Section 8 single family homes

[Ryan White]

I'm a new investor and have an opportunity in front of me that I'm looking for advice.  I have someone willing to sell me 2 section 8 homes (4 BR homes both built in 2009) and they have been rented out to the same families for the past 6 years.  One tenant pays the full rent (voucher plus their portion) and the other doesn't pay anything (just the voucher is paid).  The zillow estimate for these properties is around $200k, city assessment is around $185k, and he's willing to unload them both to me for somewhere between $140k-$150k each.  

I'm looking for advice on section 8 rentals (experiences, lessons learned, recommendations, etc.) and an understanding of whether they typically appreciate well or not.  My assumption is that I'm getting them under market value (based on zillow and city assessed values) and my numbers indicate that they'll both cashflow more than $200/month.  However, I'd end up having to do a cash out refi on my current house to obtain the capital required to purchase them.  Looking to be informed on section 8 purchases before I pursue this offer.  Note that I'm currently more in favor of pursuing this offer than not, especially if I can get them for $140k/each.  

Thanks!

[Ryan White]

@Caleb Brown 

Thanks for the info.  I spoke with the current PM yesterday and she said these houses aren't located in an area that would do well on the market.  The area attracts primarily section 8 folks and therefore, it might be difficult to find a non-section 8 tenant that would be interested in living here and paying the fair market value that would demand.

I do like the prospect of considering switching the houses over, but my other concern would be finding the right tenant that I would feel comfortable knowing they can make their monthly payments (i.e., the area probably isn't going to attract many folks with good credit).  One benefit with section 8 is knowing that even if the tenant credit score is low and/or they are unable to make payments during some months of their lease term, I've still got guaranteed income from the government rather than none.