New to Real Estate · Member since 2021 · 1 post · 0 votes
Hello! I am in the process of buying my first rental, a 4-plex. One of the tenants is under HUD. I've been told I need to apply as a landlord through HUD. Can this be done online or will I need to go in person? What documents will I need to present? Thank you!
Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
3y
There are a couple of important points to be aware of when buying a property with a SEC 8 tenant in place.
1) Have your closing attorney prepare an "assignment of lease" document with your closing package that is signed by the seller, assigning the rights and responsibilities of the current lease to your buying entity. This will make your transition to the point of being able to receive the earned rent faster. If you don't do this, you will have to submit all new paperwork, not just amend for a new payee.
2) Right after the last payment will be received by the seller, the seller or the seller's PM should notify the Housing Authority of the pending sale so the payments are "put on abatement". This just means they are put on hold until the property changes hands and you can submit the info as the new payee.
3) Contact the Housing Authority to ask for new payee paperwork. You can't submit this until you have closed. Attach the Closing Document to the new payee paperwork when you submit it to the HA, because the change of ownership won't show up in your city/county tax record fast enough for them to verify it that way.
4) Ask the case worker what the tenant's rent portion is. While it will take a payment cycle (they pay on the 1st and 15th) to get the SEC 8 portion of rent, the tenant should start paying their portion of rent to your or your PM on the next rent due date after the sale.