All Forum Posts by: Kevin Siedlecki

In CT, there are no additional fees associated with accepting Section 8.  There is one annual inspection that is free for the landlord.  And your other argument is you don't want to make repairs?  If Section 8 says the apartment is not in good enough condition, you can just say "no" to the repairs they want you to make.  Good luck renting that on the open market, though. 

 No question some on Section 8 are trouble, but overall, I have had great experiences with Section 8 tenants.  It helps the overall experience that for my tenants, the state pays between 60-95% of their rent for them, so I know I'm getting that check on time, but there is more to it than that.  Section 8 performs annual inspections to keep the tenant and the landlord accountable to the condition of the unit.  Since I do things right, I welcome those inspections, and my tenants are terrified of losing their vouchers, so they keep the units in excellent condition.  I plan to post a blog about Section 8 soon, but it will be a couple weeks from now. I will reply to this thread when I do.

My understanding is that you cannot say "no" to Section 8 tenants just because they have Section 8, and you definitely can't advertise that you don't accept it. That does not mean you are obligated to rent to a Section 8 tenant just because he or she wants the place.

You can say "no" if they fail to meet your other criteria, such as credit score and criminal history, or because you are going to get higher rent from a market tenant. I have multiple Section 8 tenants, and have had a great experience with the program.    

I agree.  I have no problem making lots of connections here, but since the whole point is that this is a professional network with national reach, and few of us know each other off the site, a short introduction is appropriate and necessary when sending a colleague request.

They definitely got you from every angle.  How did you pay for the mortgage broker?  Usually their fee is in a line (or in your case, it looks like 4 lines) of the closing document.  I am not familiar with the pest inspection or survey fee; those have never showed up for me.  However, if those two lines are for an inspection of the property performed by someone for the bank, then the costs seem right.  Did you pay an inspector as well?

Sell the truck and get something cheaper.  If you're serious about setting yourself up financially for the future, you need to make some sacrificing now. A vehicle that expensive is holding you back. 

If you and the calculator are that far off, take a look at my blog post about understanding the numbers: http://www.biggerpockets.com/blogs/6815/blog_posts...

Bird's eye rule of thumb math on this property is about 20% cash on cash.  Is that what you got?  That would be a good investment, but you need a lot more details to decide how closely this specific property lines up with those assumptions.

I like @Gabriel Perez's angle, and if you had a higher return after the 5 year paydown, I would say it's worth a look.  My problem is that the $450 doesn't seem like great cash flow, especially on 10 units.  Did I miss something? That's $45 a door, not $90.  The other consideration is the age of the buildings.  It only takes a couple surprises to eat away at that margin.  

Bottom line, you need much higher income to make this deal work.  As many have said, the utilities would make that difference.

@Brandon Miller.  I posted a blog about understanding the numbers earlier this week that might help you uncover where your problem is.  Here is the link if you are interested: http://www.biggerpockets.com/blogs/6815/blog_posts...

On such an inexpensive house, that $55/unit makes sense.  That's $200 a month (an infinite return on the 0 you put down).  To check your analysis, let's say you put 25% down. . . on 85k that's 21,250.  Your mortgage would be about $100 less, giving you a $300/month return on your investment.  Let's say your total acquisition cost is $25,000 after closing costs: you're still making 14% cash on cash.  That's not terrible.  

The problem is, big ticket expenses like roofs, furnaces, and driveways don't change much whether you're putting them in a $85,000 lot or a $200,000 house, so they eat more of your bottom line on a cheaper property.  The other thing to consider is all the separate buildings need separate furnaces, hot water heaters, etc.  In an area where you're paying more and charging more (or at least charging more) you can absorb those expenses without killing your return.

Unless you are in a really tough rental market, say no to both and step up your marketing to find better tenants. 

I almost posted that just based on the title... but reading the post confirmed my suspicion.  Be careful, though.  What is the mom's credit score?  Is it below your standard?  Send 1 a letter saying that they do not qualify because of credit history or score.  Send 2 a letter saying they do not qualify because your policy states that tenants must have a clear eviction history.  

Most importantly, have a policy and stick with it!  Easy suggestions are 3x rent in income (unless subsidized by a gov't program), 600+ credit score, and clean criminal history with no evictions.