All Forum Posts by: Natan Gutt

Yes, the obvious answer would be to get a property that cash flows that amount. But at its core what I am looking for is what markets seem to have the highest cash in cash returns.

Oh come on now, you can't be THAT green....

If all your going to do is chase that 1 #, oh man, dude your so scr#wed!

Sec8 COC is NOT the thing to chase, lol, NEVER. COC is the most worthless metric to watch in sec8 buddy.

What matters is retained NET.

There is a TON, and I do mean a TON of places that will pencil out with huge COC. And there is damn good reason for it, the operational impact and expenses will eat you ALIVE!

Sec8 is all about operations, Operations, OPERATIONS. That's where you make or loose $ in sec8.

I can appreciate your opinion if it didn't reflect a tone of me being ignorant. Nowhere did I say is CoC my only metric, and asking a question shouldn't come back to about my greenness or me being screwed. Others have contacted me privately here on bigger pockets to help me understand the different markets they have worked in sec8 on the returns they have received. If it weren't for the fact that I already have a few great cash-flowing properties in MN from COVID time and have some experience I'd feel like you cared more to show ignorance in my question rather than truly help.

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@Drew Sygit

Yes, the obvious answer would be to get a property that cash flows that amount. But at its core what I am looking for is what markets seem to have the highest cash in cash returns.

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Quote from @James Hamling:

Quote from @Natan Gutt:

Hi,

I am looking to start investing in section 8. I have a few long term rentals in Minneapolis and looking to find the right city to start in. I was getting locked in to start in Cleveland when the agent I was working there said that you can never redeem the full amount of the voucher because it’s always higher then fair market value of the rent.

For example. 3b 1bth house voucher is roughly $1,550, but the rents get no where near that much apparently and cap at around $1,300.

Is there a city that people do section 8 in that has houses for 100k close to turn key and also are high enough rents to match the voucher and take full advantage of that amount?

Thank you ahead of time for your help

Why not looking right here in own back yard?

I don't want to say too much on public forum but, MN is high income state, which makes for some of highest median incomes in US, which makes for some of the highest paying sec8 in country.....

Is it possible to hit 2% in MN sec8, yes it is. Meeting 1% rule is an expected MINIMUM, FYI.

And NO, I am NOT talking Minneapolis/ St Paul, hell to the no-NO! I mean sure, plenty do great in those sec8 pizz-ponds but "affordable housing" is in EPIC demand all over, and there IS far FAR better markets for one to start playing in then that.

If do research on sec8, learn how it works, how the payment standards work etc., it should come very clear very fast where the big opportunities are. From there call the sec8 authority in that area and ask if they need more properties, and prepare for the laugh. The biggest problem is filtering the 100 or so applicant's per week.

As for getting less then payment standard calculation, that stands true in theory. Here in MN, every market I have "played", I've never seen it nerf'd down from payment standard calculation.

I have seen "noob's" have issues with, say, a 5br home and trying to get that payment standard from a 3br voucher holder. So again, do your research to learn the ropes of the rules & reg's. Yes, those 7br homes look to be insane cash-cows, and they would be IF, if you can find an approved 7br voucher holder, which is very rare.

But again, your backyard out performs anything I've ever seen/heard of for anywhere Ohio, in sec8 strategy. It's not too hard to net $1kmnth per unit in MN in this strategy, in OH, good luck. Sure, the % is similar, but on much smaller $'s, that's the difference.

And let's be smart, would ya rather go where every a-hole from around the country is going to produce more rental inventory, or operate where supply is still insanely constrained?

The reason being, and maybe I assumed, but with the amount saved to start a portfolio, 150k, I thought a city like Cleveland or for the sake of argument Detroit, would stretch that farther for more homes. My criteria being C class homes around 75-100k near turnkey ready. If you are saying that's a possibility here, then yes, I agree, I do need to look in my own back yard.

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Thank you to everyone who replied.

I guess to clarify what I was asking is what was being presented online as to why Section 8 can be lucrative. When you have mortgage, insurance, tax, vacancy, maybe utilities, and maintenance you could reach a 20% CoC return. After doing my diligence when I thought Cleveland would be a good city, it was close to 8-11% CoC return. I was asking which cities would have that price range of a Section 8 home, and would have that larger rent amount, to get that higher CoC returns.

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Hi,

For example. 3b 1bth house voucher is roughly $1,550, but the rents get no where near that much apparently and cap at around $1,300.

Is there a city that people do section 8 in that has houses for 100k close to turn key and also are high enough rents to match the voucher and take full advantage of that amount?

Thank you ahead of time for your help

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Originally posted by @J Zev J.:

Hi @Natan Gutt - I think what Dan is recommending is to think of the long term picture. You'll want to have a relationship with a bank as you expand your portfolio which is normally easier with a local bank or credit union. In terms of your other question, yes it's good to keep the rental activities in a separate bank account. Just look online where you're located for banks with good reviews for online banking. Check out the reviews for that bank's mobile app too before deciding.

In general should there be a one account used for multiple properties or one account for each?

Thanks!

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@Zev J.

Ok sounds good!

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@Dan Weber

Hey so I got my loan from a lender not through a bank. What I’m asking is for the finances of the rental property is there one bank that’s better then another.

Sorry if that wasn’t clear

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I reposted this in land lording. if this could somehow be deleted please.

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Hi everyone!

So I just put in offer on my first investment SFR. From what I understand I should be opening a separate bank account for everything that has to do with the rental financials.

My question follows; is there a bank that is preferred for this?

Thank you for your help!

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All Forum Posts by: Natan Gutt

Natan Gutt has started 6 posts and replied 25 times.

Post: Section 8 Voucher Redemption

Post: Section 8 Voucher Redemption

Post: Section 8 Voucher Redemption

Post: Section 8 Voucher Redemption

Post: Section 8 Voucher Redemption

Post: Banks for Landlording

Post: Banks for Landlording

Post: Banks for Landlording

Post: Banks for investment properties (not a loan)

Post: Banks for Landlording