Considering purchasing an already tenanted section 8 property in Detroit

[Harshit Tewari]

I am a first time investor. Want to purchase a tenanted Section 8 property. I understand that the majority of the risk in Section 8 is from tenants damaging the property, therefore depreciating the asset over time and leading to high maintenance costs. What are some creative ways I can do my due diligence on the tenants? I understand that because I will be taking on an existing lease, I will most likely not have the opportunity to do my own full background check. Here are my initial thoughts:

-Making the offer contingent on seller showing me background check documents from their due diligence

-Requesting for a walkthrough of the property after the offer is made, and reserving the right to pull the offer if the house is not maintained well

Are these ideas practical? Do they violate any existing restrictions? Any other ideas on how I can go about this?

Thank you so much! 

[Travis Biziorek]

My first Detroit rental was a S8 occupied home in 2019. I still have the home and the same tenant. She's been good overall but I recently received a notice in the mail that she's being dropped by the Section 8 program. Her voucher is going to $0. 

So, while most people think the risk to S8 is the tenant being harder on your home, that's only part of it. Your tenant's voucher amount can change and even go to zero.

Doing a walkthrough will probably work fine if this is a deal on the MLS. But I doubt you're going to get much info about the tenant outside their lease agreement, voucher mix, and payment history. And honestly, you don't need much more than that with a S8 tenant.