Section 8 Baltimore, MD

[RJ Nickson]

Hi Forum,

I have been offered a partnership deal for a Class C or D property in Baltimore City. I have invested in RE prior to the market crash in 2008 and this will be my first purchase since then. The plan is to use the BRRR strategy using Section 8 or VA tenants. If you have experience investing in this area or have used the prior mentioned type of tenants for the planned strategy, please comment.

BTW this is my first post in the Forum. Please be kind and patient. 

[Ned Carey]

Welcome to BP @RJ Nickson What you propose can be very profitable from a cash flow perspective. However there are risks and concerns. Who are you partnering with and what is their experience. Perhaps one of the biggest issues will be getting the take out refinancing. Low end properties in Baltimore can be tough to finance. For one thing, banks don't want to make loans that small. 

Section 8 can be a pain in the rear but currently pay higher rents. There is a risk that section 8 may change the way the evaluate rents. Expect that inexpensive areas may see lower rents and  more expensive areas will see higher rents. Right now the spread in rents between nice areas and weaker areas is not that big. That is one reason C and D areas can make sense. I am moving towards more section 8 and less market tenants.