Additional Go Zone Incentive

I recently returned from my trip from the Mississippi Gulf Coast and the red hot go-zone districts. Each and every time I go there, it appals me on how much rental housing is actually needed. Thousands of FEMA trailers still exist. Families are still without homes, workers without a place to work from home, and the overall population stranded to the very little affordable housing that is on inventory. Casinos are great for the economy and great for vacation buyers, second home buyers, but the one thing being overlooked is affordable housing. My firm is owned by a very large construction direct lender. We utilize our resources to pull different reports and organize meetings with government officials to find out if it is in fact a good place to "invest in real estate". For those that are drooling over go-zone incentives that cannot qualify, I have a possible solution for you. If you DO qualify for go-zone, excuse me for saying but you would be completely foolish not to buy at least a few preconstruction homes. According to government officials, the state has signed off on a new incentive that is just pending HUD approval. Now don't kill me if this does not transpire, but I was told there is a 99% chance HUD would approve by early next week. Here's how it works. Instead of the government spending billions on rebuilding with their own money, they are offering investors a government grant if they use their NEW home for a HUD tenant (lower income). As long as your home abides by certain parameters, a 3 bedroom home investor will get a check from the government for $36,500 as soon as their preconstruction home is issued a certificate of occupancy. Now here's the deal. For one, you must hold the rental for 5 years..For HUD housing your monthly rent is capped at about $750 per month. If you have good financing, you can have a monthly debt service of mortgage, taxes, insurance, and property management of $1100. So if you rent to HUD, your negative cash flow is $350 per month, $4200 per year, and $21,000 amortized over 5 years. You do the math...You are getting an UP FRONT grant for $36,500, which is all yours. Your negative cash flow is $21,000. Thank you U.S Government!! On top of expected appreciation, you walk away with an additional $15,000 in excess cash from the grant. If you are smart and refinance your home a couple of times during ownership your negative cash flow of $21,000 can be substantially diminished and your excess cash will be greater. It is incredibly hard to get this approval for a modular home unless Fannie Mae approves it as a house, and not a "mobile home". There are certain restrictions and guidelines that must be followed to apply for this. A lot of builders models does not meet this criteria.
So lets' look at it this way....You buy a 3 bed 2 bath house for about $135,000 in preconstruction stage. Your annual appreciation of say 5% to say the least respectively over 5 years...So 25% appreciation in 5 years. Your home is now valued at $168,750. PLUS your additional $15,500 in excess cash. That's a $49,250 profit margin. Well for those of you that can deduct 50% depreciation after the first year of ownership, you can also deduct almost $60,000 off of your annual income taxes. My friends father works for the US Attorney Office...In the accounting department nonetheless. He said timing is NOW. Financial planners and most CPA's don't even know about this at the moment. Go-Zone real estate can be beneficial in numerous ways in addition to the tax writeoff. Once again, nothing personal, but investors would be foolish not to take advantage of this...for their own financial portfolios.