Free Government Money- Part 2
Let the Government Help You to Make Money
Of the many different types of financial assistance available to us, I especially like the Rental Rehab Loan Program. Here how it worked for me. Several years ago, I purchased a four unit building that had my friends wondering if I had lost my mind. The units were one bedroom, one bathroom each, and were inhabited by four elderly ladies who had been living there from 21 to 24 years.
The problem was that their rent had never been raised! The total income from that building was around 0 per month! FOR THE ENTIRE BUILDING!! No, I’m not crazy. I did my homework and I found a Government program called the Rental Rehab Loan Program. The program required that I borrow at least 00 to be used for upgrades in the building. The benefit to me was that I received the money at a very low interest rate, and (much more importantly) the tenants would qualify to go on the Section 8 Government Subsidy Program!
A Great Win-Win-Win Deal
All four of my elderly tenants were existing on a very meager social security income. They lived in the fear that whoever buys the building will want to raise the rent. They knew that the market rent was around 5 per month, and they knew that they could not afford it. They all thought that they’d end up homeless on the streets. They had no idea that these wonderful Government programs existed. I borrowing as close to 00 as I could (I wanted to maximize my cash flow), and started the work on the property.
When it was all over, I ended up with a really nice building with 4 wonderful senior citizens as tenants. I increased the income from the building from 0 per month to around 00 per month thanks to my partner, Uncle Sam.
Everyone Was a Winner
Everyone won in this deal. The Government won because they were able to get the money out into the community where it could do some good. The tenants won because they were able to stay in the homes they’ve been in for over 20 years. They actually ended up paying less toward their rent because of the Section 8 Subsidy. I obviously won because I was able to take a non-performing piece of property and turn it into a success. Thank you, Uncle Sam!
Do I Need To Have Good Credit?
That depends on which of the many programs you’re applying for. There are some programs that are project based. In other words, if your project fits a certain category, the project itself can qualify for the money. It could be the real estate, the area, the tenants, or the business that qualifies, not you personally. If it’s a program that requires you to personally qualify, then your credit can become a factor. But understand this. There are programs that are designed for people with bad credit. There are even programs that require you to be turned down by a bank before you can qualify for the money!
Stay tuned. In the upcoming “Part 3”, I’ll discuss ways to go about getting this free money and resources that can help.
I invite you to learn more about Abandoned Properties and get a FREE Real Estate Investing audio CD titled “How To Get Rich In A Slow Real Estate Market” by going to http://www.reggiebrooks.com