All Forum Posts by: Jeremy S.

@John LaVecchia The biggest issue we have with Section 8 tenants is turnover (we like them to stay for 2+ years at a minimum).  Stability is a great way to evaluate an applicant, especially when there is no credit score to go on.  The easiest way to do this is to look at the information you gather on an application such as current/previous address and current/previous employer(source of income).  How long are they living at a unit for?  Is their source of income stable or has it been changing every six months?  

Probably best to knock on doors and introduce yourself (or your property manager) and provide a welcome letter.  The goal should be to make sure everyone knows where to pay rent and who to contact for maintenance.  This is also a great opportunity to try to set all tenants up on electronic rent payments, it will make life much easier.   

As for rent collection sites, it really depends on the size and scope of your operation.  I have heard of Chase Quickpay and Paypal being used with good effect for a couple of units.  If you have a larger portfolio your property management software will probably have a way to take electronic payments (most likely by setting up a separate merchant agreement).  Alternatively you can reach out to your bank and see their options on accepting ACH payments to your account.  I would try to avoid credit cards as fees are obnoxious (~3%) and stick to ACH payments if possible.  

I have a portfolio of mostly Section 8 units and have been doing it for eight years.  There are positives and negatives:

Positives

• Rent paid electronically on the 1st of the month (majority of rent, tenant still has a portion)
• Reduced evictions - Applicants lose their voucher if they are evicted so collecting the tenant portion of rent is easier.   The question we often have to ask short/no payers is "do you want to pay us $200 now or $900 without your voucher?"

Negatives

• Increased vacancy - At least in Chicago, the unit must be vacant before an inspection can occur.  Add to that the processing time of moving papers and potential for a failed first inspection, it can take 30+ days before the applicant moves in.  
• Bureaucracy - Expect plenty of red tape, delays and unexpected problems.  
• Limited recourse - Tenants typically have little income so collecting on any judgments/damage is practically non-existent.  
• Inspections - This might be a local issue but these have been getting stricter and fail rates have been increasing.  Quality control inspections (after a pass) can make a simple passed inspection turn into three (initial inspection, quality control fail, 2nd inspection from quality control).  Inspection times are only provided the afternoon before so it makes scheduling difficult especially if you have multiple inspections on a day (they do not always consolidate inspections of multifamily buildings).  

On screening, we never hold Section 8 tenants to FICO credit scores as many are underbanked and the scores have little predictive insight for this population.  I personally have had many great long term tenants who have been unscored (shows up as a no hit) by FICO.  However, I recommend screening every tenant to review for criminal, evictions and overall stability.

I am new to the area and doing my first project in South Scottsdale.  Currently looking for a tear off (2 layers) and shingle on a walkable roof, ~25 square.   Does anyone have an idea on the typical cost per square for the area?