Out-of-State - Ohio Section 8 Housing

Member since 2025 · 23 posts · 11 votes

I'm looking to get involved in Section 8 housing out-of-state - in OH. For those who are running successful Section 8 businesses out-of-state, did you start in just 1 state or if the opportunity made sense would you purchase the property regardless of the state?

Self-proclaimed Section 8 guru's online claim to do the latter and then find Property Managers after they purchase the property in whatever state, but I don't know how real that is.

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Drew SygitBusiness Member

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

@Danielle B. be VERY careful with S8 "gurus".

Most are selling hype to get you to buy their programs by deliberately make it sound easy.

Your profile here on BP is blank, so guessing you are a "newbie"?

The best way to start in rentals is by buying in your own area. Then you can self-manage and learn all about tenants, contractors, etc.

Once you know the "basics', you can then invest OOS more successfully.

If you can't afford to invest in your home area, how will you grow your knowledge of an OOS if you take a shotgun approach to where you buy?

What accumulated knowledge will you be able to leverage for more successful investing?

Here's some basic copy & paste info that may help you make better investing decisions:

----------------------------------------------------------------------------------------------------------------

Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.

If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Similarly, if you put several Class D tenants in a Class A 4-plex, what do you think will happen to the property?

So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

The City of Detroit has 183 Neighborhoods we’ve analyzed.

DM us if you’d like to discuss this logical approach in greater detail!

[email protected]248-209-6824

Logical Property Management4.9469 Reviews

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Jaycee GreenePro Member
Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
1y
Hi @Danielle B., welcome to the BP Forum! It's great you have an interest in S8 investing. Do you have a personal connection to S8 properties or are you mostly looking at it based on the expected returns? Also, are you focusing on a specific city in OH?
[email protected]
0 Reply
Danielle B.
OP
Member since 2025 · 23 posts · 11 votes
1y
Thank you!
I'm mostly looking at it based on the expected returns. I'm not sure what specific areas in OH I'll focus on yet.
0 Reply
Jaycee GreenePro Member
Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
1y
Quote from @Danielle B.:

Thank you!
I'm mostly looking at it based on the expected returns. I'm not sure what specific areas in OH I'll focus on yet.

@Danielle B. Got it. There are several S8 investors on the forum that will give you a much better overview of S8 investing. One that comes to mind is Mike Curadossi...you can check him out on IG here: @section8doneright. Lastly, investing in S8 properties is not for the faint of heart (or stomach), both on the property acquisition side, but also on the property management side.

[email protected]
0 Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
1y
@Danielle B. be VERY careful with S8 "gurus".

Most are selling hype to get you to buy their programs by deliberately make it sound easy.

Your profile here on BP is blank, so guessing you are a "newbie"?

The best way to start in rentals is by buying in your own area. Then you can self-manage and learn all about tenants, contractors, etc.

Once you know the "basics', you can then invest OOS more successfully.

If you can't afford to invest in your home area, how will you grow your knowledge of an OOS if you take a shotgun approach to where you buy?

What accumulated knowledge will you be able to leverage for more successful investing?

Here's some basic copy & paste info that may help you make better investing decisions:

----------------------------------------------------------------------------------------------------------------

Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.

If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Similarly, if you put several Class D tenants in a Class A 4-plex, what do you think will happen to the property?

So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

The City of Detroit has 183 Neighborhoods we’ve analyzed.

DM us if you’d like to discuss this logical approach in greater detail!
[email protected]248-209-6824
Logical Property Management4.9469 Reviews
Website View Page
2 Reply
Danielle B.
OP
Member since 2025 · 23 posts · 11 votes
1y
@Drew Sygit thanks for the info.
I should have mentioned that I have experience as a NJ hard money lender but I would be a newbie to Section 8 and OOS real estate investing in general.
0 Reply
Shawn AckermanPro Member
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
1y
@Danielle B. when buying out of state you have to know the people you will be working with. You can build your own team i.e. title co, insurance, pm, contractors, handyman,process server, lender etc.... or you can find an operator who can get you going in that market while simultaneously building out your team.

Section 8 housing is a great way to ensure consistency with rent payments however not all tenant who have HCV pay 0%. Many times the tenants are income based and pay 20-40% wherein only 60-80% may be guaranteed.

Aside from the rent percentage issue is pride of ownership. Sometimes the tenants are coming from shelters or other communal type of housing where maintaining a space my not be solely there responsibility so maintaining the unit may not be to your liking. Not in all cases but more often then not.

Additionally you have to have solid management who is checking on the property at a minimum once per quarter as many times I find these tenant don't always report issues timely.

Is it a great way to ensure income consistency? Yes, but you should really be involved at the outset.

There are so many other nuanced things to discuss but I'll leave it right here for now.

Best of luck!

1 Reply
Danielle B.
OP
Member since 2025 · 23 posts · 11 votes
1y
@Shawn Ackerman thank you for your insight.

There's a self-proclaimed Section 8 guru online who claims he hires random property managers through this website called Thumbtack. Does anyone have experience doing this?

1 Reply
Jimmy LieuBusiness Member
Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
1y
Quote from @Danielle B.:

I'm looking to get involved in Section 8 housing out-of-state - in OH. For those who are running successful Section 8 businesses out-of-state, did you start in just 1 state or if the opportunity made sense would you purchase the property regardless of the state?

Self-proclaimed Section 8 guru's online claim to do the latter and then find Property Managers after they purchase the property in whatever state, but I don't know how real that is.

I own quite a few section 8 rentals myself! I personally started in my local real estate market in Columbus Ohio. It's a great market because you can still find section 8 rentals well over the 1% rule. One of my clients recently just purchased a 3/1 single family house that will become a section 8 rental and they will be renting it out for $1550/mo which is well over the 1% rule. You can find tons of cash flowing opportunities here and you get amazing appreciation potential as well. Happy to connect and answer any questions you have.
[email protected]614-300-7535
Jimmy Lieu, Red 1 Realty4.9122 Reviews
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Jimmy LieuBusiness Member
Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
1y
Quote from @Danielle B.:

@Shawn Ackerman thank you for your insight.

There's a self-proclaimed Section 8 guru online who claims he hires random property managers through this website called Thumbtack. Does anyone have experience doing this?

No, I would not hire a random PM on thumbtack... thats crazy! I would avoid that "guru" - a good property manager can make or break your investing career and I can definitely assure you that you're not finding a great PM using thumbtack! That's a mobile app for small handyman repairs lol!
[email protected]614-300-7535
Jimmy Lieu, Red 1 Realty4.9122 Reviews
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Danielle B.
OP
Member since 2025 · 23 posts · 11 votes
1y
Thank you, @Jimmy Lieu.
0 Reply
Kerlous TadresBusiness Member
Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
1y
Quote from @Danielle B.:

I'm looking to get involved in Section 8 housing out-of-state - in OH. For those who are running successful Section 8 businesses out-of-state, did you start in just 1 state or if the opportunity made sense would you purchase the property regardless of the state?

Self-proclaimed Section 8 guru's online claim to do the latter and then find Property Managers after they purchase the property in whatever state, but I don't know how real that is.

Hey Danielle,

I know investors that are able to do section 8 rentals very successfully in Columbus, Toledo, and Cleveland. It's all about making sure the properties meet the requirements of section 8 and getting solid deals for 3+ bedrooms.
[email protected]614-490-1163
Kerlous Tadres | Reafco Real Estate542 Reviews
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Shawn AckermanPro Member
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
1y
@Danielle B. you are welcome. Always fact check the people who you are taking advice from. Being a landlord is not an overnight get rich quick scheme.
2 Reply
Mike PaolucciBusiness Member
Realtor · Columbus Cleveland Dayton, OH · Member since 2022 · 504 posts · 556 votes
1y
Quote from @Danielle B.:

I'm looking to get involved in Section 8 housing out-of-state - in OH. For those who are running successful Section 8 businesses out-of-state, did you start in just 1 state or if the opportunity made sense would you purchase the property regardless of the state?

Self-proclaimed Section 8 guru's online claim to do the latter and then find Property Managers after they purchase the property in whatever state, but I don't know how real that is.

I'm a big believer in purchasing in a landlord friendly state. If you purchase in a anti-landlord state, you'll likely have a harder time and deal with extended timelines if the need to evict comes up. Ohio is a great option for S8 investing.

You can find a PM at any point in time during the process but your realtor should be able to put you in touch with some good local PM's who have experience dealing with Section 8 Tenants and the program itself.

I've had several Section 8 tenants in Columbus and enjoy the program overall. Happy to share some experiences.

[email protected]614-892-9184
Reafco - Mike Paolucci 512 Reviews
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Robert EllisBusiness Member
Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
1y
Quote from @Danielle B.:

I'm looking to get involved in Section 8 housing out-of-state - in OH. For those who are running successful Section 8 businesses out-of-state, did you start in just 1 state or if the opportunity made sense would you purchase the property regardless of the state?

Self-proclaimed Section 8 guru's online claim to do the latter and then find Property Managers after they purchase the property in whatever state, but I don't know how real that is.

I bought and sold old houses for 10 years. I'm from Toledo and know most of the turnkey guys. just make sure to buy later than 1950. don't get the knob and tube and plaster and lathe and cast iron sewer lines. understand that most markets that do turn key or section 8 are going to never appreciate like Cleveland or Toledo or tertiary markets like Akron or Cleveland. I'm not an expert in these markets nor turn key but ohio is a great state to invest. our strategy has always been buying below market or building below market
[email protected]786-494-6766
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1y
@Danielle B. What data are you relying on that suggests Section 8 leased properties provide for better returns than other investment strategies? It sounds like you are overly confident in your Excel spreadsheets.....
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1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
1y
Quote from @Stuart Udis:

@Danielle B. What data are you relying on that suggests Section 8 leased properties provide for better returns than other investment strategies? It sounds like you are overly confident in your Excel spreadsheets.....

Seems like the new on line marketing methods Section 8 is the new shinny object.. Sec. 8 works well in some markets and it can be a premium and successful for locals who own a bunch of them and run them with an iron fist..
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1y
Most who opt for section 8 are purchasing in the lowest barrier neighborhoods where section 8 is the best of bad options. This is being pushed on out of state investors who don't have a clue what they are signing up for. Ultimately its the brokers, PM's and lenders who are advocating for this strategy because they are collecting their fees. Very difficult to be successful with this program when buying in these lower tier markets unless you are hands on as you say and yes, scale is necessary to achieve efficiencies. Neither of which is happening with these out of state investors who believe section 8 is there path to early retirement.
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Danielle B.
OP
Member since 2025 · 23 posts · 11 votes
1y
Quote from @Robert Ellis:

Quote from @Danielle B.:

I'm looking to get involved in Section 8 housing out-of-state - in OH. For those who are running successful Section 8 businesses out-of-state, did you start in just 1 state or if the opportunity made sense would you purchase the property regardless of the state?

Self-proclaimed Section 8 guru's online claim to do the latter and then find Property Managers after they purchase the property in whatever state, but I don't know how real that is.

I bought and sold old houses for 10 years. I'm from Toledo and know most of the turnkey guys. just make sure to buy later than 1950. don't get the knob and tube and plaster and lathe and cast iron sewer lines. understand that most markets that do turn key or section 8 are going to never appreciate like Cleveland or Toledo or tertiary markets like Akron or Cleveland. I'm not an expert in these markets nor turn key but ohio is a great state to invest. our strategy has always been buying below market or building below market

Yes! I've read the same thing, only buy later than 1950 and turnkey.
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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
1y
Quote from @Danielle B.:

@Shawn Ackerman thank you for your insight.

There's a self-proclaimed Section 8 guru online who claims he hires random property managers through this website called Thumbtack. Does anyone have experience doing this?

Section 8 is a legit way to make money. Hiring random property managers off of Thumbtack sounds ridiculously stupid though.
1 Reply
Brendan Taylor
Real Estate Agent · Akron, OH · Member since 2017 · 73 posts · 48 votes
1y
Section 8 can be great but like others have said make sure you understand the pitfalls. Lots of gurus advertising how easy it is in order to sell a course or whatever else. I have section 8 tenants here in Akron, OH and some of them are truly my best tenants. Interview reputable property management companies. I am sure a Thumbtack PM works great when something legal goes down lol. Even still, make sure you have your tenant screening down to a science and do not rely solely on PM. Vacancy can kill you in any of the markets you are most likely considering but if you get good S8 tenants in a property they are much less likely to move.

Ultimately, I do think S8 requires scale and lots of efficiencies but has its benefits. Just make sure you know what you are getting into fully.

1 Reply
Marc RiceBusiness Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
1y
Quote from @Danielle B.:

I'm looking to get involved in Section 8 housing out-of-state - in OH. For those who are running successful Section 8 businesses out-of-state, did you start in just 1 state or if the opportunity made sense would you purchase the property regardless of the state?

Self-proclaimed Section 8 guru's online claim to do the latter and then find Property Managers after they purchase the property in whatever state, but I don't know how real that is.

It's hard enough to find 1 good property manager you align with, let alone 1 per state. I'd start and scale in one market first before moving on.
[email protected]614-363-2787
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