I would stay away from section 8, pull credit and background, and call referrals, and look at pay stubs for everyone who applies.

Quote from @Brian Dela Cruz: @John ChapmanTypically, this would be treated as a sale, unless you reinvested the insurance proceeds into another rental property within two years (by either rebuilding or replacing), you can defer the tax under IRC Section 1033. 

Here's a bit about me and what I'm up to:Background:Industrial Property: I've got an industrial property with about $1.5 million in equity.Real Estate Experience: I've been involved in multifamily properties, developed some industrial spots, and managed short-term rentals.Current Projects:1031 Exchange Plans:Objective: Considerin a 1031 exchange from my industrial property into assets like self-storage, multifamily units, Section 8 housing, or mobile home parks.Request: Given the current market and lookin' for steady returns, which asset class would y'all recommend?

High rental demand (Section 8 too).

And for networking events with agents  - Under the Forums tab, there's an Events & Meetups section where you can submit Houston or your specific zipcode and find some.

., Purchase Price: $475,000 ($197.9/sq. ft.).Estimated Market Value: $402,000 ($168/sq. ft.).Financing Terms: 2% interest rate, with a 9-year balloon.Unit B Income: $2,049/month (Section 8 tenant through November 2025).Unit A Income Potential: Similar rent or higher; Section 8 cap for the area is $3,234/month.Monthly Loan Payment (P+I): $1,386.Cash Flow Breakdown (if both units are rented at $2,049/month):Gross Rent: $4,098/month.Vacancy (10%): $410/month.Operating Expenses (37.3%): $1,376/month.Net Cash Flow: $943/month.Key QuestionsWould you be comfortable paying an 18% premium for financing at 2%, especially in a market where current mortgage rates are closer to 7%?

However demand is very high, especially for section 8 which also doesn't pay very well because government funding is one of the lowest for Puerto Rico.

turnkey section 8 is not going to be like buying a brand new home there will always be differed items or stuff that does not work etc.. age of homes makes this impossible. then you add section 8 tenants and  there you go

If you are going to continue buying, you really want a lifelong mortgage advisor in your corner who will help structure loans in your best interest.

A possible solution could be to hire a handyman to cut out the section of drywall that has been water damaged and use a moisture meter to see if there is excessive moisture in the wood and other parts of the drywall.