All Forum Posts by: Jonathan R.

In my final year or two of college I got a real estate license and joined a brokerage in the town of my school. I have since let the license go but really learned a lot in the few deals I did do as a real estate agent. I used to search the mls low to high to see what was out there. I now am an investor and fairly confident in my ability solely based in my background as an agent. Let's say you only sell a couple houses a year in college and make $3k-5k a year, that is great beer money! :) More importantly, you'll be in the business.

You can have them fill out the application at the residence they currently are staying at and offer to pick up the application at their home. You can see how they are currently living. You can see if they have a bunch of junk in their car. I have a Section 8 tenant and he has been great. When you buy your investment property design it to your local Section 8 standards. They will likely have a few things they point out that you missed and you'll get it fixed and they'll pass you. Once a year they do inspect again and you may be asked to fix minor things, if your tenant has caused the things that need to be fixed you can elect not to fix them if you choose and they will have to move on. I would think it is in the Section 8 tenant's best interest to take care of the property if they want to stay in the program. If your property is nice, they will want to stay. The guy we selected receives disability income and does not work, we went with him because we wanted a tenant long term and thought he provided a good chance of us achieving a long term renter. We did not do a credit check. Section 8 pays $629 of this person's rent and he pays $46. I would like him to pay the $46 but ultimately it isn't that big of a deal. If he wants to stay in the program, he'll pay it.

Many may not agree with this but I would put the loans on a 25 year type of program (graduated or interest only or the plan that looks at your income) for about 4 years and buy dirt cheap investment properties for less than $40,000 all in (so 30k purchase price or lower and 10k to rehab or less) and rent the properties for north of $675 a month. Think it isn't possible? I just did it. In about 4-6 years buying 1 property a year with rent saving (you may have to borrow from a credit union/someone to help with the next two-three purchases) you will have enough snowball rent coming in to buy 1 or even two a year, pretty soon you'll have money you don't know what to do with so switch to paying the loans to full term and aggressively get rid of the debt. Good luck!

If you have anything negative on your credit report pay it in full or settle it for 40 cents on the dollar roughly and go to Google and type in "Transunion Dispute, Experian Dispute and Equifax Dispute" and go to all three pages. Select the line item and choose something like "not mine, paid." It takes about thirty days but typically the creditor won't reply if there is nothing owed so it gets cleaned from the credit report. Good luck!

Jon

I went with someone that I thought had potential to be a long term tenant. The person selected is 50 years old and on disability. No real criteria per say. Section 8 pays $629 and he pays $46. When the tenant turned in the voucher section 8 ordered the inspection. I will say it is important to make sure section 8 is moving you along from one process to the next. They are comfortable letting your call go to voicemail and many times not returning it. We emailed, called occasionally, and drove to their office if no replies for days. Section 8 does not pay the deposit. We charged $600 as the house is nice, some landlords only charge small amounts like $150. We wanted more skin in the game, we have let him pay it in two months, $300 each month. This is the first year so not rent raising yet, we do intend on raising rent to keep up with the market. Section 8 will entertain up to 5% a year in my area.

@Malcolm Dixon best of luck to you on your deal. I had no connection to section 8 housing prior to doing the deal. Looking at the area I bought in I figured a paycheck from the government would be best. I did not contact them ahead of time or during the rehab, I took an if you build it they will come approach. I knew they were slow in my area so when we were roughly three weeks away from being done with the renovation we listed the property on sections 8's website alone to secure a tenant. We got 254 hits in 48 hours and just told everyone we would meet with them on a Saturday in a 4 hour window and selected who we wanted. We failed two inspections for minor things like screens, peeling paint and outlets before we passed. It was frustrating that the processes with section 8 took so long but we didn't show them we were frustrated as we knew we will be working with them on future deals and needed to be friends; we shared some laughs with the inspector as he was failing us both times. I totally recommend section 8 on lower end properties, the steady paycheck is a huge piece of mind, now all we do is focus on keeping the tenant happy so he will stay, within reason. I hope that answered your question.

@Jared Viernes thank you for your reply! The renovation went fairly smoothly. We tiled the bathroom floor and shower, refinished the floors, fixed several leaking pipes, painted, and brought the house up to Section 8's standards. We used a contractor, he was a one man operation and fairly slow but affordable. He was recommended by a friend I work with that has a few rental properties. I think I'd use him again but there were certainly frustrations with having productive days/weeks as well as getting in contact with him.  We purchased at 13th and Hydraulic. 770 square foot home with a 2 car detached garage. We are self managing for now.

Hello all,

I have been a member for about a month and have been too afraid to throw out an introduction until now, it is time for me to jump in. Roughly five months ago I bought my first investment property and I'm hooked. I didn't discover Bigger Pockets until after I purchased the property and am learning that I took a bigger gamble than I thought I was according to Brandon Turner and many others. I bought a cheap investment property because that was all I could afford, and I barely could afforded it. I had to take out a $3,500 loan at a 25% interest rate to pay for unexpected rehab costs post a loan on my 401k and a 10k loan from my local credit union at an 8.5% interest rate. I'm 32. I bought in a D class neighborhood, the two bedroom 1 bath house is not surrounded by vacant houses but I certainly wouldn't call it a working class neighborhood. We decided to go Section 8. Today I got my first check deposited, I'm pretty happy about it and am bold enough to post today as a success story in low-end property investing as a newbie (be that dumb luck or what have you). We purchased the home in Wichita, KS in the inner city for 18k, we put 14k into it and it is rented for $675 a month. The home was very easy to rent as there is a huge demand for Section 8 homes in my area. I learned some lessons; always make sure the utilities can be turned on before the purchase, I had to have a weatherhead and riser put on the home to get electricity, there was a rough 2 grand lesson. I also put in a new hvac and furnace which I am glad I did as this home is a long term play. I got lucky because I saw if you are going to buy in a rough area that it is important to buy on the outskirts of the rough area, I did that by dumb luck as we are close to an interstate and on the fringe of the rough area.

I have caught the real estate bug and am thinking about getting a heloc on my primary residence which has about 25k worth of equity in it to buy another one in March of next year. I did start an LLC and will put the next one in the LLC name too. After purchase number two I'll have to navigate how to get additional financing through a commercial or portfolio lender or put a property in my personal name, looking for advise there as to which will be smoothest. I am hoping after four properties that the cashflow will snowball and I can keep buying at least one a year with no financing. I love the podcasts and the website, I have since read Rich Dad Poor Dad, The Millionaire Next Door, The Richest Man in Babylon and am about to start The Secrets of the Millionaire Mind. I think I am crazy enough to do a similar deal again post lessons learned. Thanks for having me.