Section 8 Empire

[Brian W.]

Hello Everyone!

A little background - I make around $760/month working for a realtor (I give house tours and such).  I am 20 years old, and $20,000 in debt!  I wanted originally to buy a ~$150,000 house and rent out individual rooms.  I believe I'll have difficulty getting a downpayment and finding a bank to issue me the loan.

Here's my alternative plan - to find a cheap 3BR $50,000 house and rent it out through the HUD's Section 8 program. Googe's mortgage calculator suggests a $236/month payment, which is well below my monthly earnings. My Section 8 office's website suggests a $1,280/month reimbursement for landlords. That equates to over $1,000/month profit. Obviously a good amount of that would would go into repairs, but even 50% ($500/month) would be incredibly useful.

This seems almost too good to be true.  It seems that a Section 8 portfolio would grow exponentially, and the earnings are unlimited.  If you own 100 houses for rent under Section 8, you would be making $600,000/year!  (100 houses * $500/month *12 months)

Are there any problems with this plan?  Is it reasonable?

Thanks! :)