Quote from @James Wilcox:
Quote from @Samson Hall:
Hey everybody, I’m getting out of high school and looking to do my first deal. I’m looking to do section 8 rentals in the rust belt, states like West Virginia and Ohio, Although I live in Florida. Not looking for concessions here just seeing if anyone has experience in that field. Although I’d like to do a large dscr loan and get 4 to 5 three and four bedroom units, I’m likely goin to start with just one quality property in order to establish proof of concept to present to future down payment partners or private money lenders. If anybody’s got advice I’m here to learn and listen, thank you!
@Samson Hall I agree with some of the concerns that Jonathan has brought up. S8 isn't for everyone and does have draw backs. However, as you pointed out it does have advantages. You have done some homework and I applaud that.
Now that being said I kind of doubt your numbers are correct on your example. I really doubt with a DSCR loan your monthly cash flow is that on this example property. I would maybe even wager you are negative or break even just looking at cash flow. FMR displayed on the HUD site is with utilities included. That would cut into your expenses a good amount, add property taxes, insurance, property management, repairs, capex, and a small vacancy rate and you can see that number starts to go down rapidly. Best thing to do is to call the local housing authority and they can explain some numbers for you and the process (assuming you can get ahold of them).
You could always just post the numbers here or in the proper forum and double check it.
Hey thanks for taking the time to call me out on my mistakes(IK THAT MIGHT SEEM SARCASTIC, ITS NOT)I did take into consideration cap ex, repairs, property management, debt services, taxes, and insurance. I didn’t factor a higher interest rate( 8-10%), lastly I mistook Cashflow as net profit for each month (noobie mistake).
I recalculated and my monthly net profit comes out around 700/mo, although Im not aware of the utility costs in the area I have heard that if you choose to have HUD roll your utilities in they take 20% of your rent for the utilities each month(110% Fmr to 90%). In my case that is roughly 400 dollars, which is what I factored in to my most recent calculation as well as a 9% interest on the loan. Thanks again for calling me out, I'm still learning and I greatly appreciate it! Better now then later anyways lol.
