- Hi guys. Just browsing around and came across this website. Thought I’d spread some news.
I have just agreed to buy 3 duplex (pairs) of 3 bed 2 bath houses in the USA for $32,000 downpayment each and will get a payment back from the federal government of $73,000 for each, positive cashflow of over $40,000 per duplex.
I went to a presentation last week about property in the Go Zone in the USA. If you have not already heard about it, this is an extended area of the southern USA which was affected by hurricanes Katrina and Rita a couple of years ago. The US Government is pouring billions of dollars into the area to revive the economy and provide low cost housing for displaced residents and newcomers entering the area to work. They need to build over 60,000 properties to satisfy demand.
In certain areas of Mississippi, the development authority have established a Small Rental Assistance Program (SRAP) to provide affordable rental properties for everyone during these times of high rental demand. What I like about the deal is that the incentive is from the US federal government and not a fake cashback scheme from a developer. I think this is such a good deal that I want to let as many people know about it as possible. I don’t want to sell it to them, but let them do their own research and deal with the companies directly themselves.
There is plenty of info available on the internet about the area and the government funding. The developer is represented by Danny Silver who is well respected in the US property market, his website is http://www.propertydirectgroup.com which is a good place to start your research. His UK based partner has a website http://www.investmentpropertydirect.co.uk which is under construction and I understand is almost complete. It can currently be viewed and used to register interest, and you’ll get some E-info sent back to you.All the paperwork to buy is sent out by E-mail from the USA so I don’t see why any investor anywhere in the world can’t become involved. I’ll try to find out if they have a representative down under.This is such a no-brainer deal for me that I have committed to 6 properties which is the maximum number for which an individual investor can get the SRAP funding. So by investing $96,000, which covers a 10% deposit and all closing costs, I will have 6 brand new properties to rent in a high demand area and $219,000 back from the US government. Where else can you find a deal like this? Check out the websites and do your own research into the Go Zone and SRAP.
You are a moron. Why buy on a flood plain?
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.Paul Graveling wrote:Hi guys. Just browsing around and came across this website. Thought I'd spread some news.I have just agreed to buy 3 duplex (pairs) of 3 bed 2 bath houses in the USA for $32,000 downpayment each and will get a payment back from the federal government of $73,000 for each, positive cashflow of over $40,000 per duplex.
I went to a presentation last week about property in the Go Zone in the USA. If you have not already heard about it, this is an extended area of the southern USA which was affected by hurricanes Katrina and Rita a couple of years ago. The US Government is pouring billions of dollars into the area to revive the economy and provide low cost housing for displaced residents and newcomers entering the area to work. They need to build over 60,000 properties to satisfy demand.
In certain areas of Mississippi, the development authority have established a Small Rental Assistance Program (SRAP) to provide affordable rental properties for everyone during these times of high rental demand. What I like about the deal is that the incentive is from the US federal government and not a fake cashback scheme from a developer. I think this is such a good deal that I want to let as many people know about it as possible. I don’t want to sell it to them, but let them do their own research and deal with the companies directly themselves.
There is plenty of info available on the internet about the area and the government funding. The developer is represented by Danny Silver who is well respected in the US property market, his website is http://www.propertydirectgroup.com which is a good place to start your research. His UK based partner has a website http://www.investmentpropertydirect.co.uk which is under construction and I understand is almost complete. It can currently be viewed and used to register interest, and you'll get some E-info sent back to you.All the paperwork to buy is sent out by E-mail from the USA so I don't see why any investor anywhere in the world can't become involved. I'll try to find out if they have a representative down under.This is such a no-brainer deal for me that I have committed to 6 properties which is the maximum number for which an individual investor can get the SRAP funding. So by investing $96,000, which covers a 10% deposit and all closing costs, I will have 6 brand new properties to rent in a high demand area and $219,000 back from the US government. Where else can you find a deal like this? Check out the websites and do your own research into the Go Zone and SRAP.
1 word – SCAM
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.good luck … hope things work in your favour
Thanks Bridgette.
Hi Paul,
just did some research SRAP funding closed. Benefits are higher if you are paying taxes in America.
http://www.gozoneonline.com/GZIntro/1/med/SRAP2.htm
All the best, anway
MichaelaThanks 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!RegardsPaulPaul,
Yes the program is "real" but be very careful. I put real in quotes because as far as I know very few people (if any) have actually received funds from this program yet. At minimum I would put your tenants in on a month to month lease so that should you be declined for any reason you can bump the rents to market rates.
As to taxes please note that the SRAP is a LOAN and stays that way until forgiven (beginning in year 3). Until that time you should not receive a 1099 on the dollar amount received.
Also you should be aware that while the funds are sourced from federal funds this program is administered and paid by the State of Mississippi. Not sure why this would make any difference but thought I should bring it up.
Lastly, if the tone has not come across yet, you should be very careful with this. I know of people who have bought into this and basically they have gotten screwed over. Not the fault of the program but from the developer. We will be placing investors into this program but not until I can verify a few things, including that the State of Mississippi finally has their act together on this.
Sincerely,
Irv Wilson
Scottsdale, AZThanks 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.RegardsPaulHey Paul,
Thanks for the post……..
Can I ask are you an American citizen or are you purchasing property internationally?
Also,
Are you purchasing the propertie/s under your personal entity(a a personal investor) or under a trust/LLC/Corporation.Reason for asking…….
I intend(as a part of a small syndicate) to purchase US property over the next 6-12 months, I am an Australian citizen. Though my research doesnt take me to your particular area, I am querying your thoughts on the better method to go as far as registration of Company/corporation status.Hello 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.PaulWOW
Google really is your friend, you must be impressed as you've prommoted the Bejeezus outa this
http://www.homemove.co.uk/forums/the-go-zone-usa-seminars-1894.html
http://www.singingpig.co.uk/forums/1/507663/ShowThread.aspx
Out of my comfort zone Paul, I like it "nice an simple" and would be hesitant about jumping in with both feet (make haste slowly maybe a good motto)
I hope it all works out though
Redwing
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.RegardsPaulHi Paul
We too have been looking at this, and know a couple are in the process of purchasing a duplex. Do you have anymore info on round 2 ? The MDA web site SRAP handbook seems out of date.
Where exactly are your properties being built?I have a lot of questions to ask, do you have an email address I could send to?
Thanks
Karen
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 regardsPauljust as an update to this….. IPD and PDG are offering to buy back the property at current market value if for any reason you are refused the SRAP loan..
details can be found here
Hey Paul
I was wondering how your investments in this program is going?
KarenSounds unbelieveable however am also wondering if you've learn't anything new.
What timeframe was indicated for you to receive your incentive?
Trish
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