All Forum Posts by: Marcos De la Cruz

Agree with the old dogs here. Can be good with good tenants and we have some. But almost all of my worst stories come from section eight. Destroying the house calling board of health for tenant damages and literally every little thing creates huge expenses. Also the government always pays late (here in Indianapolis last year it was 7 months late!!!) Too many stories to count but a couple that stick out below.

Once had a tenant that let her baby go without diapers for maybe 6 months. We had to replace some the subfloors. Demo was 15k alone.

A tenant living in a 100 year old called board of health for drafting windows (never called us first) and BOH made us replace them within 30 days, well custom windows take longer than that to make so we got fined. Once they came in the tenant refused us entry for a month and we got another fine. We finally had to have the police go there and we forced the door open with this mom screaming and crying all day at us as we replaced 8 windows. Two of the workers quit mid job and I had to jump in and help finish while this mom is telling us her brother would be here any minute to shoot us. Police had left by then so not a great experience to say the least.

We currently don’t accept sections 8 applications.

@Marcos De la Cruz

Have you ever appealed the property tax increases on your Dallas rental? If you can find comps that support a lower assessed value, it's worth trying to appeal. You may able to find someone local in Dallas who could help you.

I've also known investors who do rent by the room. You have 4 bedrooms so that seems like a good size home. I talked to Padsplit and they manage SFHs renting each room to different tenants - the total rent is more than renting it out to one household. The one negative is with multiple tenants in a house is potential for conflict among each other but could be reduced by screening all of them well. 

Also Mid-Term Rentals to traveling professionals, people displaced for insurance reasons, or doing a renovation to their home and needing a place to live for  3 months or more are also possibilities. You would have to furnish the home and pay for WiFi/internet. 

Are you self-managing or paying a property manager? If using a PM, what percent of the monthly rent are they getting? 

@Marcos De la Cruz if you’re happy with the cash flows then it’s good.  Shopping your insurance and protesting your taxes are a couple of easy things you can do to reduce expenses.  

Depending on what your goals are a line of credit might be a good idea to give you access to quick cash for another acquisition 

Oh come on, your really pulling the punches here when talking about sec8 horror stories. 

TO put it in terms, I got to a point in sec8 where we'd come into a unit and say "Oh man REALLY, come on, can't it just be a dead body or something" lol. 

Yeah, and we seriously meant it. Dealing with a dead body was a lot easier and cheaper then some of the nightmares i experienced.

I still can't shake the memory of the one who painted the ENTIRE house in feces art. 2 stories, every room. COVERED. It must have taken him weeks, months.... It was like all he did was eat chili and "paint" day n night..... 

I actually tried to beg the city to let us sell it to the fire dept to burn it down for "training". 

Grease fires.... Oh man just fires upon fires upon fires..... We started issuing deep fryers but it didn't matter.  

Hey, how about when ya gotta replace a front door because swat used a armored car mounted battering ram to plow down the front door. Yup, been there seen that. 

Oh sec8.... 

Hey, I will give sec8 it credit, you sure won't get bored with it. Nope, no shortage of "WTF" moments there. 

@Marcos De la Cruz

Most of my rentals, when I first started buying in 2010, were section 8 through the housing choice voucher system in Cincinnati.  I don't have experience with Dayton, OH, but would imagine it is similar.  

When you say "section 8" tenants, are you looking at low-income housing tax credit type properties, or standard rentals that are in lower income areas and therefore cater to HCV tenants?  

For me, HCV was worth it when I started out.  But it was hands on.  I had fairly good luck with all tenants that I placed while I was self managing.  Because you can assume no Section 8 tenant has good credit, my leasing decisions had more to do with meeting each tenant myself to get a gut feeling based on their communicativeness, timeliness to showing, what questions they asked, whether they looked me in the eyes or avoided eye contact, etc.

The downside of section 8 was the annual, then bi-annual, inspections.  You are effectively turning the unit every year or two, even when the tenant stays in place.  Over the years, these mandatory repairs became more and more expensive, to the point that any rent premiums I was getting through section 8 was more than eaten up by the reinspection repairs. 

Admittedly, my properties were mostly in the path of gentrification, so overtime was moving effectively getting rid of my section 8 tenants and going with better qualified, higher rent paying market rate tenants.  But while I had my properties in section 8 it was generally fine.

Like any, if you show respect to the property and tenants, they will typically show respect to you and the property.  If you don't take care of issues, don't take care of the property, and don't keep things in good repair, you will have tenants that don't respect the property either.