buying house that failed section 8, with exisitng tenant ?

[Micah Mcarthur]

So here is a quick run down of a property I am looking at.  Its in a C neighborhood, but not in the war zone, mostly families on section 8 rentals in that area of town. I  purchased another rental on that street a few weeks ago and I am in the process of getting it ready to rent.   Then I found this next house just down the street and started looking into it.

Tenant has lived in house for 5yrs, on Section 8.   

Recently Louisville Section 8 has been awful, and investors are fleeing the program, as they fail you for everything.

This house failed inspection in February, (its now late June) and owner has not received payment since Feb.  Rather than fix the minor problems, or get off the section 8 program and have her move, he has decided to just sell the property.  

My biggest concern is that he said the tenant is on a month to month lease, (and he has not been exactly truthful on several statements) and the tenant says she is on a 1yr lease and wants to stay.  Tenant told me she cannot afford the rent herself,  she relies on section 8.

If I purchase the property, What would be the process to move her out and how hard would it be?  I am researching the S8 program here, but I really dont think I am interested in getting into that program. 

[Greg Smith]

I have 3 houses with section 8 in 40210 and one in 40212.  In my experience they are most thorough in their initial inspection and less so in their annuals.  Usually they ask for little things that are not expensive.  

Pros: I have never had to evict a section 8 tenant.  Now admittedly I had a small sample size over just a few years but tenant relations are generally much better.

I get paid on time every month.

If a tenant breaks something, they have to fix it or  lose their section 8.

There is a lack of supply it seems so tenants jump on vacancy's and stay put.  Even if they want to move, they renew because there’s not another house in their price range.

Cons: sec 8 always sides with the tenant.  

They can fail you at any time and withhold payment (though I have always received back pay when the issue is resolved)

They tend to find something every time (more like 2 out of 3 times). Always on an initial inspection.  I’m tempted to leave a couple obvious things so they can get some easy wins.

Sometimes they find dumb things like tree limbs or moles(!) in the yard.

Section 8 reevaluates tenants periodically and adjusts their contribution amount.  I had them do this retroactively on a tenant increasing her portion $150 / month.  This put her in a hard spot for months.  That has been my biggest problem.  Without sec 8 they cant afford to live there.  If something goes wrong the person can enter a bad spiral.  I waived late fees and was patient and things worked out but it was hard. I was still in the black without the $150 so it was hard knowing the best move