I am thinking to get into NRAS investment. The cashflow is too attractive to be ignored although I will need to get a few to obtain a 'sizeable' cashflow eg 4-5. From euro73 posts previously, the projection is approx. $100k / per property during the 10 year period from the government incentive
I have done a few pros and cons and would like to see if anyone else has anything to contribute
Pros:
- Cashflow. Assuming $100k for 10 year for each property, owning 5 = $500k net ~ approx. $800k-$900k gross with lower risk/less hassle compared to doing developments
- Brand new property, should require less maintenance
Cons:
- Delays (potential) in receiving state and federal incentives
- May be lacking in CG for investment in brand new apartments/units
- NRAS agreement is between the government and NRAS consortium, and therefore individual investor is at 'mercy' with the NRAS consortium. Also, if it hits the fan then may involve significant legal costs (although this has never happened previously)
- Risk of government withdrawing the incentive (low risk, unlikely)
- Valuation risk (easily mitigated by requesting valuation)
- Unable to value add further
As you can see, the cons list is longer however I would be comfortable with the cashflow in mind. Any other risk which I may have left out? Would also like to get opinions from SS members who have owned NRAS properties for a number of years
I have done a few pros and cons and would like to see if anyone else has anything to contribute
Pros:
- Cashflow. Assuming $100k for 10 year for each property, owning 5 = $500k net ~ approx. $800k-$900k gross with lower risk/less hassle compared to doing developments
- Brand new property, should require less maintenance
Cons:
- Delays (potential) in receiving state and federal incentives
- May be lacking in CG for investment in brand new apartments/units
- NRAS agreement is between the government and NRAS consortium, and therefore individual investor is at 'mercy' with the NRAS consortium. Also, if it hits the fan then may involve significant legal costs (although this has never happened previously)
- Risk of government withdrawing the incentive (low risk, unlikely)
- Valuation risk (easily mitigated by requesting valuation)
- Unable to value add further
As you can see, the cons list is longer however I would be comfortable with the cashflow in mind. Any other risk which I may have left out? Would also like to get opinions from SS members who have owned NRAS properties for a number of years