16 units- currently Section 8

[Mark Devereaux]

I have a good lead on a building with 16 units, Section 8 housing.  Small, rural town near my hometown.  We already own a 24 unit, non-section 8 and have turned around the tenant base from not-so-desirable tenants to very good tenants.

We are not totally familiar with HUD/Section 8. Are there any lengthy contracts with Section 8 regarding the building? As the tenant base turns over and leases expire, would it be up to our discretion as to whether to continue units with Section 8? Or are we just bound by each individual lease?

We would like to buy the building right, transition from Section 8 to non-Section 8 into the future. 

Thanks for any input.

[Tony Hardy]

Id start by reviewing  the HAP agreement.  Sometimes, they run with the tenant as avoicher holder other times, the voucher is tied to the unit.  From there you probably want to consult a professional.  You can get into a sticky situation if you decide not renew leases or not rent to people because they are on section 8.  If you preffer market tenants over section 8, why not look for a building with market tenants in place.  My firm may have one or two available in the area.