💰How Are These Sub-$75K Section 8 Deals Funded Using OPM? Hard Money + 30-Year Loan

[Eduardo Cambil]

Hey BP fam 👋

I've been seeing a lot of these Section 8 “cash cow” deals on social media lately—like this one in the photo:

• Price: $69,900

• Rents for: $1,405/month (FMR)

• Cashflow: $738/month

• 15% down = $10,500

• PITI: $492

• Management/Maintenance: $175

The strategy seems solid: buy below market, rent to Section 8, net $500–$800/month. But here’s my confusion:

🧠 How are these deals actually financed if the property is under $75K?
Most traditional DSCR lenders and mortgage banks I’ve talked to have $75K–$100K minimum loan amounts.

From what I understand, some investors are:

• Using hard money lenders to cover the 15% down.

• Then refinancing into a 30-year loan later on.

• All while using zero of their own money (OPM strategy).

So my big question is:
💬 Who is refinancing these under-$75K properties?
Are these private portfolio lenders, credit unions, or some other lender type I’m missing?

And are they keeping the properties under LLCs or personal names to make this work?

Would love to hear from anyone actually doing these small deals profitably. Appreciate any insights, lenders, or creative setups!

Cheers,

[Drew Sygit]

Well said by both @Travis Biziorek and @Patrick Roberts, but there's more!

You don't qualify for Section 8 by making good life decisions.

What we've had to deal with is majority of S8 tenants are single mothers - yet many have a revolving door of boyfriends who move in with them. Which is a violation of their S8 HAP contract. Yet, it's usually not wirth reporting and having the rent abated - because they don't just move out when rent is abated.

It's also NOT the SWAT teams breaking down doors you have to worry about. It's the fights that happen that lead to broken doors. It's the ex's that come by and use a baseball bat to break as many windows as they can. S8 tenants don't have the money to fix these, but they do pick up the phone and complain to their caseworker, who issues a 24-hour Emergency Repair Notice to fix the windows - or the rent will be abated.

NOT ALL S8 TENANTS ARE TROUBLE!

We have several S8 tenants that take great care of their homes and cause no problems.

The real challenge is owners NOT having realistic expectations and freaking out over rent abatements and/or repairs because they have a mortgage payment due.