All Forum Posts by: Matt Leber

@Marcele Johnson get a security deposit (I require one equal to 1 month rent) from tenant via money order or cashiers check on hud move-in inspection day or earlier. Sign the lease on inspection day, too.

For first month rent, the section 8 office will direct deposit their portion straight to your bank (if your inspection is toward the end of the calendar month, you might get 2 rents on the first day of month two). You should collect the tenants portion of first month rent in cashiers check or money order on Tenant’s move in day. Then give them the keys.

@Chai Jonn cash flowing SFHs in that price range are pretty much our wheelhouse here in Central Florida. Specifically Brevard County is where we’ve had some success.

@Hayden Albert definitely get a security deposit on the first unit. As for the 20 year tenants, let them stay if they’re paying. I wouldn’t pour money into cleaning it up until they’re gone, unless it’s severely under market rent. In that case, ride this virus out with the current tenants and then raise it to market. If they stay, keep them and delay the turnover costs. If they move, get the unit cleanup up then.

@John Voychick my units are on west side Jacksonville as well. 3 out of 4 paid rent, but 2 out of the 3 that paid were late. I waived late fees as free they paid them and am applying them toward May.

@Nicole Schertzer section 8 does a ‘move-in’ inspection when the house is vacant awaiting a tenant to move in. I think furniture would be OK, but keep in mind that if you have something in the house, it must work. Just make sure the furniture is not blocking walls and windows and stuff the inspector is going to want to look at. If you’re not planning on keeping the furniture there, I would personally get rid of it before this inspection. For this inspection there should be no one living at the premises.

Then, each year the housing authority will do a yearly inspection of your tenant is renewing their lease. This yearly inspection will have someone living at the premises because it is your tenants rental home at that point.

@Nicole Schertzer the house is not approved for section 8 based on the house itself. You have to have a section 8 tenant give you their landlord packet, which you fill out, give to the housing authority, and if they allow the tenant to proceed with your home they will send out an inspector. Once the inspector passes your house then your house is approved.

If you list your 3 bedroom house for rent at $1400 and the bf only has a 1 bedroom voucher for $750, the housing authority is not going to entertain that arrangement unless you want to drop your rent quite a bit. I think your best bet is to wait for the 3 bedroom voucher holder to clear the process and get her packet to start the process. Or find another voucher holder now who already has a 3 bed voucher ready to go.

@Jacob Warner my advice would be to look for a 0.9-1% rule or better SFH in your new area in a neighborhood you like and can see yourself happy staying in long term (even if you know you probably will upgrade at some point). That way you can move in for a year, learn the area, and keep it as a cash flowing rental whenever you finally move out. Try not to allow emotions to guide your purchase. Just buy some simple SFH that the numbers will work on.

This is what my wife and I did in Orlando. We bought a home that is the smallest in a good neighborhood. We know it’ll probably be too small to our one-day family, but we’re happy to stay for now and the cost of living is low. This low cost of living has allowed us to save and pick up 7 rentals since late 2016. Our home will eventually become part of that rental portfolio because the numbers will work great. But if we fall on harder times and decide to make our home work for a longer period of time (maybe forever), we would still be happy where we are. Will just need to get some bunk beds for the kids haha!

@Mauricio Quintana from what I understand, you can charge what you deem to be market rent regardless of the payment standard set up by section 8. As long as your applicant is approved through your housing authority to pay what you advertised your unit for and as long as you don’t broker a side deal after the HAP contract is signed for additional rent you are OK to proceed.

For example, for my zip code in Melbourne FL, the 4 bedroom payment standard on the section 8 website is $1467. If I advertise my unit on the open market for $1500 per month and a section 8 tenant is interested and gives me their packet and I fill out the packet stating the rent I am charging is $1500, there is no surprise side deal because all parties are aware of the rent I am charging. The housing office will then either approve the rent amount or tell me I have to lower it based on the tenant. Just because my listing is above the payment standard, does not necessarily mean they will force me to lower my rent. My sec 8 inspector told me he has “wiggle room” to approve above the published payment standard if he decides the unit and neighborhood meets the price I am asking. So, maybe $1500 is OK.

Then, when inspector has approved your rent amount and inspected your unit to make sure it meets or exceeds minimum housing standards, they will tell you what portion of the $1500 the housing authority is going to pay and what portion the tenant will pay. This is based on the Tenant’s income and family composition. In most cases they do not want the tenant paying greater than 30% of their income for rent and utilities.

So, in our example the rent is $1500. Say the local utilities average is $200 per month. That means there is $1700 in total living expenses. If the tenant makes $1.66k per month (20k per year), then 30% of their monthly income is $500. So, the housing authority will pay me $1200, the tenant will pay a total of $500 ($300 of which goes to fulfill the monthly rent and $200 to pay utilities).

This is how I understand the process in my area. Not sure if there are intricacies or differences from area to area.

@Miguel Oliviera we have a few multi units in 32210 (west side Jacksonville) that do pretty well. They are 2/1s that rent for $725 each and clear us almost $400 per door on a typical month. But, we have seen evictions, late payments and have had some turnover. Probably a C/C- neighborhood.

@Marco Morkous I wouldn’t say it’s “quick and easy” but it’s definitely a good way to help your portfolio be a little more recession resistant. There is paperwork and an inspection process that must be followed and it can take some time if your unit doesn’t pass minimum standards the first time around. There is also a reinspection each year that must be passed. But the money shows up in your bank account on-time every time and the tenant should be incentivized to adhere to the lease because they can get booted from the program if they don’t.