All Forum Posts by: Bryan Hartlen

@Justin Wingfield I believe you’ll find that Section8 answers vary dramatically by market. You also need to consider the question from two perspectives:  the bureaucratic process & the tenants. You are basically trading off “guaranteed” rent for increased bureaucracy.  

In general accepting a S8 voucher means you are accepting the S8 process which includes government inspections (the tenant does occupy until you pass the inspection). This inspection process and the inspectors are part of the local housing authority.  Some are better (or worse than others). It can also include or require mandatory re-inspections (even if the tenant is the same). The process also governs the maximum rent & rent increases. 

From a tenant perspective we have not had any nightmare tenants (knock on wood).  In general there is more demand for vouchers than vouchers and it can take years for a tenant to get a voucher. If they are evicted they’re kicked out of the program. So once a person qualifies they tend to behave.

We do S8 in Birmingham, AL as out of state investors. Prior to Covid inspections were within 2 - 4 weeks of finding a qualified tenant with a voucher.  Currently its a crap shoot... the last one took almost 8 weeks. We’ve never had a clean first time inspection - the inspectors always want to find something. We’re at the point where we purposefully leave nit-picky items like a cupboard not latching properly or a sink stopper not working so they flag those items and don’t have to look to hard.  But in Birmingham the same inspector doesn’t necessarily do the re-inspection, so we have had new punch list items pop up on the re-inspection.  Despite this, we continue to  plan to add S8 properties to the portfolio especially while we’re in the middle of Covid moratoriums. 

Hi Brandon. Welcome. We're AZ investors that focus on section 8 rentals (C class neighborhoods) and flips (B class neighborhoods) in the Birmingham market. What's your focus: buy and hold, flips, other?

There are opportunities in Tarrant but it’s like many zip codes in Birmingham and depends on what neighborhood. We have a property that we’re flipping. It started as a non performing note, and after consulting several property managers we decided on a flip because (i) Tarrant taxes / licensing on rentals is not nearly as friendly as Bham neighborhoods and (ii) it happens to be in a neighborhood where property values are higher than many of the other section 8 class C neighborhoods.

We buy value add SFR properties in Birmingham, AL and in Terre Haute, IN. They are almost always overtaxed for their current condition. We always protest and have always had the property taxes lowered - at least for the first year while rehabbing. That said, the tax rates aren't anything like Chicago. And I wouldn't buy a property that only made sense if a tax appeal was successful. I would treat the reduction as a cherry on top of the value add process.

Please add me to the list if you get together again.

@Jason Cory thanks for the insight. Is there a department in the authority that we could call directly to see what their queue is like? And where our properties are in the queue?

We've had 3 properties in Birmingham, with qualified voucher tenants waiting weeks for housing authority inspections. One property has been waiting 8 weeks. Our property management company says (i) it's caused by Covid impacts to the housing authority (laid off staff, inspectors getting sick) and (ii) there's nothing they can do to try and accelerate the process or even inquire where in the queue we are.  Our pre-Covid experience had been tenanted and rented properties in less than a month.

Are others experiencing similar delays?

Is there really no way to at least see where we are in the queue?

Thanks @Jay Hinrichs.  Cold calling set of the scam warning which prompted the post. Didn’t even know about the up front fee.  That would’ve ended the conversation. Btw: I did search but nothing came up... I’ll try again with different spelling. 

Had a cold call from these guys and answered the phone by mistake ;-/.  Wondering if anyone has had an experience with them?

@Peter Philando thanks for the update. The nextdoor app tip is something I hadn’t heard before!  Are you managing your doors yourself or through a property manager?  

It sounds like our strategies are similar. We’re building our portfolio and team in Birmingham first.  I’d like to diversify into another market in the near future - so we may be looking again in Montgomery.