All Forum Posts by: Matt Leber

@Mario Cuartas I have a couple rentals in Central Florida that I would consider low income neighborhoods that I rent out through section 8. I can tell you that if you screen well and take care of the property, communicate well with the tenants then low income rentals can be a valuable part of your portfolio is your goal is cash flow. Appreciation will be slower but that is icing on the cake. I have also had these tenants tell me how grateful they are that they found a nice clean place to live with their family and how much of a blessing I have been to them by providing suitable affordable housing. It’s weird to run a for-profit business and be considered a blessing, but that’s truly what it has been, a win-win for both me and the tenants.

@Jorge Ydlibi when you bought the house originally the taxes were based on the assessment from the previous owner. That previous owner might have bought it long ago and/or had a homestead on it causing the taxes to be low. If that’s the case it’s normal for taxes to increase in the first few years when they re-assess closer to your purchase price.

@James Tolson my profile says Orlando but I do most of my real estate buy and hold investing in Brevard County and have a number of rental properties in the area because the numbers work out better than where I live. Let me know if I can be of any help on your journey!

@Collin Bryston Adams I’ve seen some deals like this in my market where I’ve considered buying something I wouldn’t normally buy just bc the section 8 rent is a few hundred higher than what I feel I could get on the open market. I’ve always reasoned myself out of those deals bc, even if I plan on doing section 8 with the deal, I don’t want to be “forced” to rent to section 8 to make the numbers work. If the numbers work for me either with section 8 or open market, I’ll go for it. Also, this deal might be harder to rent out than usual bc 5 bedroom vouchers are less common. If someone only has a 3 or 4 bed voucher they’re not going to qualify to rent this house.

@Stephanie S. I guess it would depend on the price range of the properties you are looking at. If you are buying $100k properties, you might be close to being able to do 4, but $100k properties in most Central Florida markets I see need some work to get ready, and you’ll have closing costs, and you’ll want to have some sort of buffer for the unexpected (especially during covid and cancel rent culture). If I was looking at $80k to invest, I would do 2-3 single family properties in that range and make sure I wasn’t leaving myself too thin on reserves. Or go for a multifamily 3-4 unit.

@Brooke Hallock you could buy a single family in an area you like to live in that would work as a rental if you ever decided to move. If you buy something with an affordable mortgage payment you can lock in a low cost of living and start saving for the next deal. If you decide to move in the future then keep it as a rental.

My wife and I did this. We haven’t moved yet bc we realize one of our biggest assets is an really affordable cost of living and it’s allowed us to save enough toward 8 additional doors in less than 5 years. We love where we live and it would also be an amazing rental if we eventually decide to move on.

@Jonathan Feliciano I agree with @Tyler Gibson. You’ll see more .7-.8% in Orlando. 1% would be a great deal but hard to come by recently.

@Ryan Lam if you want a little bit of appreciation along with your cash flow look at Palm Bay (west of I-95), West Melbourne, Port Saint John (North Cocoa), Merritt Island, Rockledge. I would include Viera, Suntree and Beachside in this category but I think cash flow might be difficult there.

There are plenty of other areas in Melbourne, Cocoa, Palm Bay, Titusville especially along hwy US1 that you can achieve great cash flow in but may appreciate at a slower pace.

@Cooper Forbes I haven’t done a multifamily deal since late 2018 but I purchased two single families and did an investment property refi in central FL this year. Feb 2020 purchase was 3.25%, Oct 2020 refi was 3.125%, Dec 2020 purchase was 3%. I would think most lenders might ask for 25% down on multifamily and the rates would be similar.

@Chris Klingemann I think it would be a net zero effect if the rent amount is about the same as your mortgage. Unless you have some high HOA or CDD fees on top of the mortgage amount that you are not paying if you decided to rent.

One thing that could help you though...if DTI is an issue, I've heard some lenders will do a "rental appraisal" as part of your mortgage approval process to get the fair market rent of the investment property you are purchasing. This rent appraisal amount (or a percentage of it) is applied to your income projection and offsets some of the new debt projection. If the property you are buying cash flows really well, your DTI could in theory get more favorable with the purchase.