All Forum Posts by: Tom C

Rich,

Utilities must be on, including working furnace.
smoke detectors on each floor.
Broken/cracked windows.
Locks on windows.
Handrails on 4 steps or more
Railings on any porch or deck above 30".
Electrical systems.. If you have 3 prong outlets, must be grounded, will test. No loose wires, uncovered boxes, loose light fixtures, cracked plates.
Water heater, pressure relief valve with tube, 6" off floor.
No plumbing leaks, even a drip.. Busted me
If you supply appliances in the lease, then everything must work, including all burners and knobs.
Everything must be clean.
Door locks, strike plates. No cracked jams.
Holes in walls or ceilings.
No flaking or peeling paint, interior and exterior if tenant has kids under 6 yrs old.
Good steps.
Tripping hazards.
Rain gutters must work and drain away from the house.

Now let me tell you what they busted me on. I had an old garage out back that didn't come with the lease. Had flaking and peeling paint. She warned me that it had to be taking care of before she came out. I pressure washed and repainted. She came out and there were paint flakes on the ground. She failed me. Plumbing. Slow sink in the bathroom sink and a minor drip in the basement. Failed. Front door is the 6 small window pane type. One pane had a crack. Failed me. She wanted it replaced or silicone. Hot water heater vent pipe, was not at a complete 90 degree. Failed me. Electrical.. I went through the whole house and took out the 2 prong plugs and replace with 3 prong. She came along and tested them and 3 of them did not ground. Failed me. I pulled them and put the 2 prong back in. Windows.. Broken sash cords. 7 would not stay up by themselves. Failed me. I went and bought these things called butterflies. Upstairs was turned into an attic. She opened the closet door and saw light were the insulation had blown back.. Failed me. A large pile of raked up leaves in the back yard. Failed me.

All you can do is make sure that the home is in move in condition before you call them out. I had planned on taking care of most of this stuff before the tenant moved in. Nope, has to be done before Sec 8 will approve it. I know next time what to look for. Trust me, all of these little things really cut into your time line.

Counter offers?? What state are you in?

Mark,

You bring up a good point, but my point is that I also not get anything near $1300 a month for a 3/1 from Section 8, like it has been mentioned that can be done else where.

It would seem to me that those of you who are finding it impossble to find these deals, should be able to. I look at it this way. I can do the deals that Mike is talking about all day long if I had the funding. These rentals are not in a war zone, but are in a very low to no income neighborhoods. The most rents will go for is $450 per month. Which means that the homes that I am buying are under 20K and need cosmic fixes in around the 2 to 3K range to make them rentable. It would seem to be that if you can't find these types of homes, then the renters can't find $400 rentals either, which would lead me to believe that rents are much higher, which would allow you to pay more for a property then I could get away with. In other words.. You should be able to then pick up a SFR for 60K and then rent it for $1200 per month. No?

Sean,

I think you are making this more confusing then it has to be. Look in the local paper or call some landlords and find out what the going rent is for a 1/1. You already did the hard part, by speaking to owner. Once you have the numbers in what you can charge for rent. Then add your cost of rehabbing all 3 units to make them rentable to your total cost of purchase, including closing and holding cost. If your rents are double or very close of your monthly PITI, then it could be a winner. Before you go any farther, the first thing you have to do is look at how much cash that property will produce. You already know that what she would like to have, 55K throw closing cost in there, so lets say 59K. There is a $600 PITI at 20 years right off the bat. Can this property generate $1200 a month rents? If so, then continue to further look deeper at these numbers. If not, then consider offering her less.

Yes, it can. I believe there are 2 ways for people to sign up for HUD, one is based on their income and the other is called flat. All you do it contact HUD and tell them that you have a property. They will put you in their database and when a person is looking for a place to live, they search the database and find the properties. Once a Sec 8 person wants to transfer their voucher to your place, HUD will schedule an inspection. They come out and inspect the place and in my neck of the woods, they are really strict.

See below. Remember that it is also based upon 30% of their income. As an example. My area says that I can charge up to $700 for a 3/1, but I could not go over 30% of his monthly income, so I had to drop my rate down $50.00 per month. Which left me with at monthly rent at $600

http://www.huduser.org/datasets/fmr/fmrs/index.asp?data=fmr07

yup.. sure enough. I guess they go by cost of living.

How in the world are you going to get $1300 a month on a 2 bedroom apartment from Sec 8 and don't forget, whatever they tell you, you can charge for rent is all you can charge for rent. If you get caught making deals with your tenants to give you more then that, you can go to jail.

Here is an example of some of those great deals people are picking up. A company from Texas bought a home in my area 3 months ago for 5K. They haven't done any work to it or even seen the property. They now have it listed for 32K. They gave me the access code to go and look at it last night. I didn't need an access code to get in. All the locks on the house are gone, stoled for scrap metal. Needless to say, its a $500 house. completely trashed and it would take a good 30K just to make it rentable and the neighborhood will not support that kind of investment.

Things that look good on paper aren't always what they appear. So more then likely the company will never be able to move this place and it will just be added to all the vacant properties in the hood.