OOS Section 8

[Frank Taormina]

I’ve come across an opportunity to purchase an existing occupied long-term rental package of not one, but TWO Section 8 properties. One tenant has been there for 6-7 years and the other (next door) has been there for 1 year.  The seller has 300+ projects in his portfolio and is looking to offload the smallest.  

A few potential red flags: 

1- This would be my first deal

2- Out of State

3- Section 8; this one is tricky. “Guaranteed” public assistance funding seems like it could be a gold mine, but not all that glitters is gold. 

Obviously, any offer would be contingent upon the inspection, appraisal, and confirmation of rental agreement/funding/etc.  

I live in a state where property is crazy expensive, so I have to look elsewhere to enter the market and think I’ve found a location with great potential upside for both cash flow and equity.  
Teach me oh wise ones! 

[Travis Biziorek]

There's not a ton of detail here but I'll do my best to answer some questions.

First, this isn't that unique of a deal. I only mention this because you seem excited about it as an opportunity. Point is... don't get FOMO.

In terms of Section 8... there are pros and cons. I have 3 doors rented to S8 tenants. For the most part I like the program. Where people get in trouble is when they buy crappy areas and expect they can put a S8 tenant in the house and be good.

That's not how it works.

Crappy areas attract crappy tenants.

I live in California but invest in Detroit, so I get where you're coming from. Would have to dive into specifics to know if it's a good deal or not.