All Forum Posts by: Cole Agnew

I am having a difficult time finding section 8 tenants. I gave an advertisement to the local PHA and they at least claim that they distributed it to their list of voucher holders, but either they did not do so, or nobody that has seen it is interested because I have no contacts yet. I also advertised on affordablehousing.com with little success. The rent is listed a little above market value, but that is because Section 8 will pay it, that is why investors are incentivized to rent to Section 8 and go through all the extra steps. Does anyone have any advice on what I should do? Currently just losing money to a mortgage on an empty house. 

I am currently looking for someone to partner with that would supply the capital to grow and expand my portfolio by supplying additional debt in return for a negotiable fixed return on the investment. The deals I have are over 1.5x DSCR and there is no concern that the property cannot support additional debt. If you or anybody you know is interested, please reach out for more information. In the next month or so I will be putting together a full investor deck to pitch the idea, but thought I would reach out to this community first.

Okay, so how does the process of determining what the tenant gets approved for work? I was previously under the impression that they would have up to the FMR for whatever bedroom count they qualified for (based on who was living there). For example if they had a 3 bedroom packet they would have $1,475 as referenced in the previous post, including utilities, and then they would just be responsible for whatever portion 30% of their income makes up. Say they make 2k/mo they would be responsible for $600. Please tell me if I am incorrect in any of these assumptions.

Also, one thing you didn't touch on that I was curious about if HUD runs comps and will limit the rent that they pay based on that.

To preface a tiny bit, I own a rental property already but have been considering buying another property and leasing to sec 8 subsidized tenants. Upon my research I have got lots of conflicting information, even from “gurus” swearing by conflicting information. 

For example, payment standard for a 3 bed house is about $1,475 (coming from landlord packet provided by county HUD). After taking off about $200/mo from rent for tenant paid utilities and such that brings the number to around $1,275. Now, some will say that this is what you can charge, and section 8 will pay. On the other hand, some say that the local HUD will run comps and say that you cannot charge that much (market rate for that bedroom count / area is probably closer to $1,000). Can anybody that has experience shed some light?

If anyone rents to section 8 in Lubbock, TX I would love to talk more!!! 

Right they will lend on the lower of the two. In the scenario that I mentioned I was going to be purchasing the house for $140,000 and it had already appraised for $157,500. Would it be legal for me to amend the contract for a $157,500 purchase price so that the bank would lend 80% of $157,500? Then hopefully I could convince the seller to let that happen and write me a check for $17,500.

Quote from @Bryan Hancock:

It depends.

Will they be passive?  Google Howey Test and call a securities attorney.

Based on the Howey test, "Investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others." I don't see how buying real estate would ever not fall under that definition. 

Would it make a difference if they were passive or if they contributed in some way other than providing capital?

I am looking to being finding partners to bring some money to the table so that I can continue to buy more real estate. A lot of the research I have done has indicated that I need a PPM to protect myself and comply with SEC rules and regulations. If per say I want to partner with another individual where they bring 80% of the money and I bring 20% of the money, do I need to get a costly PPM drawn up or can I simply form an LLC with the partner and have a high quality operating agreement detailing the structure of our agreement?

Okay so I bought my first rental property around 6 months ago and am looking to buy another one and I had some questions about financing. The bank that I used for the loan on the first house required me to put down 20% and I am fine with that as I don't want to be over-leveraged. I am going to use the numbers for that house in this example. The purchase price was $140,000, I put 20% down ($28,000) BUT it appraised for $157,500. Since it was a rental property seller concessions were limited to 2% of the purchase price which came out to be $2,800. Would it be possible, and legal, to go to the seller and have offered $157,500 (what the house appraised for) and asked for a check of amount $17,500 for "fixes"? This way I would only have to put down $10,500 instead of the $28,000. I also still wouldn't really be over-leveraged because the house could have really sold for the appraised value, the seller was just dumb. NOTE: my bank would only loan on purchase price sadly, it would have just been much easier if they would have loaned me 80% of the appraisal. 

Tenant said that the dishwasher seemed to have died. She said that she was going to wait a little bit 'pop the breaker' and try again, later she informed me that it still was not working and was presumed to be dead. I called a repair service to go out and take a look at it and got a call after from the repair man informing me it was just the GFCI breaker, the dishwasher was just fine. Do I charge the tenant the $75 service charge since she said that she checked the breaker already and that was the only issue? or do I just suck it up...