All Forum Posts by: Bob Stevens

@Tom Sahar

Hey Tom! I am new to the Cleveland area too! I bought a property where the current numbers don’t make exact sense, but it’s my personal residence and cheaper than renting for me even in todays market.

Let me know if you want to connect!

Looking for a good property manager in Cleveland, Ohio. Does anyone know of one who's worked with Section 8 housing before?

@Bob Stevens Congrats!

You should copy your program and start selling it nationwide, partnering with every investor with some cash.

You'll soon be a billionaire!

@Hai Le if only it was this EASY!

1) The $1832 S8 rent probably includes all utilities. Be sure to verify!
Most counties have a chart that allows you to figure out these amounts.

2) 20% for PM, Vacancy & MNT? Way too low!
PM - probably 10%
MNT - should be 10%
Vacancy - everyone thinks it's 5%, but that's only for Class A properties. S8 rentals are Class B, C or D. Should be at least 10%.

3) What about tenant damages and nonperformance?
Most S8 tenants now have to pay a portion of their rent. What happens if they don't?
What credit score do you think tenants qualifying for government assistance will have?

FICO Score	Pct of Population	Default Probability
800 or more	13.00%	1.00%
750-799	27.00%	1.00%
700-749	18.00%	4.40%
650-699	15.00%	8.90%
600-649	12.00%	15.80%
550-599	8.00%	22.50%
500-549	5.00%	28.40%
Less than 499	2.00%	41.00%

You are looking at S8 because you naively think it will solve all your tenant problems.

NOT TRUE!

You will just be trading one set of tenant challenges for another.

Hello guys, I'm getting into the Section 8 investing and just wanted some feedback on a property I'm looking to purchase out of state.

4BR 1Bath SFH, Mortgage payment is $917.37/M-$955.12 for a 30YR Fixed Rate at 7.13%, 80% LTV I am putting down $23,800. Looking to structure the deal with concession's to come as little out of pocket as possible so I have different offers in mind, but the payment is between the ranges.

I figure another 20% for Property Management, Vacancy, Maintenance which totals to $1,100.84/M-$1,146.14/M. 

Section 8 Payment Schedule for the 4BR in the location is $1,670/M & the County Housing has a payment schedule of $1,832/M; so net cashflow would be $523.86-569.16/M at $1670/M and $685.86-731.16/M

Property is turnkey is needs just a cleaning for tenant ready. Just wanted thoughts and opinions on this property & deal. It is in a good neighborhood and on a slab so little structural issues to worry about. All big ticket stuff are taken care of & newly replaced.

Thank you for your feedback!

Quote from @Bob Stevens:

Quote from @James Wise:

Quote from @Bob Stevens:

Quote from @Patrick Drury:

@Hadar Cohen
If you are looking in those areas just be aware that Maple Heights and Garfield Heights will be subject to a POS (point of sale inspection) before the title can transfer. That is something that will be important to know if you are looking to do a BRRRR deal in these areas. The POS will drag out the process and make it harder, but like anything if something is hard and people don't want to do it it can create an opportunity for the people that will put in the time and effort to see it through 

 POS is meaningless. When the GC walks it the know what will be on it. But those areas were 5 years ago. However, I am closing on a fully renovated 3 be on Garfield Ave in MH next week, 95K all in, rent will be 1800ish.  

 You can't predict exactly what will be on the POS. When the city sends out their inspectors to write up the POS, and then later they send them back (not always same guy) to clear the POS after repairs, they sometimes add different violations onto the original POS that they didn't even cite the 1st time.

 Agree, however you and I are fully aware of 99.9999% of what they want. Im sure between the two of us we have closed more the 1k POS inspections, 

 I dunno, what does and does not get cited seems to have a lot to do with whether or not the inspector's wife has been nagging him or not that morning.

Quote from @Bob Stevens:

Quote from @Patrick Drury:

@Hadar Cohen
If you are looking in those areas just be aware that Maple Heights and Garfield Heights will be subject to a POS (point of sale inspection) before the title can transfer. That is something that will be important to know if you are looking to do a BRRRR deal in these areas. The POS will drag out the process and make it harder, but like anything if something is hard and people don't want to do it it can create an opportunity for the people that will put in the time and effort to see it through 

 POS is meaningless. When the GC walks it the know what will be on it. But those areas were 5 years ago. However, I am closing on a fully renovated 3 be on Garfield Ave in MH next week, 95K all in, rent will be 1800ish.  

 You can't predict exactly what will be on the POS. When the city sends out their inspectors to write up the POS, and then later they send them back (not always same guy) to clear the POS after repairs, they sometimes add different violations onto the original POS that they didn't even cite the 1st time.

Quote from @Bob Stevens:

Quote from @Joshua Perelli:

Quote from @Catherine Ding:

Quote from @Joshua Perelli:

Quote from @Michael Smythe:

Been dealing with all this in most cities of Metro Detroit since our PMC founded.

City of Detroit has required Lead Cert for over 10 years.

The lead certifications isn’t the issue, it’s the local agent in charge that the city is making take financial responsibility.  I cannot find anyone who wants to take that on.

 Have you had any luck finding someone yet? We are also looking at options for finding a "registered agent" for our Cleveland property

 I have not found anyone, even property managers are telling me they won’t sign off on anyone’s because they don’t like the way the city is pinning ultimate financial responsibility onto whoever the local agent is so it’s a risky endeavor. Please let me knif you find someone.

 Nobody is doing it for you for free. I offered to help you however you mentioned you self-manage, (terrible idea) and " have a rolodex of handymen" Well why are your handymen not being your local agent? My guys do whatever I want as I give them tons of repairs/ reno. 

Good luck 

Thanks bob you’ve explained how big your operation is and that’s wonderful and all but for us investors who have only a couple properties and can’t “give contractors as much work as they want” I’m looking for a solution.  I’ve also explained I’ve talked to property managers and they are not even offering the service to clients, so whether I self manage or not has nothing to do with it.

JPM

@Hadar Cohen
If you are looking in those areas just be aware that Maple Heights and Garfield Heights will be subject to a POS (point of sale inspection) before the title can transfer. That is something that will be important to know if you are looking to do a BRRRR deal in these areas. The POS will drag out the process and make it harder, but like anything if something is hard and people don't want to do it it can create an opportunity for the people that will put in the time and effort to see it through 

Quote from @Catherine Ding:

Quote from @Joshua Perelli:

Quote from @Michael Smythe:

Been dealing with all this in most cities of Metro Detroit since our PMC founded.

City of Detroit has required Lead Cert for over 10 years.

The lead certifications isn’t the issue, it’s the local agent in charge that the city is making take financial responsibility.  I cannot find anyone who wants to take that on.

 Have you had any luck finding someone yet? We are also looking at options for finding a "registered agent" for our Cleveland property

 I have not found anyone, even property managers are telling me they won’t sign off on anyone’s because they don’t like the way the city is pinning ultimate financial responsibility onto whoever the local agent is so it’s a risky endeavor. Please let me knif you find someone.