Switch Indy duplex to affordable housing tenants?

Question

Hey BP community!

We’ve got an Indianapolis C-class duplex that we successfully BRRRRed in 2020. However, tenants have not been great, basically late on rent and/or leaving repairs that eat all profits.

Appreciation would allow us to get out with a modest profit, but I’ve posed going Section 8 via the Affordable Housing website to my business partner. We’d have a subsidized tenant, so at least collecting a majority of the rent, and I understand that these tenants usually stay longer.

I know there is bureaucracy with Section 8 but can out up with that.

Thoughts from other out of state investors In Indianapolis?

Harvey Levin · Answer

I have been a section 8 landlord in indy since 1985 and managerfor others since 2011 specializing in section 8.the most houses and doubles we have had with sec 8 is over 400 at 1 time.  Over 90% of my personal portfolio is c class with  sec 8 tenants.  It can be highly profitable but making quick repairs  is the number one way to stay profitable.  Without that tenats do not stay long term ( my definition of long term is 5 plus years)

Jake Knight · Answer

Hey Daniel,

We specialize in market rate rents and don't wade in the section 8 market but having a good property management company is paramount to placing good tenants and setting the right expectations for how the rental property should be treated while the tenant is living there.  Happy to be a resource if that's helpful.

Jaron Walling · Answer

@Daniel Dixon Local investor here. Which neighborhood are you in?

If you're worried about repairs and damage sec 8 is probably not for you.

Daniel Dixon · Answer

It's in Haughville on 11th St. Good advice. Thanks! Really appreciate it.

Lorin Moore · Answer

I definitely think section 8 is a safe bet. While it can be time consuming and pricier due to the fine tooth comb the section 8 inspectors go through the home, at the end of the day you’ve put your property in impeccable state to begin with. Then you have a state representative coming in and checking on the condition of the property routinely so it’s much easier to stay up on repairs. Majority of our landlords don’t want the section 8 approach since it is so time consuming to get approved and get a tenant in however they tend to be the more long lasting tenants and then you never have to chase your money as long as you maintain the property

Jaron Walling · Answer

@Daniel Dixon If you're in Haughville it's kind of hit and miss. It's slowly improving and I suspect sec 8 would be a poor choice. If the property is close to White River Pkwy (just across the river) you'll find better tenants and higher rent. The area is starting to come up. Stringtown (near the zoo) is also revitalizing quickly in my opinion. Anything west of those areas (excluding Speedway $$$) will be D class, no new construction/flips, and I don't travel though.

Priscilla Chin · Answer

Hi Jaron, I am looking into buying for Indianapolis. Possibly for Section 8. Would you be open to connecting?

Daniel Dixon · Answer

Thanks for the vote of confidence. Appreciate it!

Daniel Dixon · Answer

@Jaron Walling It's between downtown and the Speedway. Not worried about repairs, more just collecting rent from tenants willing to live in this neighborhood.

Switch Indy duplex to affordable housing tenants?

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