Skip to content
Multi-Family and Apartment Investing

User Stats

7
Posts
1
Votes
Ryan Pettit
  • Rental Property Investor
  • Tyler, TX
1
Votes |
7
Posts

Affordable Housing Investing

Ryan Pettit
  • Rental Property Investor
  • Tyler, TX
Posted Sep 13 2019, 04:59

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.

User Stats

933
Posts
491
Votes
Tj Hines
  • Specialist
  • Tampa, FL
491
Votes |
933
Posts
Tj Hines
  • Specialist
  • Tampa, FL
Replied Sep 13 2019, 09:56

@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.

User Stats

26
Posts
16
Votes
Travis Gibson
  • Rental Property Investor
  • Sacramento, CA
16
Votes |
26
Posts
Travis Gibson
  • Rental Property Investor
  • Sacramento, CA
Replied Sep 13 2019, 10:36

@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.

FlipSystem logo
FlipSystem
|
Sponsored
Learn From Our Team. Earn 100% of the Profits. Join our community of 500+ investors! Avg profit per flip: $14k, Avg effort per week: 4hrs

User Stats

51
Posts
32
Votes
Laura Janosko
  • Rental Property Investor
  • Cleveland, OH
32
Votes |
51
Posts
Laura Janosko
  • Rental Property Investor
  • Cleveland, OH
Replied Dec 31 2019, 11:27

Here are two helpful links for $ to upgrade Section 8 housing:
https://www.sapling.com/8600722/section-8-landlord-grants

https://www.thebalance.com/use-these-home-improvement-grants-to-cover-your-next-project-4584633

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.

User Stats

2,671
Posts
2,182
Votes
Patti Robertson
  • Property Manager
  • Virginia Beach, VA
2,182
Votes |
2,671
Posts
Patti Robertson
  • Property Manager
  • Virginia Beach, VA
Replied Dec 31 2019, 13:11

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.

User Stats

51
Posts
32
Votes
Laura Janosko
  • Rental Property Investor
  • Cleveland, OH
32
Votes |
51
Posts
Laura Janosko
  • Rental Property Investor
  • Cleveland, OH
Replied Jan 20 2020, 12:14

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.