All Forum Posts by: Marcos De la Cruz

Section 8 can be worth it if you have the right teams in place. 

Some general pros v cons - I'm sure other people will provide other insights as well

Pros: 
-Above market rents
- Monthly rent payment on time that you don't have to worry about or chase anyone down for (if full pay)
- No shortage of tenants depending on your standards 
- Tenants are incentivized to not trash/destroy the unit, otherwise they'll lose their voucher (Yearly inspections made by local S8 inspectors to keep everyone honest
- Rental payouts are normally adjusted 1-2 times a year to keep up with market rents

Cons:
- May take a little while to get onboarded - dealing with local govt can always take longer than expected   
- Generally won't have a super high credit score (to be expected given it's the govt paying for rent)
- Each unit will need to be inspected and meet a certain living standard in order to be approved for funding

You'll want to make sure you work with a property manager who has extensive experience in working with S8. They'll know what standards are needed and should be able to assist you getting units ready to go for the inspections. Mine makes it a set standard that each unit they touch MUST meet the section 8 minimum standard of requirements to widen their applicant pool. 

Happy to answer any additional questions & good luck with your investing. 

Hey @Marcos De la Cruz! What kind of "experience" are you seeking?

Your property is similar to mine in great Indianapolis suburb with good schools owned since 2013 - worth about $300,000 (possibly could get a little more if in a multiple offer situation), property tax $6249. My insurance is $966 so much less. I have a loan on mine (pulled out a cash out refi during COVID and used money to help pay for renovation to Bay Area rental). I've held onto it mostly because of the appreciation and great tenant.

My main goal with RE is using it as a store of wealth and passing it onto my kids.  If my main goal was cash flow, I'd sell all my properties, except one and put the money into index funds/stocks - cash flow has been great the past 3 years. Or start a business which would require a lot more time than owning RE.

If it were me and Dallas is appreciating, I'd probably hold onto it since you've had it since 2011. Really depends on your goals and individual situation. Definitely don't sell it and buy cheap Class C in Texas or other state for "cash flow on paper" - I learned a painful lesson with those types of properties. 

For a single-family rental (SFR) that's free and clear, meaning no mortgage, the acceptable minimum annual cash flow depends on your investment goals, location, and risk tolerance. However, a common benchmark is aiming for at least 6-8% cash-on-cash return based on your total investment (purchase price + rehab + closing costs).
Always factor in appreciation potential, tax benefits, and personal risk tolerance. In high-appreciation markets (e.g., CA), lower cash flow may be acceptable. In stable cash-flow markets (e.g., Midwest), aim higher.