All Forum Posts by: David Epstein
David Epstein has started 17 posts and replied 45 times.
Post: Low Section 8 rent question
- Brussels, Belgium
- Posts 52
- Votes 22
Thanks again, all, for your thoughts and feedback.
The rent has increased annually, but there is a delta with fair market rates ... so I am in conversations with the PM co about forward planning.
Thanks again!
Post: Low Section 8 rent question
- Brussels, Belgium
- Posts 52
- Votes 22
@Cory J Thornton: much appreciated! Great overall thoughts! I did reach out to my management company and they are looking into an increase. When I have some free time I may do some personal investigating to see what I can propose to my management team moving forward. Just closing the delta by $100 would go a long way to bringing me back to net neutral cash flow after the cash out refi and a year or two of future increases should bring me back to positive.
thanks again!
Quote from @Cory J Thornton:
@David Epstein - I have a few properties I manage that are on vouchers. I sign one year agreements on a property so I have a chance to renew that voucher agreement every year. Housing programs are desperate for landlords that will take a housing voucher. The last time I talked to the local section 8 office, they had 93 people approved for a three bedroom in my county, but nowhere to put them.
It takes more work than a normal renewal, but every single year I negotiate a rent increase with the section 8 office. On two of the properties I manage, we have maxed out what the housing voucher would pay, and then the tenant simply has to make up the difference out of their own pocket. This keeps the property much closer to market rates. In one case that means the tenant is paying around $20 a month to live in the home and at the other property the tenant is paying $200 a month to live in the home. We took over both of these properties in 2022 and they were leased significantly below market value. Now they are at market rate or just below, and the majority of the rent very month still comes from the voucher.
Every single year the section 8 office has a guideline on what they will pay for a 1, 2, 3, 4, and 5, bedroom home. Every year the amount they are allowed to issue in the form of a voucher, is increased. Getting the increase on an existing voucher property takes time, so I usually try to start that conversation a good 90 days before the end of the lease term to make sure we max out the voucher payment, based on the number of bedroom for that year.
I don't know if this changes at all from state to state, but that is how I've been running our properties on vouchers in NC.
One last thought, there are at least two BP episodes where an investor from DC is interviewed. I learned a ton from those episodes since his business model is based on section 8 properties. It may be worth searching some old content to see what you can find.
Best of luck on these properties and your investor journey!
Post: Year end letter or gifts to tenants
- Brussels, Belgium
- Posts 52
- Votes 22
Friends,
What a great thread / discussion to begin - thanks!
I don’t send anything out annually - however I just sent a small gift card as a gesture for a tenant who has been with me five years in the same property.
I agree it can blur a line, especially if you are in-person managing (I am long distance via property managers, so just a guess).
Providing a great place, responding to concerns, making repairs, etc is a win-win for your property and your tenants.
Post: Low Section 8 rent question
- Brussels, Belgium
- Posts 52
- Votes 22
Friends,
I have had a section 8 tenant for the past five years and have to say they are fabulous tenants. However, the rent has regularly been below what comparable properties in the area go for. With recent inflation / rent rises, this disparity has only grown.
my question: considering I am very happy with this tenant and the fact that they are likely not going anywhere (taking account of no vacancies for foreseeable future) what are my options to see a rent increase (I use a property management company I am very happy with and which is very responsive).
I should add: having this tenant and being able to provide a good home is part of why I got into investing. I am not looking to squeeze every penny out, but hoping to have a more profitable property in order to grow my portfolio to continue doing well by doing good.
thank you as always for the great support I always find here and hope 2023 provides great things for everyone!
Post: Section 8 stability / piggy-back
- Brussels, Belgium
- Posts 52
- Votes 22
Investment Info:
Single-family residence buy & hold investment.
Purchase price: $103,000
Cash invested: $25,000
Great, well-maintained single family house with a long term section 8 tenant that takes pride in their residence. Great relationships with property management company and the tenant that has helped maintain value and enjoy appreciation while receiving positive cash flow. The property has become an ideal "piggy bank" for cash out from time to time to purchase additional properties.
What made you interested in investing in this type of deal?
I live overseas and travel / transfer quite frequently. As such, turnkey at the time was an ideal option given the demands on my time and my relative inexperience. Lower entry point to the market and the market met my criteria: diverse private-sector economic opportunity, military presence, millennial growth / presence.
How did you find this deal and how did you negotiate it?
Roofstock. I was one of their earlier clients. Would use Roofstock again for the right property.
How did you finance this deal?
conventional 20% down.
What was the outcome?
solid cash flow and appreciation.
Post: Missing documentation for depreciation details
- Brussels, Belgium
- Posts 52
- Votes 22
All,
Huge thanks for the swift support. I was able to pull most of the info from public records and the purchase docs, but I cannot for the life of me find the info for one property that is a coop unit in a building in NY State purchased back in 2005. Will keep working at it and see what I can scrape together.
Thanks as always to the BP community for the huge help!
Post: Missing documentation for depreciation details
- Brussels, Belgium
- Posts 52
- Votes 22
Friends,
As I continue in this journey (and thanks to all who continue to motivate and inspire me to keep analyzing deals and educating myself) I have made the move to a professional CPA to help manage the modest but growing portfolio.
Question: I do not seem to be able to locate all of the documentation they are seeking to help with the depreciation. Any advice? One property was purchased nearly 20 years ago, the other two more recently, but I move A LOT and do not always have all my records at my disposal. Any advice is greatly appreciated!
Post: Overseas (military, foreign service) taxes
- Brussels, Belgium
- Posts 52
- Votes 22
Friends,
I live overseas much of the time as part of government service. I am hoping to find a good accountant / CPA to discuss doing taxes in the future who understands both real estate investing and the various aspects of government employment (Home Leave, TSP, etc).
Any guidance or intros would be greatly appreciated!
I hope you are all well! Thanks!
Post: Florida vaca & South Carolina / Alabama SF rentals
- Brussels, Belgium
- Posts 52
- Votes 22
Thanks again!
-D
Post: Florida vaca & South Carolina / Alabama SF rentals
- Brussels, Belgium
- Posts 52
- Votes 22
Friends,
I hope all have remained safe and in good health this past year and enjoying a great start to 2022!
My wife and I are considering taking a few weeks to visit various parts of Florida to scope out possible vacation homes, which we would also like to rent out when not in use.
Ideal conditions:
a community with nice, but not overwhelmingly crowded beaches (at least not during peak times of year)
walkable (at least in a core, commercial, cultural area).
Additionally, we have lately been looking at the Columbia, SC area as well as both Montgomery and Birmingham, AL for SF rentals. We have a few SF rentals scattered around the country and would love to hear thoughts on great zip codes and why.
Any thoughts welcome!