Hey everyone, quick couple of questions.
I'm currently looking to buy my first property here in Baltimore. The property that I am looking at has a tenant already in place. They are section 8 tenants. If I was to purchase this property, I'm curious as to the process I would have to go through seeing I am not currently registered and this will be my first property.
- 1: I understand that I would need to get registered for section 8. Would I have to wait until the house is under contract to register? How long is that process typically?
- 2: What other things do I need to know while transitioning ownership with a section 8 tenant already in place?
- 3: What are some of your experiences taking over a section 8 tenant for the first time?
I look forward to hearing from you, and thanks in advance for all of your help!
@Dominique Ellis , I own a portfolio of Section8 properties and teach other landlords locally to succeed in the niche. I've bought a lot of occupied properties w Section 8 tenants. You'll need to wait until after the sale is final. Then immediately contact the PHA that the tenant's voucher is through (the seller can tell you this if you have multiple PHAs like we do here) or get on their website and find out what you need to do to change the ownership with the PHA.
My experience is that you're better off to try to make the sale happen right after the first of the month so that you can get that month's rents through closing proceeds, and you have a lot of time to get the new paperwork processed at the PHA.
I have had them pay the prior owner before (even though I had sent in the paperwork and got confirmation that it was all set up correctly). It took a while to fix but they eventually paid me for missed month.
Make sure you ask the current owner for a rent ledger (one for the tenant paid portion and one for the HAP portion) and ask for the most recent document laying out how much of the rent the tenant pays vs. how much the HA pays. It's called a Notice of Change here, probably there too but not sure.
Taking over Section 8 tenants is the same as market tenants mostly other than above. Make sure you introduce yourself in person, give them info on how to contact you and how to pay you and get updated information from them. Good luck!
@Jennifer Donley Thank you for all the great information. That helped me a ton!
@Dominique Ellis taking over a property with a section-8 tenant in Baltimore isn't difficult. Just make sure you have all your paperwork together (LLC docs, bank info, etc). You have to register as a new owner. Make sure to prorate any rent with the seller if you close mid-month so you can get credited on the HUD. Also, get something signed saying that the seller has to send the direct deposit from HABC to your address if the rents deposits don't switch over to you in time before the 1st of the month. Right now the section-8 office is closed due to COVID and things can take longer.
Some great info above. @Dominique Ellis will you be utilizing a property manager? I had many of the same Qs but my manager handled everything from the paperwork, transferring deposits etc. If you are using an experienced manager, the transition should be painless. Short delay for rents initially but now they are in like clockwork.