All Forum Posts by: Michael Hayes

Got this from a property manager friend just incase anyone was wondering for the Memphis market. 

"We don't provide stove or refrigerator, when we fill out the RTA we put on it T for Tenant supplied so there is no need to inspect it."

Quote from @Michael Smythe:

@Michael Hayes you should discuss this with the S8 office handling the inspection.

Most HAP contracts require a landlord to supply the fridge & stove, NOT the tenant.

Violations of the HAP contract may lead to rent abatements and even banning of the landlord from S8 program (usually only with that specific Housing Agency).

Thank you.  Here its not a requirement for the landlord to do.  Making the inspection as seamless as possible without me providing them was my only concern, but I'll definitely be reaching out to the office. Appreciate the input.

Quote from @Andrew Postell:

@Michael Hayes what has your local HUD office said about this? I completely leave this up to my property manager. Speaking of....@Kyle Mccaw what do you think here?

Going to contact them tomorrow.  Usually my property manager would handle this also, but my Wife and I decided to build out a management company starting with this one. I'll be going back to old PM for some advice also, but wanted to get some Biggerpockets input for discussion sakes.

Hey guys got a question for you.

I'm taking a shot at a Section 8 rental and we're in the last week and a half of the rehab.  I won't be providing appliances but I know that for the section 8 inspection, part of that includes inspecting a working refrigerator and range.

When I did Section 8 a couple of times years ago, I was sure the houses would pass or only need minor fixes depending on the inspector that I got, but I let the tenant move in right before the inspection so that their refrigerator and range could already be in place and be inspected.  This went smoothly, but I'm a bit wiser now and don't want to risk doing that.

How are you guys passing the inspection if you aren't supplying the appliances, but without letting the tenant move in first with their own appliances?  I'm seeing other section 8 listings in the area mention that the tenant is responsible for their own appliances, so I feel like I'm missing a simple solution here or is it possible that section 8 would do the inspection, pass, and just inspect the tenants appliances later?

Help me out here.  Sure I'm over thinking it.

Hey everyone,

I feel like I'm late to the party with AI.  I was running an sms campaign through an overseas assistant, but I've been researching AI sms marketing platforms that actually handle conversations from beginning to end, qualifying and disqualifying leads.  Does anyone have any experience with a good program and can recommend one?

Any other good recommendations for other ways to market using AI also appreciated.

Quote from @Ryan Swain:

Michael, 

Going back to your original question, have you figured out how to maximize those rents? Are there certain property management techniques or companies to go with that deal strictly or a large portion of their business towards S8? 

Ryan 

I've dealt with DCC Rentals here in the past and the owner Derrick Craig is really good with section 8.  I'm combining some advice from him and a few other people.  A common theme I'm seeing is to just request to see the applicant's voucher to make sure it is the amount that you are looking for.  We have a website here also Tnpublichousing.com that is the recommended housing search website that voucher holders are encouraged to go to when looking for S8 friendly housing.  I've seen at least one guy that I sold a house too a few months ago list a 4 bedroom on there, and he just listed it at the fair market rent.  I would imagine he got that or above, but I didn't get a response from him when I reached out to ask.

For me it's basically just going to be trial and error, but I'm going to use those tips and just ask questions as I run into problems.

A win is a win!  Congrats on solid cash flow.

Quote from @Phil Petite:

Quote from @Ryan Swain:

Quote from @Michael Hayes:

Quote from @Alex Green:

If you read the small print (towards the bottom) of the page that shows the FMRs, 5 bedrooms are 15% more than 4 bedrooms. It's standard HUD terms:

"The FMRs for unit sizes larger than four bedrooms are calculated by adding 15 percent to the four bedroom FMR, for each extra bedroom"

Also, Steven is giving you some good insights. I had a property not qualify for a loan because market rent per the appraiser was much lower than Section 8 rents, which killed the DSCR Ratio. So you have to be aware of that. Lenders (sadly) only look at market rent from the appraisal. Even with a tenant in place, the lender for DSCR purposes will only go up to 110%-120% (depending on lender) from market rent.

 You're right I see the additional bedroom info now.  Appreciate all that info.

 Michael, 

Did you ever decide to purchase in Memphis using S8? How did it work out? I would love to hear about your experiences if so. Or from anyone else following this thread. I have a 3 bed and am thinking of S8 in Memphis. Thanks, 

Ryan Swain 

Hi Ryan!

I have two SFH rentals in Memphis (38127 and 38114), and both are 3Brs. One rents for $1100/month and the other for $1250/month. It was fairly easy to find the tenants (the 2nd one that I purchased already actually had a tenant in place!). Hopefully this was helpful! :)

Were those the total voucher amounts? From the feedback that I'm getting the vouchers for a 3 bedroom are pushing more than that. A couple of mentors mentioned that they are getting FMR or more out of their section 8 tenants.

Quote from @Ryan Swain:

Quote from @Michael Hayes:

Quote from @Alex Green:

If you read the small print (towards the bottom) of the page that shows the FMRs, 5 bedrooms are 15% more than 4 bedrooms. It's standard HUD terms:

"The FMRs for unit sizes larger than four bedrooms are calculated by adding 15 percent to the four bedroom FMR, for each extra bedroom"

Also, Steven is giving you some good insights. I had a property not qualify for a loan because market rent per the appraiser was much lower than Section 8 rents, which killed the DSCR Ratio. So you have to be aware of that. Lenders (sadly) only look at market rent from the appraisal. Even with a tenant in place, the lender for DSCR purposes will only go up to 110%-120% (depending on lender) from market rent.

 You're right I see the additional bedroom info now.  Appreciate all that info.

 Michael, 

Did you ever decide to purchase in Memphis using S8? How did it work out? I would love to hear about your experiences if so. Or from anyone else following this thread. I have a 3 bed and am thinking of S8 in Memphis. Thanks, 

Ryan Swain 

 I'm working on rehabbing one now.  It'll either go section 8 or another route that I'm getting some information on for a company looking for housing providers.  I'll be able to inform more in the coming weeks.

Quote from @Christian Ehlers:

"The Book on Managing Rental Properties" by the OG podcast host Brandon Turner. I also liked "Landlording on Auto-pilot" which had some great tips to systematize the business, save you time and more. 

Thank you. Will check those out!