Section 8 vs. Househacking a Duplex or Triplex

[Jack Lindstrom]

I am 23 and have saved up enough money to start my RE journey. I want to start out in househacking a duplex or a triplex but I am concerned with the interest rates on such a big investment for my first property. Alternatively, I have been researching going into section 8 to get my feet wet. This would require a much smaller downpayment & interest would not be nearly as big of a deal for these small single-family homes. 

I am currently paying $1700 in rent and I despise paying rent, especially being in a financial position where I can afford to build equity in some manner or get a cashflowing asset to offset it. 

My biggest hurdle with section 8 is finding a turnkey property that doesn't require a ton of renovations. I don't have a network of contractors or real estate investors in general to ensure the numbers make sense. Is it possible to find a single-family house for around 100k that is compatible with Section 8 standards? Everything I see online talks about required renovations to make the numbers work for these properties. 

[Jamie O'Connell]

Quote from @Jack Lindstrom:

Quote from @Jamie O'Connell:

What area are you in? I have multi families that I have all section 8, I also have some where 2 are regular tenants and 1 is section 8. 

I’m in Chicago. Looking to purchase in the suburbs though. ReallY open to anywhere as I’m self employed. This also means I’ll Prob be looking at dscr loans as well bc not having w-2 history can be an issue I’ve heard 

How have your experiences been with section 8 in multi family & in general? Most of the research I’ve seen is finding single family homes to renovate and lease to section 8, not multi family units. 

Chicago should have some good ones for cheap. I’m in Upstate Ny and most of the section 8 are multi families like I have. Duplex, triplex and quad plex. 

i have had good luck with section 8. It’s the non sec 8 tenants I have problems with such as not paying rent and such. I do have one sec 8 tenant who doesn’t ever pay her portion of $50 a month but after 8 months I complained to the local director of sec 8 and she spoke to the tenant and got that taken care of. They threatened to kick her out of the program I believe. 

I will say with section 8, less is more but make sure everything is in good order. I go in and renovate all my properties to make sure it looks nice and is someplace I would want to live. But I take out the dish washers, the washer and dryer, all ceiling fans (switch to dome lights) and garbage disposals. Because if they are they and break you have to replace. But if they aren’t there it doesn’t stop it from being sec 8. 

I am also self employed and only have one year tax return non w 2 so I also did dscr loans for first few and then fix and hold loans. But I would suggest the fix and hold loans after you’ve done a few because you learn a lot in first few purchases.