General questions regarding regarding LTR using DSCR for section 8 tenants:

[Andrew Rivera]

Hello all, I'm curious how much the HUD will actually pay compared to the 40th percentile rents posted on their site.

I'm aware of the different amounts each tenant will cover in terms of their portion of the rent, but I'm not sure if the HUD will actually agree to my rent price.

I've been taking the stated FMR for the bedroom count, and taking 20% off the number stated (to be conservative as to what the HUD will accept). Am I better of just running my own rental comps instead of using the HUD User site? And if so, what are the benefits of section 8 if the only guarantee is the direct deposit and yearly inspection?

I'm looking to dive in and learn so I've been just trying to practice underwriting lots of deal as best as I can to calculate the cash on cash returns and DSCR ratios.

Thank you to all who answer!