Is $23k Liquid Reasonable to Start Section 8 Investing in OH?

Property Manager · Seattle, WA · Member since 2024 · 14 posts · 14 votes

Hi All!
This will be my first investment property. I currently live in Washington State, and am looking to invest in OH, providing housing for Section 8. I’m a full time property manager in my 9 to 5 and manage 138 doors. I’m wondering if $23k of my own liquidated funds is reasonable to start looking for an investment property? Any thoughts and comments welcome as I am very new and open to learning from seasoned investors. Thank you all! 🙏🏼

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Drew SygitBusiness Member

Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes

@Guenevere F. you're going to need 20-25% down to get a mortgage.

If you target $100k, that won't leave you any funds for closing cost, maintenance or emergency reserves.

You could try targeting around $80k, but the $16k-$20k down payment would still not leave you with enough.

If you buy under $80k, you're probably buying such a low-end property that it is unlikely to meet your performance expectations.

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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
1y
Keep in mind that if you have 23k liquid, you really have 8k to use as a downpayment because you should always have 15k in reserves, maybe 10k if it's a condo so you have 13k.
What led you to doing out-of-state Section 8? Your property management experience will help, but getting property management on a one-off Section 8 out-of-state will be tough? It's not a great pickup for a property management company as you know.
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
1y
@Guenevere F. you're going to need 20-25% down to get a mortgage.
If you target $100k, that won't leave you any funds for closing cost, maintenance or emergency reserves.
You could try targeting around $80k, but the $16k-$20k down payment would still not leave you with enough.
If you buy under $80k, you're probably buying such a low-end property that it is unlikely to meet your performance expectations.
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Danny Gonzalez
Real Estate Broker · Member since 2024 · 134 posts · 62 votes
1y
@Guenevere F. $23K isn’t a huge amount of capital in today’s high-interest-rate market, but it’s definitely a starting point. If I were in your shoes, I’d consider a few key factors before diving in:

1. Risk Tolerance:

Ask yourself, “If the worst-case scenario happened and I lost this money, could I recover?” If this is your entire savings, it might be worth waiting and building up a larger safety net.

2. Savings Potential:

How quickly can you add to your savings? If you’re able to save another $20K within 6-12 months, waiting could open up more opportunities and give you more flexibility in your investment choices.

If I were young, had $23K, and believed I could rebuild that savings account, I'd seriously consider making the jump. Things will never feel perfect, and the process will always feel a little scary. When I started, I used a $64K HELOC, and today, I've grown it into a $3,000,000+ portfolio.

That being said, BE EXTREMELY PICKY with your first property. You don’t have a lot of room for error with $23K. Your first deal will set the tone for your investing journey, so:

• Make sure you’re getting good guidance.

• Ensure you have a vetted and trustworthy team.

• Run your numbers conservatively and stress-test your investment.

Lastly, I’d reconsider Section 8 (S8) for your first deal. While S8 can be appealing for its steady payments, in my experience, the returns often aren’t worth the effort, especially for newer investors. Instead, focus on value-add properties. These allow you to:

1. Force Appreciation: Actively increase the property’s value through strategic renovations.

2. Leverage Equity: Either refinance or flip the property to build more liquidity for your next deal.

If you’re interested in chatting more about strategy or need guidance, feel free to shoot me a DM. I’d be glad to help you get started on the right path.

0 Reply
Caleb Brown
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
1y
I would save up more. Is it enough? Probably but it gives you zero cushion which you'll need on a Section 8 property
0 Reply
Jaycee GreenePro Member
Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
1y
Quote from @Guenevere F.:

Hi All!
This will be my first investment property. I currently live in Washington State, and am looking to invest in OH, providing housing for Section 8. I’m a full time property manager in my 9 to 5 and manage 138 doors. I’m wondering if $23k of my own liquidated funds is reasonable to start looking for an investment property? Any thoughts and comments welcome as I am very new and open to learning from seasoned investors. Thank you all! 🙏🏼

Hey @Guenevere F. I would generally agree with the other posts from @Jonathan Greene, @Drew Sygit, and @Danny Gonzalez, and @Caleb Brown, but something I think would be helpful for you would be to share the profile of a type of property, price point, and the amount of rehab you're willing to do (given your mention of S8 properties) that you are interested in acquiring. A specific property you find online would be even better. Then the community can give you some more constructive comments you can take away and set some realistic goals for yourself.

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1 Reply
Aristotle Kumpis
Specialist · Long Beach, CA · Member since 2011 · 888 posts · 399 votes
1y
No, it will not be enough capital. If you are trying to flip, you will need around $30K to purchase. And then another $30K-$40K for renovations. If you want to buy and hold, you will need at least $35K-$40K for the down payment. You also need to have reserves in case something comes up.
0 Reply
Pete KrusinskiBusiness Member
Real Estate Agent · Cleveland · Member since 2024 · 18 posts · 7 votes
1y
Hi Guenevere,
With a budget of $23,000, it seems like multifamily might be off the table for now. It's possible to consider a single-family investment, but even then, it would be quite tight accounting for the down payment, closing costs, insurance, etc. I'd recommend holding off until you've built up more funds. It's important not to strech yourself too thin financially, especially with your first investment. I don't want to be discourage you; I just want to ensure you're in the best position to succeed when you do make that leap.
0 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
1y
Quote from @Guenevere F.:

Hi All!
This will be my first investment property. I currently live in Washington State, and am looking to invest in OH, providing housing for Section 8. I’m a full time property manager in my 9 to 5 and manage 138 doors. I’m wondering if $23k of my own liquidated funds is reasonable to start looking for an investment property? Any thoughts and comments welcome as I am very new and open to learning from seasoned investors. Thank you all! 🙏🏼

You can pickup a Section 8 house in Cleveland using your money as the down payment. Maybe a duplex if you're lucky, but definitely a SFR.
1 Reply
Guenevere F.
OP
Property Manager · Seattle, WA · Member since 2024 · 14 posts · 14 votes
1y
Quote from @Jonathan Greene:

Keep in mind that if you have 23k liquid, you really have 8k to use as a downpayment because you should always have 15k in reserves, maybe 10k if it's a condo so you have 13k.
What led you to doing out-of-state Section 8? Your property management experience will help, but getting property management on a one-off Section 8 out-of-state will be tough? It's not a great pickup for a property management company as you know.
I really appreciate the response! I decided on out of state because the housing market in Washington state, where I live, is just too much for me to even get my foot in the door. Maybe if I built a portfolio and had more funds to work with I could stay in state. When it comes to section 8, I’m not married to this being my only option. It just seemed like a good strategy since these were government backed rental payments. 😁
0 Reply
Guenevere F.
OP
Property Manager · Seattle, WA · Member since 2024 · 14 posts · 14 votes
1y
Quote from @Drew Sygit:

@Guenevere F. you're going to need 20-25% down to get a mortgage.
If you target $100k, that won't leave you any funds for closing cost, maintenance or emergency reserves.
You could try targeting around $80k, but the $16k-$20k down payment would still not leave you with enough.
If you buy under $80k, you're probably buying such a low-end property that it is unlikely to meet your performance expectations.
I really appreciate you taking the time to respond and sharing your knowledge with me. Thank you 😊
0 Reply
Guenevere F.
OP
Property Manager · Seattle, WA · Member since 2024 · 14 posts · 14 votes
1y
Quote from @Danny Gonzalez:

@Guenevere F. $23K isn’t a huge amount of capital in today’s high-interest-rate market, but it’s definitely a starting point. If I were in your shoes, I’d consider a few key factors before diving in:

1. Risk Tolerance:

Ask yourself, “If the worst-case scenario happened and I lost this money, could I recover?” If this is your entire savings, it might be worth waiting and building up a larger safety net.

2. Savings Potential:

How quickly can you add to your savings? If you’re able to save another $20K within 6-12 months, waiting could open up more opportunities and give you more flexibility in your investment choices.

If I were young, had $23K, and believed I could rebuild that savings account, I'd seriously consider making the jump. Things will never feel perfect, and the process will always feel a little scary. When I started, I used a $64K HELOC, and today, I've grown it into a $3,000,000+ portfolio.

That being said, BE EXTREMELY PICKY with your first property. You don’t have a lot of room for error with $23K. Your first deal will set the tone for your investing journey, so:

• Make sure you’re getting good guidance.

• Ensure you have a vetted and trustworthy team.

• Run your numbers conservatively and stress-test your investment.

Lastly, I’d reconsider Section 8 (S8) for your first deal. While S8 can be appealing for its steady payments, in my experience, the returns often aren’t worth the effort, especially for newer investors. Instead, focus on value-add properties. These allow you to:

1. Force Appreciation: Actively increase the property’s value through strategic renovations.

2. Leverage Equity: Either refinance or flip the property to build more liquidity for your next deal.

If you’re interested in chatting more about strategy or need guidance, feel free to shoot me a DM. I’d be glad to help you get started on the right path.

@Danny Gonzalez thank you for taking the time to respond to my post. You have definitely built an impressive portfolio. Managing 138 doors as a property manager in my 9 to 5, I can say, I have a lot more paperwork and hoops to jump through to get a S8 tenant approved. I just recently decided investing in real estate is what I want to do to set myself up and in this past month I have purchased books and just consume myself with learning what I can about investing. I can add about $1000 a month to my savings and whatever bonuses I receive to it as well. I agree with you, that for my first property, I should be picky and make sure I do it correctly. You gave me such great advice a lot to consider. If the offer is still on the table, I would love to DM you. Thank you! 😊

0 Reply
Guenevere F.
OP
Property Manager · Seattle, WA · Member since 2024 · 14 posts · 14 votes
1y
Quote from @Caleb Brown:

I would save up more. Is it enough? Probably but it gives you zero cushion which you'll need on a Section 8 property

Thank you @Caleb Brown for taking the time to respond to my post 🙏🏼 I think it’s in my best interest to continue to save and just keep consuming more knowledge in real estate investing. I want to do as much as I can to get it right on the first property.
0 Reply
Guenevere F.
OP
Property Manager · Seattle, WA · Member since 2024 · 14 posts · 14 votes
1y
Quote from @Jaycee Greene:

Quote from @Guenevere F.:

Hi All!
This will be my first investment property. I currently live in Washington State, and am looking to invest in OH, providing housing for Section 8. I’m a full time property manager in my 9 to 5 and manage 138 doors. I’m wondering if $23k of my own liquidated funds is reasonable to start looking for an investment property? Any thoughts and comments welcome as I am very new and open to learning from seasoned investors. Thank you all! 🙏🏼

Hey @Guenevere F. I would generally agree with the other posts from @Jonathan Greene, @Drew Sygit, and @Danny Gonzalez, and @Caleb Brown, but something I think would be helpful for you would be to share the profile of a type of property, price point, and the amount of rehab you're willing to do (given your mention of S8 properties) that you are interested in acquiring. A specific property you find online would be even better. Then the community can give you some more constructive comments you can take away and set some realistic goals for yourself.

Thank you Jaycee for taking the time to respond to my post. I don’t have a property in mind. I’ve been interested in many of them. I’ve looked into doing a hard money loan to rehab a property. I’ve been quoted by a lender for a DSCR loan as well as a Hard Money loan. I’m at 20-25% down. I really do like the thought of finding a property to rehab and force appreciation then refi to pay the Hard Money off. It may be best for me to keep learning and saving! 😁

0 Reply
Guenevere F.
OP
Property Manager · Seattle, WA · Member since 2024 · 14 posts · 14 votes
1y
Quote from @Aristotle Kumpis:

No, it will not be enough capital. If you are trying to flip, you will need around $30K to purchase. And then another $30K-$40K for renovations. If you want to buy and hold, you will need at least $35K-$40K for the down payment. You also need to have reserves in case something comes up.

@Aristotle Kumpis Thank you for taking the time to respond to my post. Reading the room, I think I should keep saving my funds. 😁

1 Reply
Guenevere F.
OP
Property Manager · Seattle, WA · Member since 2024 · 14 posts · 14 votes
1y
Quote from @Pete Krusinski:

Hi Guenevere,
With a budget of $23,000, it seems like multifamily might be off the table for now. It's possible to consider a single-family investment, but even then, it would be quite tight accounting for the down payment, closing costs, insurance, etc. I'd recommend holding off until you've built up more funds. It's important not to strech yourself too thin financially, especially with your first investment. I don't want to be discourage you; I just want to ensure you're in the best position to succeed when you do make that leap.

@Pete Krusinski Thank you for taking the time to respond to my post! I appreciate the honestly and it’s not discouraging. I look at it like this. This is a big investment and I’d be doing myself a disservice by jumping into real estate investing blind folded or with unrealistic expectations. I know I have a good starting point but it sounds like I’m just not quite yet there. 😁 Thank you again!
1 Reply
Guenevere F.
OP
Property Manager · Seattle, WA · Member since 2024 · 14 posts · 14 votes
1y
Quote from @James Wise:

Quote from @Guenevere F.:

Hi All!
This will be my first investment property. I currently live in Washington State, and am looking to invest in OH, providing housing for Section 8. I’m a full time property manager in my 9 to 5 and manage 138 doors. I’m wondering if $23k of my own liquidated funds is reasonable to start looking for an investment property? Any thoughts and comments welcome as I am very new and open to learning from seasoned investors. Thank you all! 🙏🏼

You can pickup a Section 8 house in Cleveland using your money as the down payment. Maybe a duplex if you're lucky, but definitely a SFR.

@James Wise Thank you for taking the time to respond to my post! I’ve even looked at seller financed deals. I know a lot of them will need work put into them but the ones I’ve come across just need a little more then what I have right now, but I’m determined to find a way! 😁
1 Reply
Account Closed
Realtor · Cleveland, OH · Member since 2023 · 340 posts · 215 votes
1y
Hi, please feel free to reach out regarding any questions with the Ohio Real Estate market. Best Wishes!
0 Reply
Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1y
Not specific to OP but I constantly observe the pressure investors face to buy real estate. There's so much content and so many individuals who push inexperienced investors to take action before they are financially ready while downplaying the risks, particularly those associated with properties in lower tier neighborhoods. Consequently many inexperienced investors make investment decisions based on where they can afford to buy, not necessarily where a good investment thesis may exist.
Even if OP can complete a purchase in Cleveland with $23K, aside from valid concerns others noted about reserves, is the risky asset in a distant market really the best place to invest? While I can appreciate ones desire to own real estate, it is not the appropriate investment strategy for most who fall within this category & the consequences of a bad investment generally far exceed the potential upside. Making matters worse the investor with limited resources cannot recover as easily as the investor who makes the risky investment but does so knowing they can afford to take the L.
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Andrew FreedBusiness Member
Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
1y
@Guenevere F. - Simply put, no. Real estate is expensive to own and to go into a property with low reserves or not enough money is a recipe for disaster. What is your roof goes, a heating unit.... you're credit card debt could build up quick as a result of this putting yourself in a bad situation. You definitely want at least $15-30K in reserves after the down payment and stabalization costs. Otherwise you may be put into a situation where you have your back is against a wall and you have no way out. Just my two cents. Best of luck with building your rental portfolio.
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2 Reply
Andrew Weiner
Property Manager · Cleveland, OH · Member since 2020 · 268 posts · 315 votes
1y
I tend to agree with most everyone's comments here. I would encourage you to take a trip to the market you plan to invest in and tour some houses in the neighborhoods that you are looking at. There are many aspects of the properties and neighborhoods that those of us on the ground can explain but it does not compare to the insight from seeing them in person. Even if the units you tour aren't the one you eventually buy, walking around the area and getting a feel for the property types will help you be a much more informed consumer when you are ready to pull the trigger. Good luck on your investment journey!
0 Reply
Jeff Roth
Real Estate Consultant · Ann Arbor, MI · Member since 2022 · 471 posts · 260 votes
1y
Hi Guenevere-
You have $23K liquid and wonder if that is enough to start investing in OH with section 8 rentals and you are a full time property manager out of State.
I would recommend having twice your downpayment in cash or equivalents, like a line of credit, for repairs and unforeseen expenses as a minimum.
You want to have as much reserves as possible and agree with your focus on Section 8.
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Jimmy LieuBusiness Member
Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
1y
Quote from @Guenevere F.:

Hi All!
This will be my first investment property. I currently live in Washington State, and am looking to invest in OH, providing housing for Section 8. I’m a full time property manager in my 9 to 5 and manage 138 doors. I’m wondering if $23k of my own liquidated funds is reasonable to start looking for an investment property? Any thoughts and comments welcome as I am very new and open to learning from seasoned investors. Thank you all! 🙏🏼

Hi Guenevere! I agree with the comments here that $23k will not be enough for now. You should budget around 2-5% of the purchase price for closing costs. For reserves, you'll want 3-6 months of potential expenses saved (repairs, vacancies, unexpected costs). Since Section 8 properties often need some work to pass inspection, you may need around $10k or more for potential upgrades or repairs. Ideally, you'd want closer to $40k-$50k to feel truly comfortable and have a safety net for your first investment property. But this shouldn't stop you from connecting with lenders this early. I have Section 8 rentals myself so I'm happy to connect and answer any questions you may have.
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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
1y
@Guenevere F.
can you start with a house hack in Washington? house hacking is a powerful way to get started.
1 Reply
Bud Gaffney
Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
1y
100%. Go down to the bone as long as you have consistent income. Keep your base @ 5K. SO you have 18K to go full throttle. GO FOR IT! And only listen to multi millionaires IN THE GAME.
0 Reply
Bud Gaffney
Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
1y
house hack!
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