Who should you believe about the Small Rental Assistance Program (SRAP) ?
May 21, 2008
I like to stay abreast of any breaking news stories related to the GO Zone, and while doing my daily research today I read an article in a local Mississippi paper titled Bayside Bubble by J.R. Welsh.
I was a little surprised when I read article, because there were some facts that were incorrect and could mislead anyone who hasn’t spent the time that I have researching the Mississippi Small Rental Assistance Program and the 50% GO Zone Bonus Depreciation.
The meat of the article is about out-of-state investors that are in limbo in regards to qualifying for the program due to elevation requirements. This is definitely true. There are a number of GO Zone properties that are not going to qualify for the program because they are at a low elevation such as 13 feet. What was wrong with this article however was that it made it seem as if they will not qualify because of changes made by the MDA. New construction, which is option D for the program, has always been built to the D Firm elevation maps. This is something that few people know. D Firm elevation maps actually favor investors majority of the time, as they are less stringent that the FEMA ABFE maps.
Bayside Park is a scattered lot development that has various heights. Some of our lot surveys have come back as low as 13 feet, or as high as 17 feet. There are also different zones to the maps. To view the D Firm evaluation maps for requirements visit http://geology.deq.ms.gov/floodmaps/status.aspx.
These investors are in an unfortunate situation, because it was the developer/agent that led them not to qualify, not the Mississippi Development Authority. I do think that the program could have been handled better initially, but since Horne LLP and Waggoner engineering have taken over in January, things have been much better. Both firms are very cooperative, and even return my phone calls to make sure that all of my questions have been answered for our investors.
The GO Zone is one of the best opportunities out there for real estate investors and I think it is a shame that the author didn’t really do his homework, but instead wrote a sensationalized article. It is important that investors conduct their own due diligence and use representation. My advice to any investor is GET IT IN WRITING. All of our contracts with developers have 3 important things. 1) This property will be built the Small Rental Assistance Program elevation requirements and will meet or exceed the D Firm elevation maps. 2) The developer will contribute $4,000 towards closing costs to cover the construction interest. 3) The developer will provide a 2-10 warranty for this property to ensure the quality of workmanship.
My personal feeling is that the media should be writing articles about how the state has had these federally issued funds for 2 years (if not more) and not even a penny has been distributed yet. People have been living in glorified tents (FEMA trailers) for coming on 3 years. Has anyone seen an article written about that?
If you have questions about the Mississippi Small Rental Assistance Program (SRAP) or the GO Zone and you want real answers you can contact me at 561-404-7375.
Skyler More - GO Zone Gateway
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