Indy case study, manufactured home BRRRR with Section 8

[Frank Pyle]

We picked up a three bed two bath manufactured home on the west side of Indianapolis in the fourth quarter of 2024 for 90k cash, then put about 50k into the remodel to get it truly rent ready. We listed it as an affordable rental and by February it was placed with a voucher tenant at 2200 per month. Tenant portion is 853 and the housing authority covers the rest. Key detail here is the voucher rent includes utilities, so we pay the utility bills as the landlord.

After stabilization we refinanced 120k. Taxes and insurance included, our all in monthly payment is 757. On paper the spread looks great, but the real lessons were operational, not the rate.

Lesson one was utilities. We had a couple hiccups where a utility account was not set up or transferred correctly from a prior owner, so we got hit with catch up payments that were bigger than the normal monthly utility spend. It did not break the deal, but it reinforced the goal of setting the property up to run fully independent without surprise injections. If utilities are on you, treat utility setup like a closing item, confirm every account is in the right name, verify billing dates, and keep real reserves in the property account for the random stuff that always pops up.

Lesson two was the voucher inspection process. Section 8 and other voucher programs have an inspection the property has to pass before the tenant can move in. That means our contractor cannot just be good at cosmetic upgrades, they have to understand what the inspector is going to flag. Our contractor said they had Section 8 experience and overall it was a good experience, but a few items still got missed on the front end. Things like a step down issue at a rear sliding door, additional handrails, and a couple small electrical items that the inspector caught. Nothing massive, but it created extra trips, extra time, and a little extra money.

Big takeaway for us is if we are rehabbing with the plan to place a voucher tenant, we want the contractor quoting it all in from day one. Not just pretty and rent ready, but voucher ready. Ask them straight up what they know the inspection is going to look for, and make sure their scope includes the common trip hazards and safety items so we are not doing little change orders at the finish line.

Overall this one has been solid, payments have been on time, no major tenant issues so far, and ROI is positive. If you are doing Section 8, what inspection items do you see missed most often on rehabs?