All Forum Posts by: Jennifer Donley

@Neil Painter welcome!   I'm a local STL investor and love all things real estate.  I only rent to Section 8 tenants and my portfolio is all in North County.

Hope to run into you around the area!

@Jalawny Nunnelly, I'm not your person - wholesaling's not my jam.  BUT!  Check out the guys at FasterFreedom - they have YouTube channel and talk a lot about wholesaling. They also have some great free info as well.

@Mary Aviles that's awesome. 30 year fixed terms in an LLC are unheard of here. I network and work with a lot of investors locally, we talk financing all the time and I don't know anyone who gets that.

Mind sharing who your lender(s) are?

@Sean Bizjack, I'm not going to change your mind.  But here are my thoughts.

I only take Section 8 tenants.  I am currently owed $0 in rent. If my Section 8 tenants don't pay their portion, then I file eviction and even if I can't get them out now, they put their voucher at risk.  Which they don't want to do so they pay their portion.

I screen like crazy and my properties are well taken care of.

So I'll keep buying and adding to my cash flow and net worth and let everyone else worry about getting paid. 

I mean, I wouldn't mind if fewer people were buying property right now... makes it easier for me to acquire ;).

@Account Closed, I'll jump with my thoughts & experiences, my apologies if some of it duplicates other answers.

I have 26 doors in 2 LLCs. 

I did use a couple of conventional loans early in my career and I agree with Whitney - once you go to commercial loans, you probably won't go back.  Conventional loans require blood work and first born, from what I remember :).

I am getting ready to refinance my entire portfolio to accomplish several things:

1. Get to 4% interest across all properties (this is a slight improvement over what I'm getting now, not much).

2. Stablize the portfolio for 10 years.  Most commercial loans have either a 3 or 5 year balloon or an interest rate reset at 3 or 5 years.  I was concerned about interest rate risk.  I found a bank that would do a 10 year term on a 25 year amoritization.

3. Unlock equity - I'll do a cash out refi and pay off 2 of my most valuable properties. Then do a line of credit against that equity so I can become my own lender OR lend to other investors.  Either way, I have access to that cash that I didn't before.

4.  Reduce payments - My total payments will go down $1500 per month.

I made sure I could sell properties inside the portfolio and have the bank recast the loan (payment and principal due).

In some ways, it's easier to have 1 loan per property.  But for me, the benefits of a portfolio loan outlined above outweigh the benefits of 1 loan per property.
 

@Cameron Riley, I use Showmojo for self showing and my entire showing to application process is automated.  I dont' go to the property, i don't take calls or emails or contacts from interested people and I process the applications as they come in.  A lot of people are afraid to go the self showing route but I believe it is the ONLY want to do it because it is such a time saver.  Before I did that, I was taking so much time!  My properties are in B and C areas and I use a Simplisafe security system that I turn off and on remotely while the property is listed.

Reach out to me if I can help you automate your process.  It's been a game changer for me.

I get 100 ish interesteds, 70 showings and 10ish applications in a week usually.  I have clear screening criteria that is in the listing and on my application paperwork and I process accordingly.  When tenant screening is set up properly, it's pretty cut and dry.  Either they get approved or they don't.

I only take Section 8 so the rent amount isn't really relevant.  I approve probably 20% of my applicants because I have very tough criteria and it's worked well.  

Jennie, my answers are after your questions in bold.

@Michael Fleet, I'm a local STL investor and have some loans with Together - congrats on the deal!

@Cameron Riley, ya gotta treat everyone the same per Fair Housing guidelines, generally.  So you can't charge 2 different rates. If you only want Section 8, advertise the higher rate and screen all tenants for that rent amount.

You may be able to discriminate based on source of income if your state and local laws don't prohibit it (they don't prohibit it in Missouri so I can say I ONLY take Section 8, which is what I do.  Or I could say "No Section 8" as well).

One other note - Section 8's only supposed to pay market rates up to the Fair Market Rent standards. I am able to get higher than market in a few of my properties due to some anomalies in the rent setting standards but it's not always the case. Just letting you know that in case you are going off of FMR listings somewhere - people often think they can get the listed FMRs but that's not usaully the case. It's weighed more heavily on "rent reasonableness." Depending on a Section 8 tenant's income, you may also hit a rent ceiling due to the 40% rule, where a tenant can't spend any more than 40% of their income on housing.

But I'm with @Brian Garlington, Section 8's the most stable and profitable niche out there, when done right.

@Jas Singh, I echo @Mike Smith's advice.  I only rent to Section 8 tenants and by and large, have great tenants who take great care of my properties.

Significant others moving in is a common issue in all rental segments, A - D, student housing, etc.  I think we find it more offensive in Section 8 of course because it's government funded but the truth of it is, you may be dealing with it anywhere.

I have several tenants who likely have boyfriends living with them and as long as they aren't an issue, I don't make it an issue either.  

In this situation, I think Mike's advice is sound.  Your lease should have a clause making it clear that occupants not listed on the lease are not allowed to live there.  I would notify her that he is not to come back and you will be checking.  Should you find him there again, you will immediately move to evict and notify the caseworker.  If she gets evicted, and you notify her caseworker, she should lose her voucher.  I find that good Section 8 tenants do not want to lose their assistance so you have a lot of leverage with this.

Generally, I approach my tenants in a calm, professional and "let's work together" way, but also a firm and clear manner so that they know the exact terms and the consequences if they don't follow them.

Good luck.