All Forum Posts by: Susan Maneck

Interest will always be lowest on your principle residence. If you tell the lender the payout will go to pay your other debts you can more easily qualify, then use DSCR lenders to cash out money from your rental properties.

Quote from @Lacey Swarek:

Quote from @Susan Maneck:

Be very careful. Much of what goes on in the name of wholesaling in Mississippi is illegal. 

Hi Susan,

  I appreciate your reply, I have read a lot about the red flags on it, and I am aware of what they say about wholesaling period. I however think there are ways, if someone has the funds...to go about it in a cautious way, while following the rules. I see many avenues to take on it.

I did buy one property from a wholesaler but it would have been difficult to sell via MLS because there was an unpermitted house in the back yard. It is Mississippi and one rarely gets in trouble for that sort of thing, but it does make a property impossible to finance. When I go to sell I'll either have to find a buyer here or work with a wholesaler myself. 

Be very careful. Much of what goes on in the name of wholesaling in Mississippi is illegal. 

Quote from @Greg C.:

As someone from out of state, Jackson scares me as an investor. It has the outward appearance of a blighted market, on par with places like Gary, IN or Detroit, MI. The shear volume of tax liens that I saw on auction there a month or so back was stunning. Visually, it looked as though 50-60% of some neighborhoods were up for tax auction. Even now there are SFH available as tax forfeited properties for a couple thousand dollars. To me, this speaks volumes about the local market. I am sure locals would be able to sift through the area to find the gems in the rough, but I can see why out of staters need to yield caution.

They do need to be cautious and I certainly wouldn't buy any property at auction.com or buy tax liens. You absolutely have to check out properties for things like foundation problems and mold. Buying sight unseen is out of the question no matter how cheap the property. However, whether vacancies are going to be a problem depends on the property manager. My properties have never sat for more than a couple of weeks. Jackson does have a declining population, however, which is likely why you won't see much appreciation. 

You have to have air conditioning to go section 8, but it doesn't have to be central air. I had a 2/1 that passed inspection that just had window units. There was one in every room, though. That was the one house I bought in the 39204 zip code. Oftentimes the 2/1 and 3/1 houses don't even have the ductwork for central heat and air. I put in ductwork for central heat in that house but since the window units all worked I didn't put in central air. They have some very weird heating units in those houses and I don't trust them. I also rewired the house because these older homes have nickel wiring which isn't safe. I did not realize about the wiring until I had already moved a family in with three small children. I put them up for a couple of days in a Hilton Garden's hotel suite while we put in new copper wiring. I don't think they ever enjoyed such luxury! 

Huh? Byram is south of Jackson, it is not even in the city limits. It's a nice area, though. 

Quote from @Jay Hinrichs:

Quote from @Susan Maneck:

I wouldn't put South Jackson in the category as West Jackson. I avoid West Jackson myself. I think your investments that went bad were mostly in the 39204 zip code. 39212 is somewhat better. I am not seeing any good properties out there for 50K anymore, but you can find some decent ones for 70K still if you know where to look. These are not poorly built houses but they are older homes built in the '60's. And you are right you have to be *very* careful about getting a decent PM because a vacant home won't survive long in Jackson. 

 Susan I never owned or lent in West Jackson full stop it was all South Jackson between Terry Road and McDowell and all the other main streets there.. I stand by my assessment of the area and since i personally owned over 200 homes there I saw first hand how tough it is to own and manage those.. I Sold out about 7 or 8 years ago and that company made it about 18 months before they had to file BK and the houses that were still standing and not trashed were liquidated for pennies on the dollar. 

Terry Road runs north and south, but I think you mean the area just north of McDowell which is the 39204 zip code. Anything south of McDowell is 39212 which is where my houses are located. I actually checked out one of the properties that company had when it went bankrupt on behalf on one of its investors. The house wasn't trashed but I think the guy had invested too much money into it. I suggested he hang on to it because it was rented Section 8 and was at least cash flowing. There are some bad areas of 39212 but the only good area of 39204 I can think of is Alta Woods. Those homes are old but they were extraordinarily well-built. 

I wouldn't put South Jackson in the category as West Jackson. I avoid West Jackson myself. I think your investments that went bad were mostly in the 39204 zip code. 39212 is somewhat better. I am not seeing any good properties out there for 50K anymore, but you can find some decent ones for 70K still if you know where to look. These are not poorly built houses but they are older homes built in the '60's. And you are right you have to be *very* careful about getting a decent PM because a vacant home won't survive long in Jackson. 

Quote from @Jay Hinrichs:

Quote from @Jonathan Zheng:

Quote from @Nicholas L.:

@Jonathan Zheng

at that price point I am skeptical that they will "cashflow great"

Aside from the DD needed on each unit, the numbers work out after calculating expected gross rent (taken from comps and FMR) less the expenses associated with NOI & adjusted NOI - fall around a 25%-35% CoC return. Unless I am missing something, I don't see how most properties in SoJack don't cashflow.

they all cash flow on paper.. I started HML in Jackson on 2002 up till 2008.. did over 1k loans many times same house after first cash flow investor lost it and it got resold.

Sojack for sure cash flows on paper.. but thats fantasy land especially for an out of state investor I will not lend in that market ever again.  NE jackson ,  Madison county Rankin county sure but those so called C neighborhoods are full of old homes and extremely tough to manage properties with very little choice of PM .. its simply in my mind one of the worst places for an out of state investor to buy.  folks get sucked in by price points.. and paper tiger returns.. Even the local folks I lent to and know well find it very very tough day in and day out..  I just had one of my other clients who tried the market he did not last 12 months and he is already selling .. So you get what you pay for.. but give it a try maybe you will have better luck ..  

there are reason so jack is the way it is.. it used to be all owner occ in the 60 70s etc. and I originally did fix and flip loans for owner occ there in 2002 and about 2004 it changed to 100% BRRR loans to out of area investors.. so ownership transformed from a nice mix of owner occ and rental to virtually every sale these days is investor.

Add on to that most fo the homes are older sitting on a big patch of Yazoo clay so foundations move all the time.. just a tough area.. spend a little more if you like Jackson and get up north of Lakeland and East of the 55  125k price points thats sustainable.. I owned about 20 new builds in Madision county those I did not even need PM for I managed them from Oregon with my staff. 

 I've done well in South Jackson as you know, but I was local until the pandemic forced me out to California. In fact I lived in the neighborhood where I owned most of my property. My property manager is also my real estate agent who I've been working with for twelve years and her husband handles most of the repairs. As for foundation problems, I know people in Madison County living in 300K plus houses that have foundation issues; big ones! Paying a lot for a property will not guarantee you'll be free of foundation issues. In fact I figure that if a house hasn't moved in the last sixty years it probably won't, but it is something you have to watch out for and I've gotten really good at that. One thing you will find is that tenants in C neighborhoods often pay the rent in cash. They often don't have checking accounts, so it really does need to be a PM you can trust and I don't trust any of the big PM companies in Jackson. I've seen houses with them stand vacant for months and just disintegrate before my eyes. One thing you *cannot* count on in Jackson is appreciation. This post-pandemic period is the only time I've seen property values increase substantially since the immediate aftermath of Hurricane Katrina and that was because New Orleans didn't fit into Jackson. One other thing to watch out for, C neighborhoods have bigger lots usually 1/4 of an acre and lots of trees. That is one of the things that attracted me to the neighborhood where I bought my own house and later investment properties. What I eventually found out is that those trees are not your friend. In the middle of June a strong straight windstorm came through and damaged four of my properties. The good news is that labor is so cheap in Mississippi the insurance company paid me more than the repairs cost. 

Mind you, I taught for 20 years at a historically black university in Jackson. My salary never even reached 60K but thanks to my real estate investments I managed to retire a millionaire. It can be done, but you have to be very, very careful and that is harder to do when you are out-of-state. The properties I sold post-pandemic all came with my husband/wife team (who also lives in the neighborhood) so I think they will do fine. 

Quote from @Jonathan Zheng:

Hi all,

I am currently eyeing a couple of individual SFH properties and a small 8-unit SFH portfolio. All of these SFHs cashflow great and have high CoC returns. They need minimal rehab to get to market. However, nearly every lender I've spoken to has a hard minimum of 50k-75k loan value, except for 1 which charges 15% to loan value in closing costs. I am planning on scaling out in this area very quickly, but it would not make sense without leverage.

Does anyone know a private lender, local bank, or credit union that can facilitate these transactions with reasonable fees?

Thanks in advance!

 Unfortunately the credit unions in the area will only lend to owner occupied and not to investors. I tried to get lending from Hope Credit Union (one of the best ones in the area) to buy my son a townhouse on the NE side while he was in a PhD program at the Medical School. When they found out how much property i owned (and most of them were free and clear) they refused the loan. I eventually got a conventional loan but this was a property that cost 130K, not my rental properties which I bought in your price range. You might try Bank Plus or Trustmark. Unfortunately I can't offer you much hope in this area. Smaller mortgages are usually only available to owner-occupied where not lending brings accusations of red-lining, but it doesn't apply to investors.