Section 8 deal - yay or nay?

[Brendan Levesque]

In Boston.

REO in very rough neighborhood. listed at 299k and needs work.

At 20k of work I'm going to try and get it for 225k-240k. Already spoke to the agent, it's been on the market with no offers for 7+ months.

Property was former Sect 8. Once repairs are done and apartments are up to spec the 2 bed units should get 1,200 and the 3 bed 1,600 per the current market.

So even at 240k +20k repairs/carry:

Total annual income 48k
Expenses 24k

NOI of 24k

Cap of only 9.37%

but,

if I put 20% down at 7.5% that's a cash on cash of 13.30%

thoughts? Any serious problems renting to Sec 8 I am missing?