Anybody familiar with this? The fair market rent in my area is 1250 for a 3 bedroom. There are a lot of houses in my area for 25-40k. What's wrong? No way I can get 50% ROI That easy. Even if it's design with the shitty gov.
Section 8 real estate.
do u live in da bermuda tri angel
Are these cheapo houses occupied dumbass?
No they arnt. Dumbass
I've done section 8 for many years. If you screen well, you'll be ok. That's the secret.
Is it really that profitable? Or is there some hidden shit I'm not seeing
Just don't accept black people and you'll be fine.
how does one screen well.
It can be. I was getting 30% coc. But the biggest downside is damage to the property.
Oh another thing, it's something called respect. If you get a good tenant, give respect and get respect. These people are used to being kicked around, so be polite, fix things promptly, etc and you will have very loyal renters. I've had renters call up years later asking if I had any more vacancies.
Look on biggerpockets.com for details on that. There are tricks to it. But it's also experience.
I am really interested in Section 8 housing.
I see cheap apartment building all the time around me being sold by old people who want to retire.
They are usually run down, but I have contacts that work in plumbing, electrical, and other contractors to hire.
Would it be possible to obtain an apartment building on credit, while being able to front the repair costs or would creditors blow me off?
Assuming I got the loan with a $130K+ cash balance on my bank account.
Yes, it's possible to get a mortgage on 5+ door properties, but commercial loans are very different than the standard fixed 30 that residential investors enjoy. I don't have any direct experience there
If this is your first time doing REI, I wouldn't go for something that big, though. Either start with a sfh or 2-4 unit place and see if you like it.
These loans won't front you the cash for renos, though. For this, my fave strategy is to open a zero percent credit card at lowes or home depot and do one big purchase for everything. Labor needs to be cash, though.
OP here thanks for all the replies guys. I'm for sure going for it in the next couple months.
Maintenance sucks up a ton of your income. Property taxes do as well. There's simple things like routinely topping off the coolant in the AC units, and there's major things like cleaning up from broken pipes and water damage. Tenants may cause damage, and stuff may just randomly break. There's also major expenses like putting a new roof on the unit every so often.
You need to factor in vacancy rates. You need to factor in legal costs when evicting people. You need to factor in the time costs of managing properties, or the expense costs of hiring a property manager.
Section 8 tenants are notorious for trashing places, mainly because they've never been taught how to be responsible, which means they don't know how to take care of things, and/or leads to serious entitlement issues. You need to screen all prospective tenants extremely thoroughly or you will get seriously burned, and quickly. You're going to eventually get burned if you have more than a few units and are in the business for long. Set aside a rainy day fund.
Get a lawyer to give you some solid contracts. Track down an eviction attorney now so you aren't in a panic when you need to get rid of someone.
As a landlord, this video irritates me. This guy majorly fucked up nearly every step of the way, and the property damage he suffered is relatively minor compared to some of the truly bad shit I've seen. If something like this was enough to break his financials, he really shouldn't have been in business.
He's crying about everything, when the harsh reality is, he got incredibly lucky, and got off quite lightly.
Well, I don't care if I like the work or not. I'm purely doing this for money.
I will do the due diligence before I buy though. I have experience working with tenants in a distribution warehouse, but the prices are so inflated that a recession would send these companies spinning into oblivion.
I do like the idea of Section 8 though, and believe that it is relatively safe to invest in such a thing if Hillary becomes President.
Some of these properties are very cheap and hard to manage so even if I don't make money, ideally dealing with niggers to build some equity would be fine with me.
advice I've seen here is only do it with buildings made of cinder blocks, anything else is too easy to wreck
came here to post this
vinyl composites for the flooring is also a good idea.
I understand taxes, management, and all that. Pretty much all the cash I make off the house will just go right back into paying it off. Just SUPRISED me that it would generate 15k in rent.
Revenue is an entirely separate world from the profit. Rental properties are high revenue, but so are the expenses. Short term, you can often ignore a lot of maintenance, and instead of not banking your cash, you can pay off other things. As long as you know that you WILL have to eat those costs eventually if you want to keep the property habitable.
Example. Say a new roof costs 10,000 and you know that in 10-15 years you will need to replace it. You can either put aside the money incrementally, or pull it from somewhere else all at once around the time you need it. Maybe that just means the property isn't profitable at all for a year or two leading up to the roof. Maybe it means you need to run in the negative for a bit. It doesn't matter if the funds are from the property or not, as long as they are available. There isn't an 'ideal' answer here. It's mostly a question of what's the cost/benefit ratio. Assuming you will be profitable in the future can be better since it gives you better short term liquidity, but it is riskier.
For your first couple of properties, I'd play it on the extremely safe side. No sense in risking things you aren't familiar with. The last thing you want is to get blindsided by something that you didn't see coming, and until you get familiar with stuff, that is a strong possibility. Maybe it's a tenant using a fake identity that you didn't catch. Maybe it's a glaring maintenance issues that your inspection missed. Maybe it's just plain old bad luck and the property ends up with lots of problems.
Thanks for the info man. Writing on this shit down literally
This guy's advice generally isn't entirely wrong, but it's often misleading, or not applicable outside of certain markets. He constantly tries to peddle his mentor service. That's where most of his money is coming from.
Take anything he says with large quantities of salt.
good to know, m8, ive been learning most of my shit from him. got any other good resources that are more reliable?
implying government officials will leave their car to check a niggerville house
hahahahhhaah this is why its profitable m8
They do when they can levy severe fines against you for not providing a 'habitable' home.
Never mind that the section 8 standards are frequently above what they are for general renters, the silver spoon sucking inspectors actively look for even the most minor shit to justify their existence. I've had inspections fail because I didn't have blinds up... blinds that the tenant fucking took down. I've had inspections fail, then said I've fixed the issue, having done nothing, then had them pass.. with the same inspector. That's a routine occurrence.
Hell, I've won a legal battle because an inspector was trying to extort bribes from my property managers. Dipshit was dumb enough to do it on camera.
You can make a profit with section 8, but it requires serious care and caution if you want to continue to exist long term. The upside is that the government will pay their portion of the rent on time like clockwork. Just don't ever expect to get any compensation beyond that.
When you sell your soul, be willing to read the fine print.
Do not rent anything without one, It's your only leverage keeping asshole tenants from trashing the place.