All Forum Posts by: Matt Leber

@Priscilla Z. I definitely think it helps to have section 8 in the mix. I had one multifamily tenant in Jacksonville skip payment for 9 months...finally got him out due to holdover. That one’s now going on section 8 too! Good thing our other units up there propped it up.

We’ve had another house in West Melbourne where both tenants were restaurant employees and had their hours cut due to covid. They got unemployment for awhile but the process isn’t so clean anymore. They’ve been granted 3 months rent through the Brevard CARES act funding pool and it went straight toward paying their rent balance for Oct-Dec. They are all caught up now, but I am looking forward to having a few other s8 deals kicking in guaranteed rent to offset these potential impacts going forward.

@Greg Scott ended up closing on property 2 yesterday. The price dropped too much for me to look away and I was able to do 20% down instead of 25% which I was expecting. Have a section 8 tenant already interested and looks like everything is moving along well.

All, just an update here. I ended up finding an insurance company that would insure the 19 year old roof and the premium was very low. I will probably need to do it within the next 2 years but helps me hold on to my money a little longer. Closed on the property yesterday.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $100,000
Cash invested: $28,000

3 bedroom 1.5 bathroom single family buy and hold rental purchased in Melbourne Florida (Brevard County). Will rent for $1250 on the section 8 program. After setting aside half of margin for vacancy, capex and reserves it will cash flow $350 per month, bringing in 15% cash on cash return for the year. Doing more section 8 this year in my portfolio with potential covid moratorium impacts looming.

What made you interested in investing in this type of deal?

Pretty low out of pocket and low rates. Interested in picking up section 8 opportunities in current covid climate due to moratorium uncertainty.

How did you find this deal and how did you negotiate it?

Standard MLS

How did you finance this deal?

20% Downpayment conventional loan, saved from other rental profits and w2 job

@Tchaka Owen yes I was wondering if insurance had changed on this. I’ve done a deal like like 3x before and haven’t had an issue finding coverage before this one.

Hello BP community, I have a deal under contract in central Florida (Brevard County) that is a 2001 build with original roof. I’m seeking an insurance broker who can help me find a policy to insure this rental property, either with the current roof or with a re-roof done within 30 days after closing. I am open to either option.

Does anyone have a broker recommendation?

Thanks!

@Rachael Greene investing in multifamily on the west side of Jax. Let me know if you have any questions!

@Greg Scott thanks for the input. Actually, I’ve been researching the neighborhood for #2 and it seems habitat for humanity has been building and rehabbing homes in the area and the crime has come down quite a bit. It’s also near a historic arts district that has been coming up in recent years. Might have some gentrification possibility.

I have no idea what #1 looks like inside yet, I’m going tomorrow to check it out. It could need a lot or it could need a little. I had the same amount of capex/repairs put aside in my numbers for both properties (approx $210/mo). Might make sense to up the reserve for the older house.

Overall, I have been thinking about the fit for my portfolio. 6/7 of my rentals were built before ‘76, so it might be a better fit to add one that is a newer build, since I a plan to hold these for 30+ years.

I know some of you will probably tell me to offer on both properties, but....which one would you favor? I know numbers don’t usually lie, and they favor property 1 slightly. It’s just older and smaller and may be more maintenance. I’m likely going sec 8 either way.

Property 1:

$360/mo cash flow after vacancy, capex, misc repair reserves thru section 8. $35k invested capital at a purchase price of $90k (25% down plus closing costs plus minor repairs). B- neighborhood walking distance to high school. 3/1, but only 875 sq feet. Built in 1960 and may require some remodeling in the next 5 years. Remodeling likely inexpensive since it’s only 875 sq feet. Can get $1200 w sec 8. About 12% cash on cash.

Property 2:

$320/mo cash flow after vacancy, capex, misc repair reserves thru section 8. $42k invested capital at purchase price of $109k (25% down plus closing costs plus re-roof). C neighborhood but the property was remodeled in 2009 and is ready to go except the roof which we will replace. 3/1.5 1025 sq feet. Built in 2000 and will not need remodeling for some time. Can get $1250 w sec 8. About 9% cash on cash.

Which do you favor? They’re very similar numbers-wise.

@Ursula Leake Zillow is free to search properties. They only require payment if you list a property for rent on the site.