All Forum Posts by: Jon K.

I'm assuming by landlord package you mean he submitted the RTA (request for tenant approval). If that is the case then yes, he can still choose to rent to someone else. The process usually goes like this:

Rental Listing -> Landlord and Prospective Tenant fill out and submit RTA -> Voucher office performs Affordability Study -> Landlord approves estimated rent amount -> Property Inspection -> Approval of Property by Voucher Office -> Lease & Move-In

The section 8 process in/around Baltimore and Baltimore County does take a long time these days. It was almost a two month process the last time I went through it (and now three months after the tenant moved in I still haven't received my first subsidized payment). It can definitely be frustrating.

One thing I'd encourage your friend to keep in mind is that the tenant is a person and their housing depends on this process. They can only submit their voucher for one property at a time. If your friend is going to find another tenant, they should let the original tenant and the voucher office know right away so that they can get back to looking.

About half of my portfolio are voucher tenants at the moment. I will tell you from experience that the squeaky wheel gets the grease in this process. Calling frequently and being respectful when you do so goes a LONG way to speeding things up.

1 Vote

Baltimore, Maryland

Move on. A single bad tenant will cost you thousands to tens of thousands of dollars. You need to have standard screening criteria and apply it consistently. If you can't get all of the information you need to screen properly, which should include positive past rental references, then it's a pass.

1 Vote

San Antonio, Texas

Quote from @George Red:

@Nathan Frost I'm one of those boring long term hold guys... I've had some section 8 but don't base a full on strategy around it. All the section 8 I've had were inherited tenants. One hoarder, some drug use on site and one perfectly fine... batting 33%. Cant speak to your other options.

I have a roughly 50/50 voucher vs market tenant split in my SFR portfolio. My experience overall is that the average quality is about the same. You screen voucher tenants like you would screen anyone else. That can include a site visit to their current home to see how they take care of the place (assuming they have one, we've had a few come from homeless shelters). Pros and cons to everything. The subsidized money is nice because even if the tenant stops paying their portion you're still getting something. But the voucher program can also decide to stop paying for some reasons and there's not much you can do about it.

0 Votes

Wichita Falls, Texas

Quote from @Nathan Frost:

Quote from @George Red:

I echo what @Jon K. said... if you're still interested after doing some additional due diligence, try starting with 1-3 as opposed to jumping into 10. You may not like the space so it may be better to put your foot in the water first. Also, as you're meeting this person through IG I would be sure to have all legal precautions and real estate attorney in place for transactions as you don't know this person from a hill of beans. Can they provide examples of clients they've worked with before, how do you know they're legit... all the things.

- G

Agree. Just would need a mentor. But sounds too good to be true. Section 8, STRs, or Padsplit. Which is best?

Best is subjective, based not only on you but on the property and the market. You'll have to answer that on your own.

0 Votes

Wichita Falls, Texas

Market dependent, section 8 can pay more per month than a cash paying tenant. Also market dependent, section 8 tenants can sometimes be rougher on your properties or expect more maintenance which reduces that cash flow figure. There are also annual inspections you have to pass where you may have to do repairs that you wouldn't normally have to do. And vacancy rates may also increase because of the amount of bureaucracy you have to go through to place a new tenant.

So again, a lot of variables. Is it possible? Sure. Can you personally get that right now? No clue, underwrite some deals and find out.

https://www.affordablehousing.com/ is a website dedicated to section 8 rentals and may provide some insight as to what you can expect to get in your local market.

0 Votes

Wichita Falls, Texas

Quote from @Nathan Gesner:

Here's some basic investor education to get you started:

1. Start with BiggerPockets Ultimate Beginners Guide (free). It will familiarize you with the basic terminology and benefits. Then you can read a more in-depth book like The Book On Rental Property Investing by Brandon Turner or The Unofficial Guide to Real Estate Investing by Spencer Strauss.

2. Get your finances in order. Get rid of debt, build a budget, and save. The idea that you can build wealth without putting any money into it is a recipe for disaster and the sales pitch of gurus trying to steal your money. A wise investor will not try to get rich quick with shortcuts. If you can't keep control of your personal finances, you are highly unlikely to succeed in real estate investing. Check out my personal favorite, Set For Life by Scott Trench , or The Total Money Makeover by Dave Ramsey.

3. As you read these books, watch the BiggerPockets podcasts. This will clarify and reinforce what you are reading. You can hear real-world examples of how others have built their investment portfolio and (hopefully) learn to avoid their mistakes.

4. NETWORK!!! Get out of your comfort zone. Stop hanging out with your deadbeat buddies that spend all day drinking, talking sports, and otherwise wasting away. Go to BUILD YOUR TEAM at the top of the screen and look for local investors or meetups in your area. You can also find real estate investing groups through meetup.com, facebook, or a Google search. Birds of a feather flock together!

5. Now you need to figure out how to find deals and pay for them. Again, the BiggerPockets store has some books for this or you can learn by watching podcasts, reading blogs, and interacting on the forum. A handy search bar in the upper right makes it easy to find previous discussions, blogs, podcasts, and other resources. BiggerPockets also has a calculator you can use to analyze deals and I highly recommend you start this as soon as possible, even if you are not ready to buy. If you consistently analyze properties, recognizing a good deal will be much easier when it shows up. Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice. It doesn't take long to learn how to spot a good deal.

6. Study the market. You can learn to do this independently or get a rockstar REALTOR to lead the way. I highly recommend a well-qualified REALTOR who works with investors and knows how to help you best.

7. Jump in! Far too many get stuck in the "paralysis by analysis" stage, thinking they just don't know enough to get started. You could read 100 books and still not know enough because certain things must be learned through trial and error. You don't need to know everything to get started; you need a foundation to build on and the rest will come through experience and then refining your education.

You can build a basic understanding of investing in 3-6 months. How long it takes to be financially ready is different for everyone. Once you're ready, create a goal (e.g. "I will buy at least one single-family home, duplex, triplex, or fourplex before the end of 2019") and then do it. Real estate investing is a forgiving world; the average person can still make money even with some big mistakes.

This is a great post. I’m saving this to refer folks to.

0 Votes

New York City, New York

Quote from @Corey Conklin:

Worked for a maintenance crew for a big developer in college that managed his properties in house. I saw first hand how crazy people can be and what crazy maintenance issues can pop up in the worst times of the night. Since college I've worked as a commercial construction PM in different parts of the country. That more than prepared me for managing my own properties.

Biggest mistake? Thinking that going in to business with family was a good idea. Also renting to family or friends. Don't be like me and do this, it rarely goes well.

Did both of those. Never again on either count.

0 Votes

Quote from @Alex Ferranti:

@Mitch Messer thank you for your reply, the repair budget is what I'm struggling with, I was thinking about bringing a contractor when I walk a house. Do you have any advice for using the pictures provided? I am a relator so I can do the ARV on comparable homes. Thank you again.

Contractors won't want to walk houses with you that you're not going to buy whether you have them under contract or not. And even if they were, it would be a waste of everyone's time. The reason is your scope of work will not match that of the people who will take your assignment. Each investor who evaluates your deal will have their own plans for it in terms of rehab & contractor pricing. These will vary by thousands of dollars if not tens of thousands. That's kind of good news for you because what it means is you just need rough ballparks that don't have to be super accurate because you're using those ballparks as a means to negotiate a price with the seller. Within a few thousand for a generic rental rehab and again as a generic flip rehab is probably fine.

My advice here is to use your network: find folks who are doing a lot of renovations for flips and/or rentals and ask them if they'd share some numbers for you for recent projects. Get a feel for the big stuff and just pad your numbers.

2 Votes

Worcester, Massachusetts

Quote from @Brandon Elliott-Pandey:

Though my years of hiring trades to work on my rental and friends/ family/ clients properties I have had it good and bad experiences. Property managers that over promise, work not fully completed to satisfaction, things not being installed correctly, etc. Again.... from professionals I haven't met and friends whom I know personally that run their own companies...

I am curious, what is your policy on hiring friends (whom own their own companies) to work on your properties? Do or Don't and why?

Never again, apart from friends who are friends because I met them through hiring their company.

2 Votes

Denver, Colorado

All Forum Posts by: Jon K.

Jon K. has started 53 posts and replied 540 times.

Post: Anyone ever use carpet squares for rentals?

Post: Section 8 in Maryland

Post: Screening for voucher housing

Post: Section 8 Investing

Post: Section 8 Investing

Post: Section 8 Investing

Post: Having trouble understanding where the profit is

Post: How did you learn to manage your rentals?

Post: Wholesaler looking for renovation quote help

Post: Your Policy on Hiring Friends???