Persistent Wins the Race

Multifamily Property Review

Challenge

Housing and Urban Development (HUD) properties are subsidized by the U.S. government and require that both renters and owners meet certain criteria. While the buyers for two HUD-certified apartment complexes in Booneville, Arkansas, Initially reached out to the listing agent about purchasing the properties, they had the foresight to realize that having their own real estate agent to represent them - someone who had experience with HUD properties and understood the process - would be much more advantageous.

Action

The buyers contacted Realtor Cassie Wells. After speaking to them and discussing the property, Wells wrote and submitted the initial offer - which was immediately accepted!

But the next hurdle to be met was the complicated qualification process, which included the appraisal of the properties. Because rent tends to be higher for HUD properties, using an income approach to the appraisal would have resulted in a higher value. However, the appraiser used market rents in the analysis, as opposed to actual rents, and the property did not appraise for the selling price.

Wells suggested that the buyers negotiate with the lender to accept a 15% down payment rather than 20%, to help offset the difference between the sales price and the appraisal.

The entire qualification process tool 10 months. During that time, interest rates increased seven times. Despite this, Wells helped the buyers convince their lender to keep the mortgage rate as it was originally quoted.

Result

Thanks to Wells' experience, insight, and determination, a long, daunting process lead to success. The deal for the property closed. The buyers, who already had an established portfolio of other HUD properties, were excited to have their first investment property in the state of Arkansas. The seller was able to move the proceeds of the sale into other new investment properties. It was truly a win-win situation that never would ave come about, had it not been for he persistence of Cassie Wells.