direct lender for foreigners I would appreciate the referral. I plan to buy, rehab and refinance. The acquisition will most likely be 100% cash, as well as rehab (simply because I want to make cash offers and be able to close in a couple days). 

I would also like to have your opinion in terms of structure. I use to do business via a C Corp, but because of the FAPI rules, the tax deductions have been lowered to 1.9x instead of 4x. So, to reduce overall taxes and to avoid double taxation, I think I should do it via an LLC that flows through directly to me. But then, some would argue that instead of LLCs (costly), I should hop for an Umbrella Insurance.

I'm starting to build my network in the US, so feel free to connect, I'd be more than happy to chat! 

Thanks!

Francis

Hey Francis! Welcome to BiggerPockets & SFH Investing! Thats pretty awesome you have experience investing in so many different asset types! SFH Investing is pretty awesome in Memphis TN because of how easy it is compared to other markets to land solid BRRRR deals! My local lender I use in Memphis is very familiar with lending to foreigners with hard money! They are Memphis's finest 100% purchase & rehab hard money lender and also WILL NOT let you buy a bad deal! Since your planning to pay cash, if you use hard money you can spread your money out to multiple assets in a short amount of time faster, however if you pay cash you can have better numbers and make higher offers and of course get better deals (just wont be as fast to scale since your money will be locked up for seasoning). As far as your tax questions, I would personally refer you back to your tax advisor or refer you one if you need it. I like to personally use an LLC for my investing but it can be different if you are in a higher tax bracket so you would probably need a tax professional for strategy! Let me know if I can help you with anything in Memphis or North Mississippi!

Hey Jordan,

Thanks for the info!

we will definitely talk next week. I’m wondering about your lender that is doing 100 acquisition and 100 rehab, first time I would see someone do that, but I’m curious. 

Also, for the structure, yes, I already spoke with several CPAs. Usual structure they recommend is the LLC and LP structure with a C Corp or LLC as the GP and myself as the LP to avoid double taxation. I’m wondering if it’s not a better idea simply to buy in my own name, have an Umbrella Insurance in case of lawsuit, then get a DSCR loan. 

Looking forward to our meeting!

Thanks,

Francis

Hi everyone, my name is Francis. I'm from Montreal, Canada. 

I've been investing in real estate for more than a decade now. Worked on most asset classes in Canada (ground-up dev, multifamily, single-family homes, hotels, commercial properties, industrial, etc). Even launched and managed several real estate funds.

I specialize in various aspects of commercial real estate investment, like market analysis, financial modeling, debt modeling, risk management, portfolio optimization, etc. 

Why the US market and not stick to Canada's market ? Well, the list is really long. Simply put, there's so much difference economically wise, politically wise (depending on states), financially wise and ease to operate, even remotely. 

For now, I sort of want to start "small" and I'm looking to build a portfolio of single family homes in areas with good price-to-rent ratio where there's good cash flow and low price. I've looked at several sectors like Birmingham AL, Memphis TN, and several other. I'd love to have your input on these market and other market you would recommend. Also looked for Florida's market (we did some land entitlement project in the past over there).

If you also have good direct lender for foreigners I would appreciate the referral. I plan to buy, rehab and refinance. The acquisition will most likely be 100% cash, as well as rehab (simply because I want to make cash offers and be able to close in a couple days). 

I would also like to have your opinion in terms of structure. I use to do business via a C Corp, but because of the FAPI rules, the tax deductions have been lowered to 1.9x instead of 4x. So, to reduce overall taxes and to avoid double taxation, I think I should do it via an LLC that flows through directly to me. But then, some would argue that instead of LLCs (costly), I should hop for an Umbrella Insurance.

I'm starting to build my network in the US, so feel free to connect, I'd be more than happy to chat! 

Thanks!

Francis

I've recently ventured into the Memphis market, purchasing two SFR properties in the 38127 and 38114 zip codes, with a strategy to rent to Section 8 tenants for their benefits of lower turnover and competitive rents. Despite being remote, I successfully managed full rehab on one property and made significant improvements to the second.

However, I've encountered a challenge with my current property management – while they are genuinely nice people, there seems to be a gap in responsiveness and engagement, particularly in leasing these properties to potential Section 8 tenants I've personally sourced.

Three months into this partnership, and with several interested tenants at hand, I'm considering a change to ensure these homes are leased efficiently. I’m looking for a property manager with a strong track record with Section 8 rentals, who is communicative, reliable, and proactive.

Does anyone have recommendations for property managers in Memphis familiar with Section 8, who could help bridge this gap?

Any property managers out there at specialize in Section 8 in Memphis?

Looking for some ideas on where to start. Is anyone familiar with the real estate market in hot cities in Mississippi?  If so, what would be the best category and cities to start in for real estate? 

Hey I’m in the Augusta/North Augusta area and as I’m driving around it seems like new construction sfh, multi family, neighborhoods and more. It’s like everyday I see a new project starting. 
What do this make you’re actively investing? (I’m not) house hackers, flippers and landlords. Are these good sites to see or threatening? 

Hello!

Rehab ($25-$30k) on my first BRRRR is coming to a close (Purchased mid January) and I am now hunting down financing. I paid cash for the property and am looking for an 80% LTV cash out refinance. I got a quote stating that they could give me an LTV that would cover the purchase price of the house + closing costs ($86k), which is roughly 66% LTV.

The ARV of the townhome should be roughly $130k. So here's my question:

Is it normal to take a pre 90 day LTV to recoup the purchase cost, wait the seasoning period, and refinance the rest of the cash out at a later date?

Or is it better to wait out the seasoning period with your loan balance (I used a HELOC so no hard money lenders or balloon payments) and just refi out in 6 months?

Also if any lenders in the Memphis area have advice it would be appreciated! Thank you ahead of time for any advice!

The first lender I spoke to essentially said 12 months seasoning is all they offer, which would be really unfortunate for my time frame on getting into another property. Is that a standard thing or just simply what one lender might offer? The other two I reached out to did not return my calls as of yet.

Thank you!

Casey

Looking for a mentor to help guide me through my journey as a new real estate investor. I live in California, but am looking to purchase my first single family rental property in Memphis, TN.  
I believe I have found a company that will best meet my needs as an out of state investor. 

Would appreciate advice on whether or not I’m going in the right direction with  the business plan Iv created.

Other topics I’d like to discuss… 

-Should I start an LLC before first purchase.

-Type of deal/loan that would best help me to achieve my goals. 

Thank you!

Quote from @AJ Singh:

@Phil Petite

I am concerned that no rent received in January did not result in you filing an eviction on Feb 1. 

Did you have January rent reimbursed as credit on the escrow settlement ?

Was the property disclosed to you by seller as having paying tenant in place ? 

We filed for eviction last week, it is a long story, but I feel as though and I know that I waited too long.

We did have the January rent reiumbursed as a credit, but it was a lie, as the previous owner did not actually receive the prorated portion of the rent for January (or December 2023, for that matter).

Yes, property was disclosed as having a renter in place paying $1250/mo.