I own a 4 acre multi family property "bareground" just north of San Francisco in the Town of Rohnert Park.

I bought it 20 some years ago as a path of progress property,

The first 2 elements happened  it got annexed into the city and the zoning came in Multi family.

Then right next door 120 acres got sold for 240 million the largest single land transaction in Sonoma county history. It sold to Texas Station the Casino company in Vegas. They were going to build the largest Indian Casino in CA and the closest to SF.

Well economy went bust and Texas Station went into bankruptcy and the project stalled… Still waiting for it to be built.

Back to LeHigh,

Lehigh Acres has about 500k platted lots of record and Coral has 250k… Platted lots of record. These were all done in the 50's during the land rush to Florida, Thats why you have roads out in the middle of no where and buildable lots scattered over a huge area.

In my area a septic system will run 5k to 25k to install and water well and filter system about 5k. so the 6500 dollar lot will cost you about 20k to get to shovel ready. The 20k lot  you speak of probably has hook up fee's and could have additional assessments that are paid in your tax's.

Lehigh and Coral are the poster child in the US for extremely large subdivision that were built with no infrastructure codes and no long range planning. I was on a State of CA stearing committee that dealt with what they call antiquated subdivisions. In California there are millions of these lots as well that were platted in the 1910's through the 30's. We took a field trip to Ft. Myers ( circa 1985 to meet with local planners)  Primarily in San Bernadino and Riverside counties. These lots have been traded around for the last 100 years…..  Arizona and New Mexico have some large subdivsions as well…. And on the big Island of Hawaii past Kona there are big tracts of lots also 5k to 20k of them that were platted again before environmental regulations took hold. These Hawaii lots were created on a Lava flow, and you use Cistern for Water and dynamite holes in the Lava for Sewage.

There will come a day in Lehigh that lots that do not have city services will be non buildable until such time as services come to them will be my bet. Its not sustainable environmentally not to mention traffic flow to have 500k lots all 1/4 acre or so and have a 50% or greater build out…. This is why for the very long term one would want to be extremely careful what you bought in Lee county Fl.

YOU GOT IT….

However to be fair to our Welfare folks most of them work… They just need assistance because they have 2 to 5 off spring and work minimum wage jobs just no way they can support their families without help and 995 of them do not have a father contirubuting to the income acutally its the reverse they let the men folk live for free and ramble from one place to another.

You do have the chronically unemployed that will never work.

Most of these are African American males that bounce from house to house job to job and city to city, Its really a cultural issue within their sociodemographics….

I was looking at our Sec 8 rent rolls the other day and we are 97% female african american…. And of course this is the south east and not the Northwest were we only have a 1% African american poplulation. So most of the Sec. 8 here is White. Howevever there is nowhere near the amount of governement assistance that you will find in the south east and mid west. Probably close to 50 to 1 ratio.  For every 50 sec 8 east of the rockies we have 1. and thats no exageration.

This is why when you see our black sports stars you will rarely see the father figure, It will be all about my "momma"…

The US as a whole already has a 50% divorce rate. In the Mexican familes its far smaller than that same with chinese Indian and such, In the Black community its far higher.

JLH

Nigel,

When you say your buying pre foreclosures with financing already in place. Do you mean you are buying direct from the person who is losing the house and you take Title SUBJECT TOO the exisiting mortgage or deed of trust?

If so are you aware of the new federal laws and most states have state laws that pertain to this activity, To consult someone in forelcosure you need to be a licensed Real estate agent or Lawyer. There are anti equity skimming laws.  There are restrictions as to how much profit you can make on these deals and if you make more than a certain amount the previous seller is entitled to some of those funds… On and on. There were a lot of scammers in the Subject Too market.

And not to mention the Alienation clause in the deeds of trust or Mortgages. Not to be confused with Alien's. This clause allows the lender to call the loan all due and payable if the property has transfered ownership from the original borrower.  Now clever people have work arounds for these in the way they title the property, and a lot of banks as long as payments are being made don't care for a practical stand point, but a few will defiantly call the note due if they catch the property has been sold without their lien being paid in full.

so just curious how you set them up there in Texas. And Texas has the most fierce foreclosure laws in the country I would personally never borrower money in Texas. It is not a Purchase Money state its a dual action state and here is the difference

Purchase Money states are prohibited from recieving any kind of money judgement for a short fall in the event of a foreclosure on owner occuppieds, and for non owner they rarely ever pursue defficiancies because its a state court action ( full blown trial)

Take Texas and other dual action states when a foreclosure happens the lender not only gets the property but a JUDGEMENT against the borrower and in Texas they will hunt you down to try to collect on the judgement… They go after poor mom and pops and commercial borrowers equally,

So in the event you need to get out of the Texas loan and you have a short fall it can get real ugly real quick.

The Subject Too business has all but died here in Oregon and Washington and CA because of these new laws. Now there are people every day that break the law,

JLH

Most big cities have embarked on some sort of revitilization as you describe.

Detroit put Casino hotels downtown.

Portland were I live went with extensive Loft conversions and tax free zone's…. NO property tax for 10 years. and there are still areas if you are under the mediam income you can get 10 year tax abatements. Most of those are only avaliable for Owner occ.

Whereas most of these types of projects got stalled here in the credit crisis, hopefully you will have some thawing out.

I think another trend your seeing is the upper income. instead of paying big bucks for a golf course home in the Desert or Florida, they are buying these condos and lofts in the towns they live, selling their big suburban home and then buying something smaller in the warm climates or just travelling.

I would say 25% of our downtown loft sales are to retire's who are moving from the suburbs back downtown.

I just have to wonder what our audience thinks of these conversations.

I have just got to think they have no clue as to what we are talking about.

Tenants that trash units, Tenants that the US governement pays for their rent and they still trash the units…. Just think how RICH a country the US would be if we did not support all of these people. I am dead certain a person could not just wash up on the shores of Aussie land and live for free….. Sec 8 rent EBT card for food….. steal cash where you can..   then have generations of off spring do the same.

How the heck we are still afloat with the amount of money we pay to support all these people I will never know.

Then you have the Mexicans that come accross the border and use our medical care. They use the emergency room as there everyday doctor. B/C in the US  NO one can be TURNED DOWN for medical care because of lack of payment… The African AMercians do the same…. Obama care has some merrit with regards to this.

Its just insane what the tax paying americans pay for.

Now we are hemeraging our properties to foriegners and we are too stupid to figure out what a great deal these rentals are.

Although those Aussies that buy in the hood and low end rentals, will learn a lesson when they loose all their money. Home depot will get the last laugh.

JLH

Lawsjs

They bought theirs in the late 50s to about early 80s

Dad lives on lido island

Son is my buddie. He dates actress,s and is quite the man about town. We have bought foreclosure,s together over the years

Right place right time for the Dougher brothers

Lots of competition for those from syndicators and just flat out rich folks

One of my clients owns 6000 spaces in orange county ca free and clear average space rent 550 a month. That’s cash flow

Mortality rate is very high for these props

That’s why apartments are rated in classes. If this apt in KC is so great why is it vacant and blighted one has to ask the question

There was the day those props were transformed to lofts. But that was commercial to resi conversion not one landlord failing and another buying ones dre ams of 18 percent returns

in the south east we still can get the add on's for refer micro and few other benie's.

Sounds like a market rent type product, do not know anyone that would build a workout facility for Section 8

Good luck with it.

my first thought is section 8 and High end condo's do not go together in the same paragraph.

At least from my experince not many high end condo buyers are going to buy where there is section 8 housing or potential for that.

80 unit apartment building full of section 8 will be over time a building that is a maintenance hog..

Most section 8 apartments I have seen throughout the country need to trade at 10 to 14 caps given the risks and running costs. Investment grade apartments will sell at 4 to 7 caps max. If I was looking at this long term I would look at these options since your asking.

1. If I was going section 8 I would fill it and sell it while it looks nice and new. Make your money and let the buyer figure out what a nightmare 80 section 8 units are like to manage and keep maintained. There are companies that do it but you have to run these buildings like a police department.

2. If I was keeping it as a rental put market renters in the majority ( if you can reasonably do so)

3. At least in most parts of the country Condo Lofts are years from coming back very hard to get take out financing would be my thought.

I have a very good friend from Portland Or were I live who sold her very nice 100 unit building here and went for a 300 unit in Oaklahoma city that had section 8 and lower end renters. That building has just about broke her financially and guess where she now lives.

There is a reason these inner city high cap rate buildings are boarded up all over the country, Crud just drive through Memphis one after the other is a war zone and boarded up. Ya you can buy them for 2 to 5k a door and fix them up but the management is just really intense. On site police or security force is a must.

For the audiance here Most of the folks living in apartments in the mid west are 1 or 2 levels in quality below those renting the little house and bungelows that ya'll are buying for cash flow rentals.

So bottom line for me on apartments is go Investment grade. If you want section 8 do it with stand alone houses. Get a bunch of section 8 tenants living 30 feet apart and you get all sorts of social problems.

JLH