Forum Replies Created
Trish/Karen
We were told to expect a timeframe of max 6 months from sending off our deposits and the property being ready to rent. The process is going slower than expected, but I am told this is largely because they have been overwhelmed by the number of overseas investors, particularly from the UK and Australia, but also the rest of Europe and the Middle East. They are looking to use an additional Title company to speed up the search processes for each plot.
To qualify for the full SRAP funding the properties must be completed and ready to rent within 6 months. I have found out since applying that the SRAP is split into two payments: an $18,000 completion bonus for completion within 6 months, and $55,000 forgivable loan which is for 5 years. Both are due on completion when the property is ready to rent and will be paid as 2 separate cheques.
The purchase price for a duplex was $244,900. Initial costs are therefore made up of a 10% deposit of $24,490 plus costs of $6,740, which I rounded up to $32,000 to be safe. Prices have increased since we committed to buy to $262,500 which means an extra $2,000 deposit, but the $6740 is still the same. So initial outlay per duplex would now be $32,990. The latest information I have seen on rents being acheived is $2,000 per month per duplex.
Since we agreed to buy our properties I have become more involved with Danny and Tony and have now become an agent to help them attract people to the seminars in the UK, but I’m not involved in the selling process. I appear to be getting a bit more inside info on questions that other investors are raising. If I can be of any further help I am happy to continue answering any questions you may have on my experiences as an investor.
Regards
Paul
Hi Karen
We are buying in Biloxi which is in Hancock County. There is a lot of info on the MDA website and a lot of it is old but it is being updated, for example the rent increase for this year were posted a couple of weeks ago (which makes the deal even better).My E-mail address is [email protected], but I am about to go on holiday until next Friday. By all means send me your questions if you can wait a week for my answers.Alternatively, contact Tony Staniforth through his http://www.investmentpropertydirect.co.uk website and he should be able to answer your questions.I would recommend that you register with his site and go along to one of the presentations if you can where you will meet Danny Silver. They are good people to deal with, lots of info and no hard sell. There websites have some good links which save hours of searching yourself, as well as up to date news on prices, rents, MDA etc.Kind regardsPaulRedwing
You read them all too!Spreading the word has been really helpful to me too. As people have raised questions, I have sought more answers. Fortunately the answers I’ve found have been good. Its a brilliant way of getting feedback on what you are doing (even the cynical ones).I’ve sent my money off now so its all systems go, though I still have 60 days cooling off for a full refund if I need it.Never jump in with both feet until you have done your research (that’s my motto). I am perfectly content with this investment and will do more in the US when I get the money from the federal government in about 6 months time.Thanks for your good wishes, and good luck to you too.RegardsPaulHello Patriotsoldier
I am a UK resident and buying the property with my wife. SRAP funding is only available to individual investors, not companies or corporations. The developer is providing a complete turnkey service to us including doing all the necessary paperwork to register with the IRS, open bank accounts, completing the SRAP application paperwork etc. They have also recommended and will set us up as an LLC to provide a personal tax shelter. I/we are not familiar with investing in the US and our accountants are looking at our position as UK tax payers with respect to the SRAP grant (which is a forgivable loan) and income earned from rental.Having said that, this is such a good deal (with SRAP) that I am not too concerned about the tax position and would do it anyway if I had to pay tax on all income/gains (as I would if investing in my own country). However, with the 50% accelerated depreciation given by the IRS which can be carried forward for up to 15 years and holding the properties within the LLC, I believe that we will only be liable to UK tax on funds taken out of the LLC subject to double taxation agreements.Not all Go Zone property is eligible for SRAP funding, but all new property bought in the area benefits from the extra tax breaks given by the IRS – its on their website.If you are purchasing as a company/corporation or syndicate I doubt that you will be able to get SRAP funding, however the extra tax breaks may still be available to you in the Go Zone.Once I have the SRAP money (in about 6 months) I intend to use it (in the LLC) to purchase more property in the area. The SRAP funding is such a good deal, in my opinion, that you may want to look at buying some properties as individuals first and then using the extra money you get back to buy more properties.This is how I understand my position as a UK investor/tax payer and of course you should do your own research to determine the best situation for yourselves. I do know from Danny Silver that Australians are buying the same properties as me. You can contact him through his website at http://www.propertydirectgroup.com, he’s not a tax expert but may be able to tell you how other Australians are arranging their property affairs for purchases in the USA.Good luck with your investments.PaulThanks for that Irv.
Which developer were they using? I am buying from Global Community Development LLC and the builder is KB Homes. I will make further enquiries.I understand that the administration of the SRAP funding by the MDA and HUD was not good to say the least in the early days, but have been told that many of the teething troubles have now been ironed out for the next round of applications. Indeed a fellow property investor has spoken to the MDA London office and is happy to proceed. I have also spoken to an investor who has recently received his SRAP funding from the first round and it did take longer to come through than first expected.I have found that during my research, many websites with information that was posted over the last 18 months have never been updated and contain out of date information. Also, the way the MDA presents the informations itself is not crystal clear, in particular their FAQ section for SRAP where little distinction is made between the four types of qualifying purposes for the funding (rental subsidy for landlords being only one of them).I would be pleased to hear of any further progress you make in this area, good or bad. I will be happy to share my contacts with you if you wish to take matters further.RegardsPaulThanks Michaela.
I have followed your link to gozoneonline and requested more info from them. They make some good points and its well presented.Applications for round 2 funding are now being taken for SRAP, and a further block may be taken in September.US tax payers already get very good tax breaks for investing in property and the additional ones for this region also apply to monies earned in the US only. Further tax may be payable by non-us residents subject to double taxation agreements between countries. As far as I am concerned, its a good deal even if I have to pay tax on my profits. Paying tax will mean I’ve made money!RegardsPaulThanks Bridgette.
If its a scam, it was started by the US Government and is being managed by the Mississippi Development Authority. Google the Go Zone and there are over 16 million pages on it. A pretty big scam to carry off!
But hey, its no skin off my nose if you ignore it.Thanks for the compliment Rhys.
Properties have to be built above the flood level to comply with the requirements of the SRAP funding. These do.I went to a seminar presented by Danny Silver in the UK last week and he gave an interesting insight into the US property market. The USA, like any country in the world, does not have a single property market. There are 50 states which are like 50 countries, and each city in each state has its own market, different areas and types of housing within each city have their own property market and so not all areas or states will behave the same.
He told us that there has been a property building boom in Florida with holiday homes in particular. Close to a property that he has owned in the Palm Beach area since the 1980’s there are 27,000 brand new unsold holiday properties within 40 miles. There are large volumes of vacant property all over Florida and so the prices are likely to take a long time to recover there. So, beware the temptation to snap up apparent bargains at knock down prices on the expectation that prices will recover quickly.I am currently investing in 6 properties in the Go Zone where there is a severe shortage of property and demand for housing to rent is high, and the government is providing incentives for investors to buy.See my post “The US Government will pay me $36,500 to rent out a property in the USA”Paul
