All Forum Posts by: Igor Avratiner

That's awesome! Thanks for sharing!

If you will be in philly feel free to reach out. I would be happy to discuss some of the strategies I have used as an investor in the areas you mentioned, that have worked out successfully.

Chris Price I can only speak for my experience here in Philadelphia. There are neighborhoods where section 8 will pay a higher rent. Neighborhoods where you could get 800-900/m for a 3/1 row home section 8 might pay 1000-1100. I don't know about the lower end neighborhoods but once you start getting in to the neighborhoods where a similar 3/1 would rent for 1300/m+ (traditional tenant) that's where section 8 starts to make less sense. They may actually offer you below market rent and you may have a larger pool of better qualified non section 8 applicants for those properties. The Housing authority here actually has a nice program call Housing Opportunity Program. What they are are trying to do is get families with a Housing voucher to move in to neighbors with better schools. So one of those 1300/m+ 3/1 row homes/twins for example. In those cases section 8 will bring their rent up to match the market rent. The nice this is that the tenants who qualify for this program have to go through classes and training in finances, home ownership, how to be a good tenant, etc. Section 8 also does some additional screening on them. What I find is that the folks who want to actually go through this process are probably more likely to be better tenants.

Patti Robertson you are right rarely have I had to visit a property at night but it has happened. I use this rule of thumb more so because if I am not comfortable there at night will the good tenants be? What about the contractors, I know of good contractors that refuse to work in areas where they don't feel safe. I can't blame them for that, I wouldn't either.

As many others have mentioned nothing wrong with section 8 as long as you screen the tenant just like you would with a regular rental. We try to provide a product that is above the average so it attracts better tenants. If the place looks really bad on a bad block the potential pool of interested tenants would be much smaller to pick from. We don't have an multi family section 8 units only singles. Find out if section 8 pays above, below, or at market rent in your area. In my market I I try to look for the sweet spot property that has a high enough cap rate but is in a good enough area. My rule of thumb is that I must be comfortable walking around in the area day or night. If it's a D class area section 8 or not it wouldn't be the right fit for me. I got some really good advice from @Ben Leybovich recently. It's always better to own a property that can attract both section 8 and traditional tenants vs one that will primarily attract one type. This can also be a factor when you go to sell the house your pool of buyers may be smaller. Also consider if one of the tenants were to move out would you get less rent if you decided to rent to a non section 8 tenant? Maybe you need to buy the house for less based on that contingency?

Looks like you should be able to do this online. I know you can definitely renew online. The renewals are 50 bucks and you get a notice every year. https://business.phila.gov/housing-inspection-license/ You can not evict a tenant without having a rental license in Philly so not having one is adding risk to your business.

Thanks for sharing! Best of luck in the new year! Would love to read your blog!

Not sure about TX law but this can be risky in PA Philadelphia and doing an eviction can be a very lengthy and expensive process without a lease agreement in place. Ask the seller to have them sign a month to month lease before closing so you at least have a legal document. If an eviction becomes necessary that could make a big difference.

You should be really proud! I think this is a big win, you paid your investors back and got the best kind of education possible. Education is not not free so just chalk it up to that. Now you have a track record and experience under your belt. I would recommend renting it out as you are doing and getting practice being a landlord so you can make all those mistakes too! As far as exit strategy don't over think it at this point when an opportunity comes up take advantage, maybe you tenants will want to do a lease purchase or something. In the meanwhile keep networking, listening to podcasts, and learning. As soon as you are ready go look for the next deal, but don't wait too long. You will be able to apply all of your experience from this one to make the next one more lucrative.

Hey Mike,

I think it also kind of depends on the availability of deals that come your way. For example if you want to do flips but can't find any deals where your purchase+holding+renovation cost is low enough to turn a profit when you sell, you probably will stay away from flips in that case. The same is true for rentals. My advice would be to start networking with investors locally. Maybe even find a mentor or a partner to do a deal with (someone with a proven track record). Talk to realtors, customers you work for, friends, family, etc. Starting looking at potential deals and try to run the numbers to see if any make sense and to get practice. Don't be quick to jump the first deal that comes your way, there will always be other deals. You'd be surprised, but it doesn't always take a ton of money to by your first flip/rental if you are creative. Save some dry powder for when you have already done a deal or 2 maybe with a partner or on a smaller scale and you are confident you know what your doing, at that point you will be ready to go all in. In real estate leverage is a powerful thing if done correctly so don't be scared to use the bank's money. For example at 70% loan to value $300k turns in to a $1MM rental portfolio.