Section 8 Voucher Redemption

[Natan Gutt]

Hi,

I am looking to start investing in section 8. I have a few long term rentals in Minneapolis and looking to find the right city to start in. I was getting locked in to start in Cleveland when the agent I was working there said that you can never redeem the full amount of the voucher because it’s always higher then fair market value of the rent.

For example. 3b 1bth house voucher is roughly $1,550, but the rents get no where near that much apparently and cap at around $1,300.

Is there a city that people do section 8 in that has houses for 100k close to turn key and also are high enough rents to match the voucher and take full advantage of that amount?

Thank you ahead of time for your help

[James Hamling]

Quote from @Natan Gutt:

Hi,

I am looking to start investing in section 8. I have a few long term rentals in Minneapolis and looking to find the right city to start in. I was getting locked in to start in Cleveland when the agent I was working there said that you can never redeem the full amount of the voucher because it’s always higher then fair market value of the rent.

For example. 3b 1bth house voucher is roughly $1,550, but the rents get no where near that much apparently and cap at around $1,300.

Is there a city that people do section 8 in that has houses for 100k close to turn key and also are high enough rents to match the voucher and take full advantage of that amount?

Thank you ahead of time for your help

Why not looking right here in own back yard? 

I don't want to say too much on public forum but, MN is high income state, which makes for some of highest median incomes in US, which makes for some of the highest paying sec8 in country..... 

Is it possible to hit 2% in MN sec8, yes it is. Meeting 1% rule is an expected MINIMUM, FYI. 

And NO, I am NOT talking Minneapolis/ St Paul, hell to the no-NO! I mean sure, plenty do great in those sec8 pizz-ponds but "affordable housing" is in EPIC demand all over, and there IS far FAR better markets for one to start playing in then that. 

If do research on sec8, learn how it works, how the payment standards work etc., it should come very clear very fast where the big opportunities are. From there call the sec8 authority in that area and ask if they need more properties, and prepare for the laugh. The biggest problem is filtering the 100 or so applicant's per week. 

As for getting less then payment standard calculation, that stands true in theory. Here in MN, every market I have "played", I've never seen it nerf'd down from payment standard calculation. 

I have seen "noob's" have issues with, say, a 5br home and trying to get that payment standard from a 3br voucher holder. So again, do your research to learn the ropes of the rules & reg's. Yes, those 7br homes look to be insane cash-cows, and they would be IF, if you can find an approved 7br voucher holder, which is very rare. 

But again, your backyard out performs anything I've ever seen/heard of for anywhere Ohio, in sec8 strategy. It's not too hard to net $1kmnth per unit in MN in this strategy, in OH, good luck. Sure, the % is similar, but on much smaller $'s, that's the difference. 

And let's be smart, would ya rather go where every a-hole from around the country is going to produce more rental inventory, or operate where supply is still insanely constrained?