Best State/City for Section 8

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Best State/City for Section 8

MARK S KINGPro Member
Investor · NC · Member since 2021 · 3 posts · 10 votes

Hello, any input on the best market for section 8? Looking for a way to analyze the highest allowance from Sec8 vs the lowest priced homes, wondering where you can get the most bang for your buck. I have heard the target is at least 400-500 per month net positive cash flow based on 20% down. Where are you seeing opportunities? Thank you!

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Arsen Atanasovski
Investor · Rochester, MI · Member since 2017 · 1k+ posts · 584 votes
3y

There are various housing committees, grants, and other organizations in and around the city of Detroit. There are many maybe 80% of them will not share much information with investors or landlords, it’s not their job and frankly that’s just extra work for them the case workers. Some of them are rockstars and have a drive in their job, those few that I know have provided me their database of open vouchers that need to be fulfilled and they are having a hard time. One of them calls me every week to get an update on my properties and whether I have any vacant so she can fill. Their rates are very reasonable 1bedroom $1000 2 bedroom $1250 3. Bedroom $1550. But the reason I’ve gotten this information is the upkeep I do with my properties and the case workers love it! They come in on the 1st inspection and it’s passed. On all my section 8 inspection I have my contractor walk with the case worker fixing, replacing or repairing anything they might have a concern about right there as the inspection is going on. If it’s an item that needs time or needs to be picked ip at the store I send the case worker my pick up order information in an hour and stating that the guys are working on it. There is one case worker that blew her mind on my process that she sat down with me to discuss their organization and how they have a tier system of helping people get a place to live, this is where I found her information alone had a database of 7000 people that had approved applications but no place to go. When digging deeper, I notice a lot of landlords would rather take cash tenants and not deal with double inspections with section 8. The way I look at it is the place has already been inspected by the city what’s the difference. There are many benefits with section 8 in order for the tenant to be placed in one of my properties they go through a process with the committee then when living in the property they need to abide by lease rules and keep the property in shape, if major damage is made or neglect to the property by the tenant they may losE their voucher from section 8, so it’s a very good idea to go this route and food for thought you always know your property is up to date safety wise and livable with annually inspections. 

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  • Arsen Atanasovski
    Investor · Rochester, MI · Member since 2017 · 1k+ posts · 584 votes
    3y

    Detroit hands down!

    1Reply
  • Nick Benjamin
    Real Estate Agent · Kansas City, MO · Member since 2022 · 27 posts · 19 votes
    3y

    KC is up there!

    0Reply
  • Sara Frank
    Realtor · Baltimore, MD · Member since 2020 · 255 posts · 182 votes
    3y

    Surprisingly, there are pockets of Washington DC that can net you significant cash flow using Section-8. I recommend looking into Dr. Joe Asamoah -- he is a prominent section 8 investor in DC. We had him as a guest on our podcast - the DC Real Estate Podcast, he was episode #10 

    5Reply
  • David Greathouse
    Real Estate Agent · Member since 2022 · 31 posts · 25 votes
    3y

    I've had some success with clients here in Cleveland

    5Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @MARK S KING:

    Hello, any input on the best market for section 8? Looking for a way to analyze the highest allowance from Sec8 vs the lowest priced homes, wondering where you can get the most bang for your buck. I have heard the target is at least 400-500 per month net positive cash flow based on 20% down. Where are you seeing opportunities? Thank you!

    WE GET 1200- 1400 A month on 3/4 br  props with all in pricing under 100k in the Cleveland markets. Heck I just got 825 for a 1 BR in East Cleveland, 
    4Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    3y

    I have three tenants on Section 8. For a 3 bed/1bath home you can easily get $1,300/mo here in Detroit. And numbers I believe are up to $1,650/mo (or something like that) if you include utilities. I know they adjusted voucher limits higher again this year and we'll be pushing for increases on ours when they come up for renewal.

    7Reply
  • Arsen Atanasovski
    Investor · Rochester, MI · Member since 2017 · 1k+ posts · 584 votes
    3y
    Quote from @Sara Frank:

    Surprisingly, there are pockets of Washington DC that can net you significant cash flow using Section-8. I recommend looking into Dr. Joe Asamoah -- he is a prominent section 8 investor in DC. We had him as a guest on our podcast - the DC Real Estate Podcast, he was episode #10 


    yea with half million dollar homes you can buy 10/15 properties in the D that will net double then DC


    0Reply
  • Sam YinPro Member
    Los Angeles, CA · Member since 2021 · 583 posts · 738 votes
    3y

    @MARK S KING

    You just need to get the section 8 payment schedule. Pretty much everywhere it good. Every area has set prices section 8 will pay for certain properties.

    A 2 bedroom in one area can command $800/month from section 8 and that same property will also command $2800/month down the road in a higher end area. It different within the county. They divide them by submarkets. It's all relative.

    For example, in just one single county of SoCal, where I primarily invest, the desert section 8 pays $827 for a studio and $1733 for a two bedroom. At the other end of the same county, section 8 pays $1925 for a studio and $3028 for a 2 bedroom. The average cost per door is $100K versus $175K. So it all relative. I'm using 2022 pricing schedule, bit I'm sure its higher now since it generally increases every year. Just get it for the area you are interested in.

    If section 8 is your play, you should take advantage and look for higher end areas so you can get the most out of more expensive properties that have more to appreciate. That's as long as you can afford to acquire it in the first place.

    The question you should ask yourself is if you want section 8 in the first place. It not for everyone. It comes with it's own challenges. Deal with enough section 8 tenants and you will find out it not as rosy as some podcasts or books claim them to be. But you do get that guaranteed rent as a trade off for your work.

    I have some section 8 tenants and other programs that are 10X tougher. I would NOT mix them with regular families as it often can create management challenges. But that is just a personal opinion based on personal experience with government tenants in California.

    Good luck.

    7Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    3y
    Quote from @MARK S KING:

    Hello, any input on the best market for section 8? Looking for a way to analyze the highest allowance from Sec8 vs the lowest priced homes, wondering where you can get the most bang for your buck. I have heard the target is at least 400-500 per month net positive cash flow based on 20% down. Where are you seeing opportunities? Thank you!


     Cleveland is pretty dope for Section 8 deals.

    1Reply
  • Scott AllenBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 449 posts · 471 votes
    3y

    @MARK S KING

    Columbus,OH is pretty dope for Section 8 deals. Cleveland is alright too

    [email protected]614-698-1227
    Reafco - Columbus, OH
    WebsiteView Page
    3Reply
  • Sanat Bhandari
    Investor · Omaha, NE · Member since 2021 · 244 posts · 163 votes
    3y

    @MARK S KING Check out Council Bluffs, IA. It's right across the river from Omaha, has the same HUD FMRs as Omaha but properties there are at least 20% cheaper

    Cash-flowing rentals is the name of the game out there so pretty sure you could do great with section 8

    1Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    @MARK S KING

    You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:

    https://www.biggerpockets.com/...
    (BP search feature can be problematic, so we’ve also added links @ our website under View Cities & Neighborhoods We Service)

    Please send us any feedback via email, as we do not use the DM feature here.

    [email protected]248-209-6824
    Logical Property Management4.9458 Reviews
    WebsiteView Page
    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    3y
    Quote from @Scott Allen:

    @MARK S KING

    Columbus,OH is pretty dope for Section 8 deals. Cleveland is alright too


     Bruh.....My dad can beat up your dad.

    6Reply
  • Arsen Atanasovski
    Investor · Rochester, MI · Member since 2017 · 1k+ posts · 584 votes
    3y

    Who’s your daddy??????

    Detroit!!!

    3Reply
  • Arsen Atanasovski
    Investor · Rochester, MI · Member since 2017 · 1k+ posts · 584 votes
    3y

    Sorry I was just thinking about the Michigan and OSU game a few months back oops! Sorry again :)

    4Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    @MARK S KING you will find nice numbers with any Class C properties

    [email protected]248-209-6824
    Logical Property Management4.9458 Reviews
    WebsiteView Page
    0Reply
  • Michael Bishay
    Member since 2020 · 41 posts · 13 votes
    3y
    Quote from @Travis Biziorek:

    I have three tenants on Section 8. For a 3 bed/1bath home you can easily get $1,300/mo here in Detroit. And numbers I believe are up to $1,650/mo (or something like that) if you include utilities. I know they adjusted voucher limits higher again this year and we'll be pushing for increases on ours when they come up for renewal.


     Would you mind sharing what parts of Detroit you invest in? Or what parts to stay away from. 

    0Reply
  • Michael Bishay
    Member since 2020 · 41 posts · 13 votes
    3y
    Quote from @Scott Allen:

    @MARK S KING

    Columbus,OH is pretty dope for Section 8 deals. Cleveland is alright too


     I would love to have a quick conversation if your ever free. I would like to learn more about Columbus OH. 

    0Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    3y
    Quote from @Michael Bishay:
    Quote from @Travis Biziorek:

    I have three tenants on Section 8. For a 3 bed/1bath home you can easily get $1,300/mo here in Detroit. And numbers I believe are up to $1,650/mo (or something like that) if you include utilities. I know they adjusted voucher limits higher again this year and we'll be pushing for increases on ours when they come up for renewal.


     Would you mind sharing what parts of Detroit you invest in? Or what parts to stay away from. 

    That's a pretty big conversation. Detroit itself is 150 sq miles. People have no concept how much ground that actually is. 
    0Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    3y
    Quote from @MARK S KING:

    Hello, any input on the best market for section 8? Looking for a way to analyze the highest allowance from Sec8 vs the lowest priced homes, wondering where you can get the most bang for your buck. I have heard the target is at least 400-500 per month net positive cash flow based on 20% down. Where are you seeing opportunities? Thank you!

    Hi Mark, Columbus Ohio is a great market for section 8 rentals. I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. Just this month, I’ve gotten under contract for my clients for multiple 20%+ cash on cash rental properties so there’s definitely tons of opportunity here. As a local investor and agent here in Columbus, let me know if you have any questions or want to connect!

    [email protected]614-300-7535
    Jimmy Lieu, Red 1 Realty4.9120 Reviews
    WebsiteView Page
    2Reply
  • David Leggett
    Real Estate Broker · Cleveland, OH · Member since 2018 · 227 posts · 133 votes
    3y
    Oh Man!  Michigan wins two years out of 20 and I can't stop hearing about it!  But I love Detroit and Michigan and want to see Detroit rebuild itself stronger than ever.  Industrial midwest cities help built this country and this economy and many got left behind after the manufacturing left and I've seen it first hand how it destroyed communities but they're resilient cities with very strong and resilient people and are excellent for Section 8 rentals.
    0Reply
  • David Leggett
    Real Estate Broker · Cleveland, OH · Member since 2018 · 227 posts · 133 votes
    3y
    My dad looked just like Chuck Norris but never learned Karate!  Can you believe that!  Man my life could have been totally different growing up in a Chuck Norris Karate household!!
    1Reply
  • Arsen Atanasovski
    Investor · Rochester, MI · Member since 2017 · 1k+ posts · 584 votes
    3y

    Let me just say there is 30,000 section 8 open contracts in the city of Detroit maybe that might turn some lightbulbs on lol

    1Reply
  • Aaron K.
    New to Real Estate · SoCal · Member since 2023 · 6 posts · 12 votes
    3y
    Quote from @Arsen Atanasovski:

    Let me just say there is 30,000 section 8 open contracts in the city of Detroit maybe that might turn some lightbulbs on lol


     Hey Arsen can you elaborate more on what this means? Do you mean there are currently 30,000 Section 8 voucher holders with no where to go due to a lack of section 8 housing or something else?

    7Reply
  • Arsen Atanasovski
    Investor · Rochester, MI · Member since 2017 · 1k+ posts · 584 votes
    3y

    Absolutely 

    0Reply
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