Looking for Guidance on Using Home Sale Equity to Start Section 8 Investing
Member since 2018 · 8 posts · 7 votes
Looking for Guidance on Using Home Sale Equity to Start Section 8 Investing
Most Popular Reply
Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votesThis would be the worst decision you've ever made in your life, other than creating this post and reading all the AI that people are replying to you with to help you lose your savings and cripple your financial foundation for a lifetime.
Section 8 rentals are for professional landlords with more systems than you can ever imagine. It's an absolute landmine for a new investor and not a place to put money that you earned from owning a home. It's catastrophic and your "friend" should immediately be removed from all of your social media and cut out of your life.
Any time someone says it's a good idea, they are pitching you. Come to my market. It doesn't matter what market, you will lose it all doing this without any question. Section 8 is high-touch, high-maintenance, and not at all BRRRR-friendly. Someone probably told you it's "government-backed" and virtually fool proof. They should be slide tackled.
DO NOT PROCEED under any circumstances and de-friend that person forever.
25 Replies
- Specialist · Long Beach, CA · Member since 2011 · 888 posts · 401 votes1y
Hi Alexsis. I don't know if selling your primary home to buy a few rentals makes the best sense. But it depends on what you are trying to do. If you sell your home and then rent something, will the payment be higher than what your current mortgage is? Even after making a few hundred dollars a month cash flow for each section 8 property, will you be in a better place? That is something you should ask yourself. You won't get wealthy from purchasing 1-2 rental properties. Maybe you would be better off taking equity out of your primary home to start.
- Member since 2018 · 8 posts · 7 votes1y
Quote from @Aristotle Kumpis:
Hi Alexsis. I don't know if selling your primary home to buy a few rentals makes the best sense. But it depends on what you are trying to do. If you sell your home and then rent something, will the payment be higher than what your current mortgage is? Even after making a few hundred dollars a month cash flow for each section 8 property, will you be in a better place? That is something you should ask yourself. You won't get wealthy from purchasing 1-2 rental properties. Maybe you would be better off taking equity out of your primary home to start.
Hi Aristotle , thank you so much for your thoughtful response. My current mortgage is actually quite low—about $1,850/month—and since I’ll be moving in with my partner, even though the rent at the new place is higher, we’ll be splitting costs. So estimated cash flow renting out my property should come out to around $350–$400/month
I did consider pulling equity from my primary home, but with my current interest rate being 2.9%, it doesn’t seem like the best move in this rate environment. I really appreciate your perspective though—it helped me step back and think things through more critically. I’m going to hold onto the property for now and focus instead on finding stronger investment opportunities elsewhere.
Thanks again for your insight!
- 1yArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 968 votes
Hey Alexsis, sounds like you’ve got a solid plan and a clear goal with Section 8 rentals. While I’m not familiar with Huntsville or Birmingham personally, I focus on Midwest markets, and what I’ve seen is that the Midwest offers strong rental demand, predictable cash flow, lower entry costs, and stable tenant pools, making it ideal for out-of-state investors. The biggest pitfalls usually come from not having reliable property managers on the ground, underestimating maintenance costs, or overlooking local tenant laws, so building a trusted local team is key. Selling your home to start investing can work if you’re ready to take action and want to scale faster, but it’s important to run the numbers carefully on cash flow and reserves before committing.
- MD/DC · Member since 2024 · 1k+ posts · 1k+ votes1y
Where are you planning to live? Why Section 8? It may sound tempting to add more doors for less money but personally I found class A&B neighborhoods have minimal tenant issues, appreciated nicely and were relatively easy to rent and sell.
- Member since 2018 · 8 posts · 7 votes1y
Quote from @Jules Aton:
Where are you planning to live? Why Section 8? It may sound tempting to add more doors for less money but personally I found class A&B neighborhoods have minimal tenant issues, appreciated nicely and were relatively easy to rent and sell.
Hi Jules,
Thanks for your comment and insight! I’ll actually be moving in with my partner, so while the rent at the new place will be higher than my current mortgage (which is around $1,850/month).
I’ve been exploring Section 8 because a real estate agent friend of mine recommended it as an option. I definitely see the appeal of Class A & B neighborhoods too—less tenant turnover, strong appreciation, and easier resale are big advantages.
I was weighing some options and really appreciate your perspective—it’s helped me look at this from a few more angles.
- 1yZach ProuxBusiness MemberMember since 2024 · 7 posts · 1 vote
I’ll be upfront — I’m not the most seasoned investor, but I am an experienced property manager, and that gives me a slightly different perspective on your questions.
If you’re planning to invest out of state, the market itself matters, but your success is going to hinge much more on the team you choose. You’ll be completely dependent on your property manager and realtor to find the right property, handle tenant placement, and manage everything day to day. You can find good teams in almost any city, but it’s not always easy, and getting stuck with the wrong one can wipe out all the “on paper” returns.
On Section 8 specifically: yes, the checks are steady, but the strategy often puts too much weight on cash flow while overlooking other parts of real estate investing like appreciation and tenant stability. Section 8 can also come with higher maintenance costs, more red tape, and more surprises. In many markets the voucher doesn’t cover 100% of the rent, and that gap can still be tough for tenants to cover. So it’s not as risk-free as some people assume.
For some investors, focusing on premium rentals that can capture strong market rents is just as profitable in the long run. If you’re planning to renovate anyway with a BRRR approach, it’s worth asking whether targeting higher-quality properties and tenants might be a better strategy for you.
Since I’m in Grand Rapids, MI, I’ll also put in a plug for this market. GR has one of the most balanced mixes I’ve seen: affordability, solid cash flow, very low vacancy, steady rent growth, a diversified job market, and ongoing investment in the city. It’s not just a Midwest play — by many measures it’s outperforming larger markets nationwide. We’ve even used that in our own marketing because the fundamentals here really are that strong.
So my advice is: don’t just chase the “best” Section 8 market. First, line up a property manager and realtor team you truly trust, because they’ll make or break your investment. Second, think carefully about whether Section 8 fits your long-term goals, or whether premium rentals might give you the same returns with fewer headaches.
- Member since 2018 · 8 posts · 7 votes1y
Quote from @Zach Proux:
I’ll be upfront — I’m not the most seasoned investor, but I am an experienced property manager, and that gives me a slightly different perspective on your questions.
If you’re planning to invest out of state, the market itself matters, but your success is going to hinge much more on the team you choose. You’ll be completely dependent on your property manager and realtor to find the right property, handle tenant placement, and manage everything day to day. You can find good teams in almost any city, but it’s not always easy, and getting stuck with the wrong one can wipe out all the “on paper” returns.
On Section 8 specifically: yes, the checks are steady, but the strategy often puts too much weight on cash flow while overlooking other parts of real estate investing like appreciation and tenant stability. Section 8 can also come with higher maintenance costs, more red tape, and more surprises. In many markets the voucher doesn’t cover 100% of the rent, and that gap can still be tough for tenants to cover. So it’s not as risk-free as some people assume.
For some investors, focusing on premium rentals that can capture strong market rents is just as profitable in the long run. If you’re planning to renovate anyway with a BRRR approach, it’s worth asking whether targeting higher-quality properties and tenants might be a better strategy for you.
Since I’m in Grand Rapids, MI, I’ll also put in a plug for this market. GR has one of the most balanced mixes I’ve seen: affordability, solid cash flow, very low vacancy, steady rent growth, a diversified job market, and ongoing investment in the city. It’s not just a Midwest play — by many measures it’s outperforming larger markets nationwide. We’ve even used that in our own marketing because the fundamentals here really are that strong.
So my advice is: don’t just chase the “best” Section 8 market. First, line up a property manager and realtor team you truly trust, because they’ll make or break your investment. Second, think carefully about whether Section 8 fits your long-term goals, or whether premium rentals might give you the same returns with fewer headaches.
Hi Zach,
Thanks so much for your detailed response—I really appreciate you sharing your insight, especially from the property management side. That perspective is incredibly valuable, and honestly something I’ve been trying to learn more about as I explore out-of-state investing.
I completely agree that the team makes or breaks the investment, especially when you're not local. I’m still in the early stages of planning, but I’ve been working closely with a real estate agent friend who has experience with Section 8 investing and recommended it as a good cash flow strategy to start with. That’s what initially got me looking in that direction. However, your point about the importance of tenant stability, long-term maintenance, and appreciation is really well taken—those are things I don’t want to overlook in pursuit of short-term cash flow.
Grand Rapids sounds like a really interesting market—I’ve heard good things but hadn’t seriously looked into it yet. I’ll definitely take a closer look and appreciate the plug!
Thanks again for taking the time to share all of this. You’ve given me a lot to think about as I refine my strategy.
- 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
@Alexsis Venable STOP! STOP! STOP!
You've obviously read too much one-sided info about S8 investing and now think it's guaranteed money:(
Hopefully, you didn't spend any money buying one of the ridiculously biased S8 guru courses.
FYI: been managing S8 tenants for over 20 years, currently have 92 S8 leases we manage. So, we may know a thing or two.
Yes, S8 is a decent program - BUT IT IS NOT A CURE-ALL!
Tenants don't qualify for a S8 voucher if they're in a good financial position.
WIth S8, you statistically get Class C & D tenants with credit scores under 600 and no savings. They also tend to cause more wear & tear because they are home ALL DAY, since most don't work. With nothing else to do, they do seem to have more "drama" in their lifes.
So, to be successful with S8 tenants, you need to screen them even BETTER than cash-paying tenants and spend more time monitoring them. Otherwise, you'll find their significant others, family and more living in your property - causing more wear & tear.
Recommend NOT focusing on properties for S8, focus on good rentals period.
Newbie investors should stay away from Class C neighborhoods/properties and focus on Class B.
Here's some more cut & paste info on that:
----------------------------------------------------------------------------------
How much do you know about Property Classes?
Recommend you spend some time learning about them, so you don’t mistakenly buy a property that will NEVER meet your expectations!
Why is Property Class so important for investors to understand and apply in their investing strategies?
Because the Property Class dictates the Class of the tenant pool that the property will attract.
The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.
Both Property Class and Tenant Class will affect what type of contractors, handymen and property management companies you should target and be willing to deal with a property.
The Property Class will also impact the maintenance & renovations you do to, “Maintain to the Neighborhood”.
Why is that important?
Well, if you buy & renovate a property in Class D area to Class A standards, what Tenant Class will actually rent it?
Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?
So, if you fail to apply the correct assumptions to a property, your expectations won’t be met, and it may even be a financial disaster.
We use the following to rank Property Classes, in order of importance:
- Property Tenant Pool: closely linked to location, but not always.
- Property Location: closely linked to tenant pool, but not always.
- Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”
Key metrics for each Property Class:
Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.
Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.
Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.
Where did we get our FICO credit score information from?
Check out this chart:
FICO Score
Pct of Population
Default Probability
800 or more
13.00%
1.00%
750-799
27.00%
1.00%
700-749
18.00%
4.40%
650-699
15.00%
8.90%
600-649
12.00%
15.80%
550-599
8.00%
22.50%
500-549
5.00%
28.40%
Less than 499
2.00%
41.00%
Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
Metro Detroit has 132 cities, the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying. Check out the map on our website where we’ve made this all easy to follow.
We can also share numerous examples of properties & portfolios we’ve assisted investors with!
DM us if you’d like to discuss this logical approach in greater detail!
Horror Stories:
https://www.biggerpockets.com/forums/48/topics/1137397-baltimore-a-path-to-never-ending-pain
https://www.biggerpockets.com/forums/432/topics/1231840-sell-at-a-loss-or-rent-at-a-loss
https://www.biggerpockets.com/forums/311/topics/840134-memphis-turnkey-tenant-turnover-costs
Logical Property Management4.9469 Reviews- Member since 2018 · 8 posts · 7 votes1y
Quote from @Drew Sygit:
@Alexsis Venable STOP! STOP! STOP!
You've obviously read too much one-sided info about S8 investing and now think it's guaranteed money:(
Hopefully, you didn't spend any money buying one of the ridiculously biased S8 guru courses.
FYI: been managing S8 tenants for over 20 years, currently have 92 S8 leases we manage. So, we may know a thing or two.
Yes, S8 is a decent program - BUT IT IS NOT A CURE-ALL!
Tenants don't qualify for a S8 voucher if they're in a good financial position.
WIth S8, you statistically get Class C & D tenants with credit scores under 600 and no savings. They also tend to cause more wear & tear because they are home ALL DAY, since most don't work. With nothing else to do, they do seem to have more "drama" in their lifes.
So, to be successful with S8 tenants, you need to screen them even BETTER than cash-paying tenants and spend more time monitoring them. Otherwise, you'll find their significant others, family and more living in your property - causing more wear & tear.
Recommend NOT focusing on properties for S8, focus on good rentals period.
Newbie investors should stay away from Class C neighborhoods/properties and focus on Class B.
Here's some more cut & paste info on that:
----------------------------------------------------------------------------------
How much do you know about Property Classes?
Recommend you spend some time learning about them, so you don’t mistakenly buy a property that will NEVER meet your expectations!
Why is Property Class so important for investors to understand and apply in their investing strategies?
Because the Property Class dictates the Class of the tenant pool that the property will attract.
The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.
Both Property Class and Tenant Class will affect what type of contractors, handymen and property management companies you should target and be willing to deal with a property.
The Property Class will also impact the maintenance & renovations you do to, “Maintain to the Neighborhood”.
Why is that important?
Well, if you buy & renovate a property in Class D area to Class A standards, what Tenant Class will actually rent it?
Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?
So, if you fail to apply the correct assumptions to a property, your expectations won’t be met, and it may even be a financial disaster.
We use the following to rank Property Classes, in order of importance:
- Property Tenant Pool: closely linked to location, but not always.
- Property Location: closely linked to tenant pool, but not always.
- Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”
Key metrics for each Property Class:
Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.
Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.
Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.
Where did we get our FICO credit score information from?
Check out this chart:
FICO Score
Pct of Population
Default Probability
800 or more
13.00%
1.00%
750-799
27.00%
1.00%
700-749
18.00%
4.40%
650-699
15.00%
8.90%
600-649
12.00%
15.80%
550-599
8.00%
22.50%
500-549
5.00%
28.40%
Less than 499
2.00%
41.00%
Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
Metro Detroit has 132 cities, the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying. Check out the map on our website where we’ve made this all easy to follow.
We can also share numerous examples of properties & portfolios we’ve assisted investors with!
DM us if you’d like to discuss this logical approach in greater detail!
Horror Stories:
https://www.biggerpockets.com/forums/48/topics/1137397-baltimore-a-path-to-never-ending-pain
https://www.biggerpockets.com/forums/432/topics/1231840-sell-at-a-loss-or-rent-at-a-loss
https://www.biggerpockets.com/forums/311/topics/840134-memphis-turnkey-tenant-turnover-costs
Hi Drew,
Thank you so much for this insight and experience—I definitely appreciate hearing from someone who’s been managing Section 8 tenants for over 20 years. That kind of perspective is hard to come by, and I respect the work that goes into managing 90+ S8 leases.
Luckily I haven’t bought any courses from “gurus.” I have an real estate agent/investor friend who suggested this as a path to starting inventing and potentially generate more cash flow enting out my home. Just wanted to see what options are out there.
I’m still very much in the planning phase and trying to educate myself, which is why I appreciate you and others sharing both the pros and the real challenges of Section 8 investing. Tenant class, property class, and long-term property performance are definitely things I want to understand fully before making any decisions. For sure have no plans to jump into anything blindly. Thank you SOOOO much for this!
- Member since 2018 · 8 posts · 7 votes1y
Hi Zach,
Thanks so much for your detailed response—I really appreciate you sharing your insight, especially from the property management side. That perspective is incredibly valuable, and honestly something I’ve been trying to learn more about as I explore out-of-state investing.
I completely agree that the team makes or breaks the investment, especially when you're not local. I’m still in the early stages of planning, but I’ve been working closely with a real estate agent friend who has experience with Section 8 investing and recommended it as a good cash flow strategy to start with. That’s what initially got me looking in that direction. However, your point about the importance of tenant stability, long-term maintenance, and appreciation is really well taken—those are things I don’t want to overlook in pursuit of short-term cash flow.
Grand Rapids sounds like a really interesting market—I’ve heard good things but hadn’t seriously looked into it yet. I’ll definitely take a closer look and appreciate the plug!
Thanks again for taking the time to share all of this. You’ve given me a lot to think about as I refine my strategy.
- 1yBernice RetzloffPro MemberMemphis, TN · Member since 2024 · 234 posts · 100 votes
Hey @Alexsis Venable! great questions and a smart way to think through your next move. Using your home equity to jumpstart investing is a path many choose, but it does require careful planning and execution.
Here’s what I see based on your markets and goals:
1. Which markets are strong for Section 8 in 2025?
Memphis, TN is still solid for Section 8. There’s existing infrastructure, demand from working-class renters, and many investors use Section 8 as part of their stable cash flow strategy.
Cleveland, OH still has neighborhoods where Section 8 is viable, though it's more variable - you’ll want to carefully vet which zip codes.
Birmingham, AL and Huntsville, AL also have potential for Section 8, especially in neighborhoods close to jobs and transit, but they tend to require stricter due diligence on tenant risk and neighborhood stability.
In short: Memphis probably gives you the most “safe bet” among those four for combining affordability + existing Section 8 systems + investor awareness.
2. Pitfalls of buying out of state
Local knowledge / neighborhood variance - a property two blocks away might be great or terrible. You’ll need a trustworthy local agent and boots-on-the-ground help.
Property management reliability - you’ll depend heavily on the PM to screen tenants, handle repairs, and enforce lease terms. If they’re not on point, issues multiply fast.
Unexpected costs and capital expenditures (capex) - roofs, HVAC, plumbing - things you might not see in photos. Always pad your rehab/reserve budget.
Tenant risk / turnover / vacancy - Section 8 helps with consistent partial rent payments, but there can be delays or administrative hassle.
Inspection / compliance - Section 8 properties often have more inspections and requirements; failing those can lead to rent being withheld or fines.
Cash flow margin pressure - because you’re leveraging your home equity, higher mortgage or financing costs might eat into your margin early.
3. Should you sell your home or rent it out and invest elsewhere?
This depends a lot on your risk tolerance, attachment to your current home, and how confident you are in managing a rental. Some thoughts:
Pros of selling & investing elsewhere
• You free up large working capital without debt service on your primary.
• You can start with a portfolio approach out-of-state rather than one risky piece here.
• You avoid the stress of managing a long-distance rental of your former home (which might not cash flow well in South Jersey).
Pros of renting your home instead
• You keep your “home base” and avoid relocating if things get rough.
• You maintain potential home appreciation in your local market (if it grows).
• You may be able to use that rental as backup or sell later if your investing path doesn’t work out.
If your goal is generating more cash flow and scaling quickly, selling might give you more leverage to get going full speed in cheaper, more cash-flow-friendly markets. Just make sure you’ve vetted your first deals thoroughly - losing equity on a bad rental can hurt more than leaving some equity idle.
If you’re seriously considering Memphis, I’d be happy to walk you through:
Recent Section 8 deal examples
Neighborhoods that balance safety + rent potential
How other out-of-state investors set up their property management and rehab teams here
Let me know! I’d love to help you run numbers or dive deeper into a market comparison.
- 1yJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Alexsis Venable:
Hey everyone,
I’m considering selling my primary home in South Jersey (worth ~$360K, owe ~$248K) and using roughly $85–90K in equity to start investing in Section 8 rentals.
My goal is to create long-term cash flow and gradually scale to multiple properties using a BRRR-style strategy.
I’m currently looking at Cleveland, Huntsville, Birmingham, and Memphis for affordability and rent potential.
A few questions for experienced investors:
- Which of these markets are still strong for Section 8 in 2025?
- Any pitfalls to watch for when buying out of state?
- Would selling my home and starting this strategy be wiser than renting it out?
I’d really appreciate any advice or insights — just trying to approach this smartly.
Thanks!
Hey Alexsis, sounds like you’re thinking this through really smart and it’s great you’ve built that equity to work with. Section 8 can be a solid strategy for stable rent if you pick the right market and manage well. If you’re open to exploring beyond your current list, I’d definitely recommend taking a look at Columbus, Ohio. It’s one of the few bigger metros where you can still find affordable properties in the $120–180K range that hit the 1% rule and cash flow from day one, and there’s a lot of population and job growth here with massive developments from companies like Intel, Amazon, Google, Facebook, Honda Motor Company, and LG Corporation. Section 8 demand is strong, and the city is landlord friendly, which helps a ton if you’re investing out of state. Selling your home to free up that capital can give you more flexibility to scale faster, while renting it out can still be a solid option if the numbers make sense—so it really comes down to cash flow and your goals. If you build a good local team and buy right, out-of-state investing can absolutely work. Happy to connect and answer any questions you have!
Jimmy Lieu, Red 1 Realty4.9122 Reviews- 1yRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @Jimmy Lieu:
Quote from @Alexsis Venable:
Hey everyone,
I’m considering selling my primary home in South Jersey (worth ~$360K, owe ~$248K) and using roughly $85–90K in equity to start investing in Section 8 rentals.
My goal is to create long-term cash flow and gradually scale to multiple properties using a BRRR-style strategy.
I’m currently looking at Cleveland, Huntsville, Birmingham, and Memphis for affordability and rent potential.
A few questions for experienced investors:
- Which of these markets are still strong for Section 8 in 2025?
- Any pitfalls to watch for when buying out of state?
- Would selling my home and starting this strategy be wiser than renting it out?
I’d really appreciate any advice or insights — just trying to approach this smartly.
Thanks!
Hey Alexsis, sounds like you’re thinking this through really smart and it’s great you’ve built that equity to work with. Section 8 can be a solid strategy for stable rent if you pick the right market and manage well. If you’re open to exploring beyond your current list, I’d definitely recommend taking a look at Columbus, Ohio. It’s one of the few bigger metros where you can still find affordable properties in the $120–180K range that hit the 1% rule and cash flow from day one, and there’s a lot of population and job growth here with massive developments from companies like Intel, Amazon, Google, Facebook, Honda Motor Company, and LG Corporation. Section 8 demand is strong, and the city is landlord friendly, which helps a ton if you’re investing out of state. Selling your home to free up that capital can give you more flexibility to scale faster, while renting it out can still be a solid option if the numbers make sense—so it really comes down to cash flow and your goals. If you build a good local team and buy right, out-of-state investing can absolutely work. Happy to connect and answer any questions you have!
This cannot be your serious advice right?
- 1yAshish AcharyaBusiness MemberCPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
Rather than selling, I would get a HELOC to get access to cash and keep that property as a rental.
If you meet sec 121, you can sell the PR to your privately owned crop and still keep it as a rental to benefit from Section 121 capital gain exclusion.
This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.
INVESTOR FRIENDLY CPA®4.9242 Reviews- 1yJonathan GreeneBusiness MemberReal Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
Quote from @Ashish Acharya:
Rather than selling, I would get a HELOC to get access to cash and keep that property as a rental.
If you meet sec 121, you can sell the PR to your privately owned crop and still keep it as a rental to benefit from Section 121 capital gain exclusion.
This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.
When you have a disclaimer on everything you post that says, "The information contained in this post is not to be relied upon. Readers are advised to seek professional advice." why do you think anyone would listen? It's the most preposterous thing I have ever seen. You are the number one tax contributor on BiggerPockets, but you are telling every single person that not a single one of your posts can be relied on. Superb.
- 1yRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @Jonathan Greene:
Quote from @Ashish Acharya:
Rather than selling, I would get a HELOC to get access to cash and keep that property as a rental.
If you meet sec 121, you can sell the PR to your privately owned crop and still keep it as a rental to benefit from Section 121 capital gain exclusion.
This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.
When you have a disclaimer on everything you post that says, "The information contained in this post is not to be relied upon. Readers are advised to seek professional advice." why do you think anyone would listen? It's the most preposterous thing I have ever seen. You are the number one tax contributor on BiggerPockets, but you are telling every single person that not a single one of your posts can be relied on. Superb.
I think most industry professional's are regulated tougher than Realtors
- 1yJonathan GreeneBusiness MemberReal Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
Quote from @Remington Lyman:
Quote from @Jonathan Greene:
Quote from @Ashish Acharya:
Rather than selling, I would get a HELOC to get access to cash and keep that property as a rental.
If you meet sec 121, you can sell the PR to your privately owned crop and still keep it as a rental to benefit from Section 121 capital gain exclusion.
This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.
When you have a disclaimer on everything you post that says, "The information contained in this post is not to be relied upon. Readers are advised to seek professional advice." why do you think anyone would listen? It's the most preposterous thing I have ever seen. You are the number one tax contributor on BiggerPockets, but you are telling every single person that not a single one of your posts can be relied on. Superb.
I think most industry professional's are regulated tougher than Realtors
Maybe.
-----
Even though I am posting in forums to give you advice, because of my profession, I have to create disclaimer that tells you not to listen to anything I say. This makes a lot of sense. Thank you and goodnight.
- 1yRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @Alexsis Venable:
Hey everyone,
I’m considering selling my primary home in South Jersey (worth ~$360K, owe ~$248K) and using roughly $85–90K in equity to start investing in Section 8 rentals.
My goal is to create long-term cash flow and gradually scale to multiple properties using a BRRR-style strategy.
I’m currently looking at Cleveland, Huntsville, Birmingham, and Memphis for affordability and rent potential.
A few questions for experienced investors:
- Which of these markets are still strong for Section 8 in 2025?
- Any pitfalls to watch for when buying out of state?
- Would selling my home and starting this strategy be wiser than renting it out?
I’d really appreciate any advice or insights — just trying to approach this smartly.
Thanks!
Bro. This sounds like a terrible idea! Are you serious? Please do not do this!
Maybe do a house hack instead
- 1yJonathan GreeneBusiness MemberReal Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
This would be the worst decision you've ever made in your life, other than creating this post and reading all the AI that people are replying to you with to help you lose your savings and cripple your financial foundation for a lifetime.
Section 8 rentals are for professional landlords with more systems than you can ever imagine. It's an absolute landmine for a new investor and not a place to put money that you earned from owning a home. It's catastrophic and your "friend" should immediately be removed from all of your social media and cut out of your life.
Any time someone says it's a good idea, they are pitching you. Come to my market. It doesn't matter what market, you will lose it all doing this without any question. Section 8 is high-touch, high-maintenance, and not at all BRRRR-friendly. Someone probably told you it's "government-backed" and virtually fool proof. They should be slide tackled.
DO NOT PROCEED under any circumstances and de-friend that person forever.
- Member since 2018 · 8 posts · 7 votes1yHi Jonathan thank you for your advice I appreciate it! Trust me I’m not doing it I just wanted to see what other people’s thoughts were who have experience
Quote from @Jonathan Greene:
This would be the worst decision you've ever made in your life, other than creating this post and reading all the AI that people are replying to you with to help you lose your savings and cripple your financial foundation for a lifetime.
Section 8 rentals are for professional landlords with more systems than you can ever imagine. It's an absolute landmine for a new investor and not a place to put money that you earned from owning a home. It's catastrophic and your "friend" should immediately be removed from all of your social media and cut out of your life.
Any time someone says it's a good idea, they are pitching you. Come to my market. It doesn't matter what market, you will lose it all doing this without any question. Section 8 is high-touch, high-maintenance, and not at all BRRRR-friendly. Someone probably told you it's "government-backed" and virtually fool proof. They should be slide tackled.
DO NOT PROCEED under any circumstances and de-friend that person forever.
Quote from @Alexsis Venable:
Hey everyone,
I’m considering selling my primary home in South Jersey (worth ~$360K, owe ~$248K) and using roughly $85–90K in equity to start investing in Section 8 rentals.
My goal is to create long-term cash flow and gradually scale to multiple properties using a BRRR-style strategy.
I’m currently looking at Cleveland, Huntsville, Birmingham, and Memphis for affordability and rent potential.
A few questions for experienced investors:
- Which of these markets are still strong for Section 8 in 2025?
- Any pitfalls to watch for when buying out of state?
- Would selling my home and starting this strategy be wiser than renting it out?
I’d really appreciate any advice or insights — just trying to approach this smartly.
Thanks!
Do NOT do this. This is a terrible idea. You WILL lose money with this strategy.
Hurst Real Estate, INC4.986 Reviews- Member since 2018 · 8 posts · 7 votes1yThanks Jay yeah I’m not going to thank you for your comment
Quote from @Jay Hurst:
Quote from @Alexsis Venable:
Hey everyone,
I’m considering selling my primary home in South Jersey (worth ~$360K, owe ~$248K) and using roughly $85–90K in equity to start investing in Section 8 rentals.
My goal is to create long-term cash flow and gradually scale to multiple properties using a BRRR-style strategy.
I’m currently looking at Cleveland, Huntsville, Birmingham, and Memphis for affordability and rent potential.
A few questions for experienced investors:
- Which of these markets are still strong for Section 8 in 2025?
- Any pitfalls to watch for when buying out of state?
- Would selling my home and starting this strategy be wiser than renting it out?
I’d really appreciate any advice or insights — just trying to approach this smartly.
Thanks!
Do NOT do this. This is a terrible idea. You WILL lose money with this strategy.th
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes1y
Quote from @Alexsis Venable:
Hey everyone,
I’m considering selling my primary home in South Jersey (worth ~$360K, owe ~$248K) and using roughly $85–90K in equity to start investing in Section 8 rentals.
My goal is to create long-term cash flow and gradually scale to multiple properties using a BRRR-style strategy.
I’m currently looking at Cleveland, Huntsville, Birmingham, and Memphis for affordability and rent potential.
A few questions for experienced investors:
- Which of these markets are still strong for Section 8 in 2025?
- Any pitfalls to watch for when buying out of state?
- Would selling my home and starting this strategy be wiser than renting it out?
I’d really appreciate any advice or insights — just trying to approach this smartly.
Thanks!
Cleveland is very strong for Section 8. For more info on the Cleveland market you'll want to take a look at The Ultimate Guide to Grading Cleveland Neighborhoods.
Quote from @Alexsis Venable:
Hey everyone,
I’m considering selling my primary home in South Jersey (worth ~$360K, owe ~$248K) and using roughly $85–90K in equity to start investing in Section 8 rentals.
My goal is to create long-term cash flow and gradually scale to multiple properties using a BRRR-style strategy.
I’m currently looking at Cleveland, Huntsville, Birmingham, and Memphis for affordability and rent potential.
A few questions for experienced investors:
- Which of these markets are still strong for Section 8 in 2025?
- Any pitfalls to watch for when buying out of state?
- Would selling my home and starting this strategy be wiser than renting it out?
I’d really appreciate any advice or insights — just trying to approach this smartly.
Thanks!
Since you are moving out of your home, rent your current home out for a year or two and see how it goes. You'll still get the favorable tax treatment as long as you sell it less than 3 years after moving out. Renting one property by yourself will teach you something about what you are doing before you jump in the deep end in the hardest real estate investment (out of state section 8).
You are at LTV of 66%, typically you wouldn't really start looking to cycle your investment (either cash out or sell and 1031) until you hit close to 50-60% anyways so waiting a year or two to get there makes sense. Your real cash flow (and total returns) will likely be better on your current property than if you sold and bought 2, but you need to run the numbers yourself. I would assume atleast $500/mo in expenses before property management. On Section 8, that will be close to 15% of rent (after you account for releasing fees).
Best of luck.I would keep it and rent it out for a few years, selling before the section 121 cap gains exclusion tax benefit expires. This will be so much better than buying section 8 rentals in bad (inexpensive for a reason) locations.
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