All Forum Posts by: Anthony L.

Regarding section 8, you have to look for infor from their website either by county or city. They always post how much you can charge according to zip codes and number of bedrooms that your rental properties have.

Thank you all that gave their $0.02, it sounds like I would just have to ask directly what the local HA's max rent would be, beyond the FMV rent set by HUD, then maybe negotiate as I'm sure they don't want Section 8 units in this area being taken off the market

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Originally posted by @Brian Garlington:

@Tony Kim @Greg M. @Anthony L. @Dan H. @Mary M.

Politicians in California know that they will get beat up in the polls if they don't talk positively about trying to make affordable housing more prevalent. When they mention rent control and making it harder to evict non-paying tenants they know this will get them more positive sound bites and votes. This is actually why

1. I like Section 8 tenants because their rent is subsidized by the government.....so they are NOT subject to rent control,...

2. 70% to 100% of the rent is paid by the government and is in my bank account at the 1st of the month.

3. IF a Section 8 tenant loses their job (Yes most of them actually do have jobs) then they will let the Housing Authority know and the Housing Authority usually adjusts the HAP amount and covers 100% of their rent.

4. They are "sticky" and I mean that in a good way because by "sticky" I mean they "stick" with a property more so then cash tenants, which leads to less turnover.

5. It can be good kharma because you are helping out with the affordable housing situation.

You can screen them just like you do all tenants.....I have Section 8 tenants at properties in Oakland, CA, Concord, CA and Cleveland, OH and myself and the property manager were able to screen them and gets tenants in that have no dangerous breed animals, no felonies, no evictions, no smokers and we literally had to turn away qualified Section 8 applicants because we or I didn't have any more rentals available because it's like a Sellers Market when you market to Section 8 tenants.

Hi, may you help me with something? Currently, we're in the process of raising the rents for some section 8 units to FMV this year since they're well below market. Could we ask for rents maybe 10-15% above HUD's FMV? We have units in the City of Los Angeles, Long Beach and La Puente, all expensive, high-demand and low-inventory cities similar to Oakland and SF. We also pay for tenant utilities, and the LA property was built in 2004

I would ask the local HA's, but I'd like to hear first from a seasoned investor with experience with Section 8 property management in a similar, low-inventory California market

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Originally posted by @Dan H.:

Originally posted by @Anthony L.:

Originally posted by @Dan H.:

Originally posted by @Anthony L.:

Originally posted by @Peng Lim:

Need help interpret this soon to be law. Does this new rent cap apply to section8 units? I have 3 of my unites under section 8 and I am about $500 below the market

Here is the text on the bill

Housing restricted by deed, regulatory restriction contained in an agreement with a government agency, or other recorded document as affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code, or subject to an agreement that provides housing subsidies for affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code or comparable federal statutes.

I would also like to know if this new Rent Cap Law of 5% plus inflation per year affects Section 8 units that are well below Fair Market Rates

My view is section 8 should not be below market value. The extra burden placed on landlord should be passed on to the tenant (the government is in a tenant role). So market rent on a section 8 should be higher than the equivalent non-section 8 unit due to the extra burden. If you have let your section 8 housing get below market, you have been saving the government from paying market rent. Why?

In all honesty, complacency is what allowed this rate to remain so low up until now, but now is my chance to make things right.

Would you happen to be familiar with how much above fair market rate can be requested in a Section 8 rent request? We have a unit each in Long Beach (2bd), South LA (3bd) and La Puente (2bd). We pay for all utilities including water, electricity, trash and occasionally maintenance and thankfully we've had decent people occupying these units. I have not done this before and a lot of information I'm finding for CA might be outdated. Thank you in advance for your time

If the unit is not A SFR, you will be constrained on the rent increase to the rent control rules which is 5% plus inflation.

As to what is fair market rent for section 8, if I was targeting section 8 I would start at non section 8 market rent and add a small amount for the extra burden associated with section 8. Seeing that you are not even at market rent, your first step is to get to market rent.

I intentionally set my rents outside the section 8 threshold because I do not desire to have section 8 tenants. Legally I cannot look at the source of the funds, but I can price my units to where they do not qualify for section 8.

Good luck

After pouring through the text, I found that Section 8 is exempt from this new rent cap legislation and landlords are entitled to being increased to HUD's standard FMR. Would you say a request of 10% above FMR in LA County would go through? It seems SoCal's strained housing market gives Section 8 landlords some clout, but I am inexperienced with this matter

1 Vote

Originally posted by @Dan H.:

Originally posted by @Anthony L.:

Originally posted by @Peng Lim:

Need help interpret this soon to be law. Does this new rent cap apply to section8 units? I have 3 of my unites under section 8 and I am about $500 below the market

Here is the text on the bill

I would also like to know if this new Rent Cap Law of 5% plus inflation per year affects Section 8 units that are well below Fair Market Rates

In all honesty, complacency is what allowed this rate to remain so low up until now, but now is my chance to make things right.

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This bill really shafts decent/meek landlords of small multi-family properties that maintained below market rents to the people this bill was meant to protect. It will take many years to ever reach market rents at this rate and locks up any potential resale value of small multi-family units for MANY years, depending on how low market rents were, if these landlords ever wanted to sell for fair market value.

OK, maybe these kinds of landlords could have been more business-savvy and let other people deal with the poor, elderly, minority and vulnerable (taxpayers) so they can live large, but what real message is being communicated here with this new bill? Incompetence and powerlessness for real change in Sacramento, with no real hope for proper urban planning for all Californians beyond vacant luxury apartments, McMansions in the desert and gridlock traffic spanning all the way to Las Vegas.

California, no amount of year-round sunshine and natural environment will ever make up for the fact that you are the most incompetently-run state in all of America, and that's really saying something. We are reaching 1970's New York City dysfunction levels here, and real change is far beyond our reach

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Originally posted by @Peng Lim:

Need help interpret this soon to be law. Does this new rent cap apply to section8 units? I have 3 of my unites under section 8 and I am about $500 below the market

Here is the text on the bill

I would also like to know if this new Rent Cap Law of 5% plus inflation per year affects Section 8 units that are well below Fair Market Rates

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Originally posted by @Account Closed:

Your 11 tenants from 3 is not that uncommon in low income housing. You think the Lady and her kid you intitially rent to is going to enjoy your home, just the 2 of them. Little unbeknowst to you her boyfriend and his 3 kids will also enojoy your low income rental. Then her sister who just broke up with her bf needs a place short time- which turns in forever. Then the new bf starts showing up.

Really happened. The owner tried so hard to do things right. He just said bleep, bleep n bleep.

That is one more reason why the lease must always be airtight and the tenants are screen thoroughly, so your single family home does not turn into a residential clown car

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Originally posted by @Joseph M.:

@Anthony L. , not too far from you in L.A , the housing issue really is a big thing here of course. I forget the specific percentage but many people are spending about 50% of their income on rent. That affects the local economy in general of course because then people have less and less to spend on local businesses and services. There have been studies that show homeowners have an average networth 44x that of renters.

https://www.keepingcurrentmatters.com/2017/10/12/n...

Having such a higher percentage of renters I don't view as a great thing. In L.A we are seeing 'rent strikes' recently of tenants not paying rent and protesting against landlords even at the landlords home. So we are seeing signs of 'civil unrest' . Local politicians now are talking about hiring attorneys for some tenants facing eviction.

https://la.curbed.com/2018/8/17/17720066/los-angel...

Definitely not a pro landlord move.

California is a pretty dysfunctional place, a place where you're either part of the haves or the have-nots. This year, California ranked as the state with the highest poverty rate in the country when factoring in cost of living. So many people are already stretched thin, which makes me think that it's only a matter of time before things start to go south here. I don't ever plan on buying property in this state, either for investment or myself.

There's prop 10 in this state's coming election which would allow local governments to decide on implementing rent controls, which can be really bad news for current landlords in the state.

2 Votes

Originally posted by @Andrey Y.:

Originally posted by @Anthony L.:

I think we are on the cusp of a different type of economic crisis, not like the recession we had in 2007. The recession from 11 years ago was caused by irresponsible lending and an overvaluation of real estate in many major markets, leading to mass foreclosures. New instability we haven't seen since the Great Depression can be set off if we face an economic downturn today. The fact of the matter is the majority of working Americans are living paycheck-to-paycheck at the moment and it will get really ugly if a wrench gets thrown at those that are most vulnerable.

The current trend now is an affordable housing shortage in the most popular metro areas across the country, and there doesn't seem to be any resolution in sight as new residential construction in this country is stagnant. In short, the majority of people will stay renting/super-commuting if they want to continue their careers and lives in cities like LA, NYC, SF.

Affordable units are not being built because they are not profitable for developers, who only profit from McMansions (which both aging Baby-Boomers and young people don't want now and especially not during a downturn) and luxury condos/apartments, so more and more Americans in HCOL cities continue to rent, many of which are already rent-burdened. I predict that as the renter pool continues to grow in the new few years, economic inequality will continue to grow exponentially, leading to social unrest as well as calls for economic reform, which could explain the growing appeal of Bernie Sanders back in 2016 to those that are most at-risk.

I predict America will become much more like Europe in the coming years; normalized social unrest/tensions, even more economic inequality and pushes for more social programs subsidized by higher taxes. Perhaps more crime and a bigger drug problem to those that are already living paycheck-to-paycheck today get a wrench thrown at them if the economy were to do poorly.

For those of us that are looking to invest in residential real estate today, we need to tread lightly and not depend on appreciation, but cash flow from properties near economic powerhouses, such as government jobs, hospitals and universities.

Where did you buy your crystal ball?

I'm just messing :) I do plan on relocating overseas by 2023. I just don't know how having certain assets in the U.S. will affect this. It may come a point I will need to stop investing in U.S-based assets just to be sure. There is always some trepidation in investing overseas (esp. a non-Western or non-English speaking one). If I was actually present in that country, I would feel more comfortable pulling the trigger.

I'd be wary of buying property away from where you live unless you have family or really close friends to keep an eye on them. Even from LA County to Riverside County, my family friend had found out herself that her property management had leased a single family home to a family that later ballooned up to 11 people living in a 3 bedroom house. The property management agent she hired eventually disappeared with her rent money and left her the mess to clean up.

I don't know much about overseas investing, the United States is all I've ever known. I have faith that even if bad things were to happen to us, we can pull through it and reinvent ourselves like we have throughout the country's history. The best thing we can do now is be keen to what we put a lot of cash down for anything

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All Forum Posts by: Anthony L.

Anthony L. has started 0 posts and replied 13 times.

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