I am under contract on a 16 unit apartment building in a lower class neighborhood. All units are identical (2/1 with 800sf). They are renting for $500 which is under market.
I’ve learned that there is a HUGE demand for affordable housing in this market and there are only a handful of properties accepting section 8 tenants. There is a 6-12 month wait at both properties in close proximity.
Also - section 8 vouchers would allow for slightly higher gross rents and consistent occupancy.
I’m trying to connect with other multi family investors that have affordable housing units and accept vouchers. Also - wondering if there are grant programs that could offset the cost of upgrading certain units to meet the standards set forth by the Govt Agency in charge of section 8.
Thanks in advance.
@Ryan Pettit I know quite a few guys that are section 8 landlords and then got out of the section 8 rental business because of the people that are living in your units. The guaranteed rent payment is cool, so is the premium that you get. That premium is usually eaten up with maintenance expenses due to the careless negligence of caring for the property as if it is their own. You also may have quite a bit of turnover as well. Not trying to scare you, but something to think about.
@Ryan Pettit I have had Section 8 tenants in some of my SFH for years and they have been some of the "best" and "worst" tenants I have ever had. The thing you need to remember is just because a portion of their rent guaranteed does not mean that the tenants should not be screened with the same scrutiny as a non-Section 8 tenant. One thing I do for the SFH I still personally manage is to swing by where the applicant lives with super short notice(under the pretext of a misplaced credit application). It gives you a chance to see how the applicant treats their current rental.
Here are two helpful links for $ to upgrade Section 8 housing:
Home Depot, the Federal Home Loan Bank and the Weatherization Assistance Program only give funding to non profit entities, but it looks like individuals and for profit entities qualify for HUD's Green Retrofit Program. You can also call your local housing authority to see if there are any grants or low interest loans that aren't published online.
Looks to me like the HUD Green Retrofit program ended in 2012. Are you seeing something different @Laura Janosko ? Would love to take advantage of it if it still exists.
Good catch @Patti Robertson I should have checked the date before posting. The only energy efficiency financing on a national scale is Fannie Mae's Go Green loan program (https://multifamily.fanniemae.com/sites/g/files/koqyhd161/files/2019-10/go-green-flowchart.pdf). Additionally, this website https://www.dsireusa.org/ allows you to search for rebates by state.