Advice for Financing a Low-Cost, High-Rent Property

[Justin Mason]

Hello BiggerPockets Community,

I've recently acquired a property through an auction, situated in a C area. My plan is to hold onto it as a rental property, targeting Section 8 tenants, as the rental income is quite attractive at nearly $1,500 per month.

Here's the challenge: The property's purchase price and labor is below $40,000, and I'm uncertain about my ability to secure a traditional mortgage for a property at this price point. I'm exploring alternative financing options and would greatly appreciate insights or experiences in similar scenarios.

Key Points:

• Property Location: Cahokia Heights
• Purchase Price: $17,000
• Rental Income: Approximately $1,500/month via Section 8
• Condition of Property: Updated plumbing, roof is in good shape, needs AC unit, paint, flooring and cabinets and counter top

I'm considering reaching out to private lenders but would like to gather opinions on:

1. Feasibility of securing a mortgage for a low-cost property.
2. Attractiveness of this deal to private lenders.
3. Any creative financing strategies that could be applicable here.
4. Legal and tax implications I should be aware of.
5. Potential risks and how to mitigate them effectively.

Any advice, suggestions, or contacts in the private lending space would be immensely helpful. Also, if you've had experience with Section 8 rentals in similar price brackets, I'd love to hear about your journey.

Thank you in advance for your time and insights!