Section 8 BRRRR information

Real Estate Investor · Elk City, OK · Member since 2014 · 73 posts · 27 votes

I'm looking for some advice on the BRRRR strategy for section 8 housing.. I have enough cash to buy the properties outright and for the improvements/repairs before using financing to pull the equity out and repeat..

The questions I'm seeking answers to is, what neighborhoods, is walking score important, are schools as important, & What level of updating are people in section 8 looking for?

I'm currently looking for 3+ bed 2 bath houses in non HOA neighborhoods to convert to legal 6 bedroom homes.. Anyone doing this in a 1.5 million person metro?

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Tim DelaneyPro Member

Buffalo, NY · Member since 2018 · 790 posts · 530 votes

@Matt Laird section 8 tenants want the same things any tenant wants - generally the nicest place they can afford. Listen to the podcast episodes with Dr. Joe Asamoah - he’s in a larger market but I think the same principles apply.

Podcast Guest on Show How to Buy Yourself a 6-Figure Income Stream

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Sanat Bhandari
Investor · Omaha, NE · Member since 2021 · 244 posts · 163 votes
3y
@Matt Laird Generally speaking, for section 8, you would want to focus on C+ neighborhoods where you'll get the best bang for your buck. They're not as rough as <C neighborhoods and can be had for good value
Walking score may or may not be important for the same. If it is a high walking score, you may attract tenants without access to reliable transportation but from my experience, most people in the midwestern/southern cities have access to some form of transportation. If this was in a coastal market, that may make a huge difference
Having good quality and clean housing is the primary goal of the section 8 program. From what I have seen, section 8 inspectors focus more on hazard/safety items than cosmetic issues in the property
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Andrew PostellPro Member
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
3y
@Matt Laird any reason why you are trying to focus on JUST Section 8? There's about 550,000 families that rent in Oklahoma...and only 10,000 have Section 8 vouchers. That's an awful lot of tenants you are skipping trying to focus on just one thing. Usually we focus on the property first. If the property makes sense, and a section 8 person applies - great. But if it makes sense otherwise then you have a TON more options to choose from. I hope this makes sense how I am describing it.
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Matt Laird
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Real Estate Investor · Elk City, OK · Member since 2014 · 73 posts · 27 votes
3y
Quote from @Andrew Postell:

@Matt Laird any reason why you are trying to focus on JUST Section 8? There's about 550,000 families that rent in Oklahoma...and only 10,000 have Section 8 vouchers. That's an awful lot of tenants you are skipping trying to focus on just one thing. Usually we focus on the property first. If the property makes sense, and a section 8 person applies - great. But if it makes sense otherwise then you have a TON more options to choose from. I hope this makes sense how I am describing it.
I’m looking to get the highest guaranteed rent per sq/ft.. I spoke to an agent at the Oklahoma county hud and she said they have a large waiting list of people who qualify for the 5-6 bedroom vouchers.. That’s near $2k a month in this market.. I feel I can get a $125k investment rent ready for that demographic.. I’m also looking for long term renters.. If it’s the largest house and in the safer part of town that accepts a voucher they will stay much longer in my opinion.. If they are properly screened..

I’m also slightly worried about administration enacting another a federal eviction moratorium in this coming recession..

I may be way off, but this is what I’m thinking.. I’ve had up to 16 SFH, but none Section 8..
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Tim DelaneyPro Member
Buffalo, NY · Member since 2018 · 790 posts · 530 votes
3y
@Matt Laird section 8 tenants want the same things any tenant wants - generally the nicest place they can afford. Listen to the podcast episodes with Dr. Joe Asamoah - he’s in a larger market but I think the same principles apply.
Podcast Guest on Show How to Buy Yourself a 6-Figure Income Stream
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Andrew PostellPro Member
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
3y
@Matt Laird yes, there are TONS of people on waiting lists for Section 8. Millions. The reason why there are so many is because they don't give those vouchers out very often. It sounds like you are already doing very well doing what other very successful investors do. I would say to stay on that track.
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Rhett TullisBusiness Member
Property Manager · Oklahoma City, OK · Member since 2013 · 1k+ posts · 617 votes
3y
the main process I see most folks doing in okc is buying a 3 bed 2 bath and converting the garage to another bedroom to be a 4 bed 2 bath. Section 8 is a special system here for sure. Be sure you know the ins and outs before you jump in too far. Also think through the 6 bedroom idea. While more rooms can be good and make the house earn higher rent it also generally means more folks in the house which means more opening and closing of doors, more flushing of the toilets more fingers on the cabinet doors which all equate to more wear and tear on the home. While this is not always the case it certainly lends itself to that. Also if the home is a 3 bed 2 bath and you convert to 6 bedroom without adding sq footage you are looking at very small rooms. Lots of details to think through for sure.
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