The Section 8 BRRRR Strategy That Beats Regular Rentals
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- เผยแพร่เมื่อ 11 ก.ค. 2024
- Section 8 BRRRR investing seems like a niche within a niche. To start, you have your classic BRRRR strategy (buy, rehab, rent, refinance repeat), a method that many real estate investors have used to gain vast amounts of equity in short amounts of time. Then, on top of the BRRRR, you have section 8 rentals, which many investors stray away from. Both of these investment strategies can be thought of as “advanced” rental property investing methods, but combining them can almost automatically guarantee you phenomenal rent, for years (if not decades) to come.
One investor known for his expertise in both section 8 rentals and BRRRR investing is Dr. Joe Asamoah. Regularly, Dr. Joe may be the smartest person in the room and he really shines when speaking about the often forgotten benefits of section 8 rentals. While many investors simply think of D-class houses and D-class tenants when accepting section 8 vouchers, Dr. Joe disagrees.
His theory is simple-Find C or D-class properties in B-class neighborhoods, and rent to A-class section 8 tenants. The payoff? Very long-term tenants with guaranteed rent whose lives you can benefit directly. And Dr. Joe isn't just hypothesizing about this-he’s been doing this for decades and may be why he has tenants who have stayed with him for over twenty years, paying rent every month, on time.
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Hear Joe’s Previous BiggerPockets Podcast Episodes:
Part 1 of Today’s Episode: www.biggerpockets.com/blog/bi...
Episode 356: www.biggerpockets.com/blog/bi...
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5 Reasons Why Section 8 Tenants Are the Best Renters:
www.biggerpockets.com/blog/se...
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Grab David’s Book “Buy, Rehab, Rent, Refinance, Repeat”:
store.biggerpockets.com/produ...
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Connect with Joe:
Website: joeasamoah.com/
Instagram: @drjoeasamoah or / drjoeasamoah
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Connect with Rob (Roubilt) on TH-cam and Tiktok:
TH-cam: / robuilt
TikTok: / robuilto
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Connect with David and Rob on BiggerPockets and Instagram:
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Instagram:
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Episode 575
Show notes at: www.biggerpockets.com/show575...
0:00 Intro
1:46 Quick Tip
5:20 Joe's Newest Section 8 BRRRR
12:10 Exterior After Pics
15:14 Interior After Pics
18:54 Rehabs, Permitting, and Red Tape
21:14 Renovating the Basement
26:43 Heavy on Rehabs, Light on Headaches
31:19 Finding Quality Tenants
40:55 Common BRRRR Problems
48:22 Final Rent and Refi Numbers
57:48 Connect with Dr. Joe!
![แขกคนแรกร้านแจ๊ส [ซี - เอมมี่] | iJazzKhunJang](http://i.ytimg.com/vi/XP6C9kulFfc/mqdefault.jpg)
I really liked Dr. Joe's take on treating tenants like human beings. We only have one rental but made sure to send them birthday cards on their birthday and a cookie basket on Christmas. These actions were completely inspired by the things he does for his tenants.
Thanks for the kind words Shawn. In my experience there are two assets when considering real estate: (i) the physical asset, and (ii) the human asset aka the tenant. Most investors focus on the former. I've found that true sustainable, long-term success especially if implementing the BRRRR strategy requires that you if you take care of the latter, then they will take care of the former. If you don't take care of the latter, then they may jeopardize the former.
Thank you Dr. Joe for taking time to be interviewed, so others can learn. My favorite guest to listen to! Great show!!!!
I have never been more eager to get into this before now, not just because of my own personal gain but also to be able marry that with improving the quality of life of others. I am officially committed to this channel and the education it provides!
Just fyi- in California (LA vouchers) it’s been a nightmare. If you can cover minimum 3 months of rent then go for it.
We appreciate Dr. Joe's knowledge. I remember he used to be on bigger pockets often. I miss those times. Thanks for bringing him back.
Thanks for the kind words Tee. My goal is always to provide the Bigger Pockets community with quality, actionable content. I'll leave it up to the good folks at BP when I'll be back.
This is my favorite episode so far, such good information. He sounds like the type of investor/landlord that I want to be. I need to watch more of Dr. Joe!
I LOVE Joe, he is so amazing and I was a big fan since his first episode on Bigger Pockets a few years back. Informative and helping me with expansion into the Section 8 investing market. Thank you, thank you BP.
Thank you for sharing 😊 love Dr. Joe how he breaks it all down!
So glad to see Dr. Joe back on the show. The information is invaluable concerning his strategy.
Thanks for the kind words Veronica. I'm glad you found the episode invaluable. My goal is always to provide quality, actionable information to the BP community. I'll leave it up to the good folks at BP as to when I'm back.
I agree always that We all must consider that our properties should be in a perfect condition, before We offer them to our tenants, and also, I'm trying to develop a monthly system where I could make a conditions check list in all my future properties.
Thanks again Dr. Joel and as always to the B.P. Team!
you guys are always bringing in excellent content! I love every single video... :)
Thank you for having Joe on again his first interview blew me away and I knew I needed more from him
Thanks for the kind words De'rick. I always enjoy providing quality information to the BP community.
I love these guys, awesome video showing us before and after pics and the vision that goes into it....great inspiration and so much to take away from these videos, thank you !!!!
Thanks for the kind words Jason. I always enjoy sharing actionable content with the BP community. Feel free to engage with me on Instagram when you get a chance.
There's so many nuggets of wisdom in this episode! It will be on my replay list! Thanks everyone especially Dr. Joe!
Thanks for the kind words Mario. I share more nuggets each Wednesday on my Instagram livestream @ 7pm EST. Lets engage further.
Love this interview. I purchased an out of state rental, about to close on my first short term rental and I’m in Brooklyn NY getting so inspired by Dr Joe to apply his strategy to my expensive area. The contractor team is KEY !!!
Thanks for the kind words John. I agree that having the right contractor is very important. May I also say that having the RIGHT TENANT is just as if not more important to your LONG TERM sanity and cashflow. Having bad tenants will result with you being a "burnt out landlord" and make you crazy. Don't believe me? Spend a day in your local landlord/tenant court and you will understand what I'm talking about. Let's engage further on Instagram or on my weekly Wealth Wednesday livestream each Wednesday @ 7pm EST on Instagram.
Great interview Dr. Joe you are awesome
Excellent interview gentlemen, you guyz hit it out of the park with this one. Keep up the good work 👍
Thanks for the kind words Jose. Let me know on IG if I can answer any other questions.
Love the super detailed podcasts!!!!!
Hi Sam. I'm glad you found the episode informative. FYI, I delve into various real estate topics in detail every Wednesday on my "Wealth Wednesday" Instagram livestream. Feel free to check it out @7pm EST each Wednesday. Maybe I'll get an opportunity to answer more of your real estate questions.
Love this! Thank you!
I really appreciate this format, which is a bit like a full episode’s worth of a deal deep dive. I find it much more helpful in terms of understanding the nitty gritty details of how to actually put strategies into practice as opposed to the episodes where the guest describes their years-long investing journey. Those tend to be more inspirational and less practical. I’m already inspired. I need to know which strategies are currently working, the thinking behind them, and which pitfalls to avoid.
In the future, I’d like to see maybe a series of interviews about how to work with section 8 tenants, where to find them, how to know their budgets, how to screen them, what to watch out for, pros and cons, etc. Thanks to Dr. Joe for sharing his wisdom with us. I’d love to hear even more.
Thanks for the kind words. Feel free to engage with me on Instagram. Also, I hold weekly "Wealth Wednesday" livestreams 7pm EST on Instagram. I discuss various real estate related questions and share wisdom aka lessons learned from my over 30+ years investing and landlording experience. I usually have a Q&A session towards the end of the livestream. I hope this was helpful.
I love when Joe comes on. It’s something about his interviews that I just have to listen to 10 times over.
Wow. 10times!!! Thanks for the kind words. Feel free to connect with me on my Wealth Wednesday Instagram livestream each Wednesday @ 7pm. I usually have a Q&A session towards the end of each program.
this is one of the best episodes. Dr. Joe is very knowledgeable, and funny!
Thanks for the kind words Jordan. It's always a pleasure to share quality, actionable content with the BP community.
Very helpful Thank you for sharing
When I saw Dr. Joes face on the thumbnail, I knew it would be good info.
Thanks for the kind words AK. Let's engage on Instagram.
Love the new format. It's great. Dr Joe did great.
Thanks for the kind words D.
My goal was to provide quality actionable information to the Bigger Pockets community.
My goal this year is to have 1 section 8 property on my portfolio
Thank you Dr. For sharing your wisdom!
Thanks for the kind words R.R. I host "Wealth Wednesday's" every Wednesday @ 7pm EST on Instagram where I delve deeper into various real estate topics. Feel free to check it out and engage with me.
@@DrJoe-qk4bl I will definitely chime in! I am actually a Housing caseworker, and a home inspector from the Bay Area, CA, but also investing on the side. Just completed my first BRRRR in the mid-west! Looking forward to more of your content!
Very informative for high end, stable, good section 8 tenants:)
Thus is my Goal Dr. JOE
This, hands down, has been one of my best BP episodes. It couldn’t have come at a better time. Looking at some Multifamily in the DC area and I’ve been discouraged a few times by Section 8 and the perceived problems around it, but this has totally given me a different perspective. Thanks David, Rob and the BP Team. I definitely will be reaching out to Dr Asemoah as well.
Thanks for the find words Opeoluwa. I agree with you that there's so much negative baggage associated with the $25B Section 8 program. I think if more investors take the time to understand how the program really works, more investors will participate in it since its a great source of guaranteed rent - in good times and bad.
@@DrJoe-qk4bl Over the yr's Sec 8 tenants have been the very best!!! I've evicted many market rate tenants. You are correct appreciation is the game plan. Even having a negative cashflow isn't a problem because it is deductible. Yet 10% / yr appreciation on a $900,000 asset is very COOL!!!
Great point @reseller7. In appreciating markets, the REAL money is not a few hundred bucks cash flow each month. Rather its renting to great tenants that pay the rent, take care of your property and stay a long time so you can get the true value of APPRECIATION.
@@DrJoe-qk4bl According to future calculator ... at just 10% appreciation/yr your property will be worth $2.4 mil in 10 yr's!!!
Where else can people make huge amounts of money and not really have any money invested because they've pulled the invested money out. Only real estate!!!
Very informational!! Re-watching to write notes 😀
Hi Rocio. I'm glad you found the episode helpful. Feel free to engage with me every Wednesday @ 7pm EST on my "Wealth Wednesday" Instagram livestream each week. I usually delve into a different real estate topics and end with a Q&A segment.
Love seeing Rob on the podcast. He brings great value to an already great podcast.
Rob did a great job on this podcast episode. He and David asked great questions and I enjoyed the dialog.
I love the visual aids!
Amazing. Thank you.
Thanks Dr. Asamoah!
Thanks Dhow.
Like this kind of content 👍🏼
Joe is always the best, he really cares about his tenants. I also think David's hosting skills are really improving, great job!
Thanks for the kind words Allen.
Thanks Allen. I agree that David is doing a fantastic job. I really enjoyed the interview. Both David and Rob kept me "on my toes" with great questions. I must also give a huge shout out to Eric (the show producer) for weaving in the video footage and photographs into the TH-cam podcast version.
Dr. Joe, you've been one of my favorite people in the real estate industry since I first listened to you couple episodes ago. I appreciate all the great wisdom you continue to share and will continue to root for you. My wife and I will be sure to apply many of your principles in our RE investments. Be blessed!
Thanks for the kind words Kency. My goal is to provide quality, actionable content to the Bigger Pockets community. Much of the "wisdom" you mentioned is based on real world experience as a real estate investor for over 30 years and living through four real estate market cycles. The fact is, during good times, everyone thinks they are genius' because they are making money. The true test is what happens when you have setbacks, disappointments and are hit with a unexpected curve ball. Now what? Take it from me, you don't want to be guy standing when the music stops. Not fun. There's a lot to be said about having a reliable, stable, predictable and guaranteed rental income stream especially during downturns when tenants lose their jobs and can't pay their rents. Lets engage on IG or on my Wealth Wednesday livestream each Wednesday @ 7pm EST.
Ok David, you mentioned Indiana here. I’m going over there to invest soon for cash flow. I will be by Louisville though. Going to start with a house hack Medium term rental then considering Section 8 as well. Thought is was funny though that you mentioned the state Im going to. I will be reaching out to Dr Joe too If and when I go that route. Great content guys!
Love the idea of making it more 'house hackable'!
Great way to analyze
Great episode , I was feeling a bit bad comparing my house how to a lot of the house hacks out of state , mine I spent 715k 30k rehab , but is currently rented for 5k a month with myself living free in the basement unit , If I were to move out I can rent my unit for $1400
Love Dr. Joe been watching what he does . Felt like this was a short episode tho 😞
I was really hoping for more details on setting up a Section 8 rental, but otherwise this episode is solid gold.
Hi Adv Hawk. In reality, there's only so much that can be covered in a 60minute podcast. For example, when I teach tenant screening, I normally cover it in four hours since there's so much to cover including tenant role play. With this said, I'm glad you found much of the episode "solid gold."
And section 8 details might differ state to state.
There's nothing special to setting up a Section 8 rental. I have Section 8 tenants in my rentals in California and only need to make the units available for inspections one time each year which is great because the inspectors will ensure the rentals are in good working order and habitable so they keep both tenant and landlord in check. Other than that it's guaranteed rent checks every month.
@@JC-qu7iw if so, why dont everyone do section 8 rentals then
@ck kendrick you would have to ask the landlords who refuse to take section 8 tenants that question.
All I know is my section 8 tenants are risk-free from economic recessions, covid shutdowns, the tenants health or sickness and even zombie epocolypse (given govt. still exists). I never miss a beat from my section 8 tenants.
You have to remember the government's viewpoint is; we have a right to food, health and shelter and will always provide for the people who need these things. All you have to do is find the programs that offer these services.
Good information
Let’s goooooooo good doctor!!!!
Big Fan - Keep it up!
Hi Mason, thanks for the kind words.
I do section 8 because of Dr.Joe. Thanks Dr.Joe!
Thanks for the compliment. My goal is to help more investors participate in this $25B program so that we can make money AND make a difference in people's lives.
@@DrJoe-qk4bl Most investors are afraid, I’m having a section 8 turnover due to big renovation needing to be done in one of my units coming up, and she is going to have a hard time leaving, because other landlords won’t accept a voucher.
I love what he does to make sure his appraisal comes in high.
I also appreciate the idea of asking lender to send for yet another appraisal!
Thanks for the kind words Katherine. What I shared was based on setbacks and disappointments from the appraisal process. I no longer just cross my fingers and hope for the best as part of the BRRRR appraisal process - been there, done that. As you can see, I'm no longer just a passive participant. Ask me further questions on Instagram @drjoeasamoah and visit my website joeasamoah.com to learn more!
Great interview! Question about making an option for the basement as a separate unit in the future. Is it plumbed and wired for an additional kitchen? Does it have it's own living space? It's own HVAC?
No words can describe the amount of Rich, Detailed, and Instantly Applicable information I have received since David Greene become the host.
Thank you SOOO MUCH BP. You are definitely changing lives even more now
I agree Chibuzor. David is doing an excellent job as host. He had very big shoes to fill after Brandon left. I think David's just fine. He and Rob certainly kept me "on my toes" with some great questions.
He is a wealth of priceless knowledge.
How much was mortgage while the building was undergoing construction?
How did you go about finding C/D class properties?
How were you able to narrow those searches?
I would love to see an example application please . Very informative info
Hi Van, as I mentioned on another post, I think its inappropriate for me to sell any of my products or services on the Bigger Pockets platform. With this said, feel free to engage with me on Instagram or each Wednesday @7pm EST on my Wealth Wednesday livestream.
Just a note. I know a person who used to do this, but not in B neighborhoods. I say used to because one day his construction crew was robbed at gunpoint during the rehab and had all their personal items and tools stolen. There are much cheaper properties to start with in DC, but you just have to be careful.
Is that yellow flex pipe attached to the gas meter??? If so PLEASE change it ASAP!!!
I’m working with buyers in south chicago buying section 8 now.
It’s interesting people give CHA a bad rap, but the cash flow is definitely more reliable.
I agree with you Tim. The Section 8 program generally is not highly regarded by most investors. Dealing with Public Housing Authorities (PHA's) like any bureaucracies can be challenging. However, I've found that if you take the time to develop relationships within PHA's, then the process is not so bad. In fact its very manageable.
Exactly! Ask landlords during COVID who got paid , bet most that did were residents on voucher programs. Congrats by the way. The Chicago market is appealing but coming from NY every where else has appeal.
@@johnjohnrn8655 if you’re looking for investment in Chicago. Let me know that’s what my group specializes in. I can help find something.
Great content! Is there somewhere that I can purchase a template and/ or copy of Dr. Joe's 8 page rental application?
Hi Scott. I think its inappropriate for me to sell any of my products or services on the Bigger Pockets platform. With this said, feel free to engage with me on Instagram or each Wednesday @7pm EST on my Wealth Wednesday livestream.
Excellent episode! How do you start a section 8 rental? What’s required?
Thanks Arslan. I suggest the following in starting your Section 8 journey: Step 1 - Set goals and understand your strengths and weaknesses. Step 2 - Learn the basics - there no need to try and learn everything on day 1. Step 3 - Identify a coach or mentor with a proven track record of success (as the saying goes, a wise man learns from his mistakes, however, a genius learns from other people's mistakes.) There's no reason to recreate the wheel - its already been created by others. Step 4 - Take action, do deals and make it happen. You can't read your way to financial independence. It requires action on your part. I hope this helps.
He made me rethink of Section 8.... the right section 8 tenant can be your best asset. During the pandemic, normal tenants caused hell to landlords.... you never know what turn pretty to scheming tenant. The right condition can turn anyone
But section 8 has to approve rent increase. Which they will never let you bump it to market rent
@@tizben I thought the standard was market rent and they never let you go above.
@@Playaboy5 I acquired a property with section 8 tenants, market rents were going for $1,000, this tenants rent was $800. We asked section 8 for a rent increase, since there were two units out of this six unit property having $1,000 of rent. We asked for two years and they increased our rent for $17. Then the last two years there were no rent increases allowed due to the pandemic. So unless you get them in at a high rent, increasing that rent is a struggle. At least in Southern California
Hi @ Betty, @ Playaboy5 and @ tizben. I've been through four market cycles in my over 30 years real estate investing career. Believe me, when the market tanks, there's a lot to be said about having a reliable, stable and guaranteed rental income stream. It's very uncomfortable to have a great tenant who can't pay their rent because of .... (fill in the blank). With Section 8 a significant portion of your total rent is guaranteed as long as the tenant is renting your home. Also, I've found that my Section 8 tenants tend to stay much longer than market renters. This results with significantly lower turnover rates.
@@DrJoe-qk4bl Or you just go with high quality professional tenants like nurses, teachers, etc. We target health care professionals. We even have a resident doctor. They always pay and they keep the place clean. They wouldn't dare skipping out on rent or vandalizing the property b/c when you take them to court and get judgment, it'll tank their history
Section 8 allows for basement bedrooms? Did you have to lower the floor, raise the ceiling or even do basement window egress?
I have been a landlord for over 30 years. I am seriously considering my first Section 8 tenant.
I have been a landlady since 1972. Best decision I ever made was going with section 8.
question built in 1905 what if the basement floods or backs up, how do you prevent
Section 8 here in California LA covered areas has been a headache! One instance is they approve the rent amount and then you proceed with inspections and lease etc then they come backs after weeks of review and say “we can’t offer the original amount” would you take X? Wth? As a landlord, you’re out over two months of rent and getting nowhere with these people. They don’t respond in a timely manner they don’t return calls they simply ignore you.
I'm on section 8 here in New York City and I think I'd rather learn how to be a section 8 landlord and get a house or property yeah I might have to look into the housing authority
How do we know what the rents are from section 8 rentals?
Awsome Info! Is the closet within the 70'
Thank you
Love joe
Great episode, but little info on section 8. A rated tenants won’t be section 8….It’s unclear if he’s planning to rent to regular rated A tenants, or is he trying to find a A tenant within section 8?
The laugh gets me everytime!
Thanks Jake. I can't help it. Real estate investing - the right way - is so much fun!
Dr. Joe, could you share the lenders you use that does not require the seasoning period for the Refi stage of the BRRRR?
Hi R.R. I prefer to use small, local lenders rather than large, "big box" national lenders. Why? Because they understand your local market, decisions are made locally and you can establish relationships with key decision makers. I'm not sure where you are located, however, if your not in the Washington DC area, then I'm 100% sure my lenders would not lend to you (and vice-versa - i.e. they probably would not lend to me in the DC area). I suggest researching local lenders and start the process of nurturing relationships. I hope this helps. Feel free to engage with me on IG or on my weekly Wealth Wednesday livestream @ 7pm EST on IG.
Glad to see someone on here with some soul and humanity. Almost gave up on this channel. Much love. Will be doing similar work and hope to look in on what you mentioned at the end.
How is this possible with HUD income limits?
How do u grade the neighborhood?
I had a section 8 home in Florida, the tenants crashed my house, spent $10000 to fix it yet the government didn't allow me to increase the rent only once in 8 years. During renewal they came to check if everything is in working condition, God forbid the tenants can live with a broken cabinet handle which was broken by them, they made me repair every. I don't know another states, but Florida is not good for section 8.
Hi Mar J. I agree Section 8 can be frustrating at times. The bureaucracy can be very difficult at times. With this said, my experience is that the key to success with Section 8 is tenant screening (as is the case with market renters also). Most tenants have a history. Your job is to understand that history and make your selection decisions accordingly. As stated in the podcast, I ALWAYS go to the prospective tenant's home before I select them. Visiting their home today will let you know how your house will be in three months. A credit check, the job a person has or the clothes a person wears or even how much money a person makes has absolutely no relationship to how they will treat your home. If you want to know - then go to their house and see for yourself. I know this is very controversial, but its something I've found to be a very important part of my screening process. Check me out every Wednesday @ 7pm EST on my "Wealth Wednesday" on Instagram. I delve deeper into various real estate topics. I hope this helps.
How can you verify the old landlord is indeed the landlord and not a cousin or best friend. Tips appreciated.
Try for properties is bucks county pa where there are no rentals
That is a damn nice section 8
Thanks for the kind words Mike.
Love Rob as a Co-host
Rob (and David) did a great job on this episode. Kudos to Eric (the behind the scenes producer and video whiz) that incorporated the video and photographs into the TH-cam podcast version.
How long did this remodel and the other ones you do take Dr Joe because the rehab timeline affects when you can start renting the property? Your team knows what you want so I'm sure that helps your process.
Hi Tee: This rehab took me 3.5 months to complete from start to finish. I've been using the same contractor for the past eight years and this has been crucial to me keeping my sanity!! They look out for me and I look out for them. Without a good team, its very difficult if not almost impossible to successfully scale your BRRRR real estate business. There are too many moving parts to do it by yourself. The "lone wolf" approach doesn't work and will drive you crazy!! How do I know? Been there done that and have the grey hairs to prove it!!
Any way we can get ahold of his 8 page “application “
Great strategy!! May I ask what bank or which broker you did the refinance with? I'm in Rhode Island, the New England area and looking for a good commercial lender
Thanks for the kind words. I prefer using small, local banks and lenders rather than "big box" national banks. Local lenders tend to understand the local community and you can develop relationships with key decision makers. With the above in mind, unfortunately, my local lenders probably will not lend to you since you are not in their geographical area. Likewise, I'm sure small, local Rhode Island and New England lenders would not lend to me since I'm in the Washington DC market. Take the time to learn who the local lenders in your area are and try nurturing relationships with them. It's a slow process but it will be worth it. I hope that helps. Lets engage on Instagram or on my Wealth Wednesday livestream on Instagram.
Now I understand what Warren Buffett says about real estate, " all depends on the mood of the market".
usually another requirement for Basement bedrooms are gas meters can not be located within them
You are absolutely correct @ C Hodge. You cannot have a gas meter inside a bedroom - good catch. I also forgot to mention that basement egress windows cannot be more than 44 inches from the ground. This is to ensure that in the event of a fire or an emergency situation, the occupant doesn't have to stand on a ladder, chair or any other furniture to get out of the window.
How do I get a copy of your lease?
Is there a video on how to do due diligence on a small multi-family property? Thank you!
Hi Mario. I'm sure if you browse BP's website and TH-cam libraries you will find some good small multifamily due diligence videos. Good luck.
@@DrJoe-qk4bl Thank you!
Any connection for Dr joe
Suggestion: add episode number to title line caption Blessings, Jana, TX
Good suggestion All Me. I'll leave it the good folks at BP to respond further. Ask me further questions on Instagram @drjoeasamoah and visit my website joeasamoah.com to learn more!
Immediately clicked
Is BRRR same as heloc?
Question is the security deposit for section 8 tenants. They might not going to take care of your property if security deposit is not coming out of their own pocket.
Good question Melody. In the vast majority of cases, tenants are responsible for their security deposits. However, during Covid-19, several jurisdictions did pay security deposits - but this was the exception and not the norm.
It is my intention to be an amazing landlord. That will come from being a delight for my tenants to work with, and highly competent at turning a profit. Episodes with Dr Joe are very inspiring to that end! Our units are all maintained to this minimum standard, would I be willing to live here? There's still so much room for improvement.
My question in terms of Section 8 rentals would be this, how difficult or painful is it sometimes to deal with the government?
Hi Corey. Thanks for the kind words. Good question. Dealing with the government or any bureaucracy is certainly not easy. The absolute key to your success in this regard (and to your sanity) are relationships. The Section 8 program is administered at the local level by Public Housing Authorities (PHA's). If you want to scale within the Section 8 program, then I strongly suggest you take the time to develop and nurture relationships at your local PHA. Its not going to be easy, but its worth it. Lets engage further on Instagram or on my Wealth Wednesday livestream @7pm EST weekly.
It's actually not that bad just have smoke alarms and detectors and no chipping paint and light fixtures on the ceiling in every room and your good to go
Good repor is good ...but not takin their bs is another...gotta get them straight the 1st time they try you
If a section 8 tenants destroy a property who pays the owner or the state?
Honest question here because serving the Section 8 community is appealing to me. Can selectively appealing to Section 8 tenants be considered discrimination because other applicants may not have that opportunity?
Good questions @Eric. You cannot discriminate based on the various protected classes. Based on your state and municipality, this will vary. Amongst other things, I advertise on platforms where Section 8 tenants will be looking. This is not unusual. For example, if I'm looking for a military person/family I may advertise on the base. If I'm looking for students, then I may advertise on campus etc. This is called target marketing. However, you must implement your screening processes equally across the board. If not, then you will open yourself for major problems. I strongly recommend that you establish and implement a screening policy that you follow for everyone. I hope this helps. Let's engage on IG or on my weekly Wealth Wednesday IG livestream 7pm EST.
if so, then youd think one of the millions of greedy lawyers who do nothing but take money from the government for this kind of thing woulda found it by now
Why did they accept the lower offer?
Probably all cash, no contingencies, no inspection, close in a short time!
Thinking about the numbers and considering the 70% rule, I don’t understand how he was able to see this as a deal even before the increase in the ARV. With the PP at $555k, projected rehab at $175k, and projected ARV of $850k. 70% says the max all in should be $595k. Could someone explain the thought process here or a different way to look at this deal. I’m new, I’m open, and ready to learn.
And thank you for your time.
He's willing to leave money in the deal. That's pretty much it lol. Think about it this way, it appraised for 900 K so at 75% ARV (all in for 730K) refinanced, he just bought a brand new house for 55 K in Washington DC.
Hi Say Cheese. I think Kwame in his response pretty much hit the nail on the head. Washington DC like most appreciating markets (e.g. SF, LA, NYC, Boston etc.) is expensive. Its hard to get cash flow but history has clearly shown that you will get appreciation (we can debate this another time if you'd like). Ask ANY investor whose been around for 10, 20, 30 years who owns property in these markets and I can guarantee they will tell you this: I wish I started buying houses earlier and I wish I kept more. In these appreciating markets the REAL MONEY is not a few hundred bucks a month in monthly cashflow. Its buying and HOLDING the asset for many years. In appreciating markets, the key is to let time be your friend. Time can be very forgiving!! Ask me further questions on Instagram @drjoeasamoah and visit my website joeasamoah.com to learn more!
Other people owe me everything. I want someone who is working 2 jobs to support my life style. Free housing, free food, free education. I sleep until noon. On section 8 / welfare forever. I got 3 baby mamas to visit.
The only perk to these tenants is not having to evict since they don't want to loose their program, but renting to one lady who sublease to 5 other families plus dogs, this off sets any profits with all the damages, plus unknowingly contributing to these tenants making the neighborhood worst inside and outside with all the traffic going on, people in and out all day. God Bless them, may they find a better place.
Hi @ Lovelilpeep, I'm not sure who you are referring to in your scenario, it certainly not one of my tenants. As mentioned in the podcast episode, the key to your long term success as a BRRRR investor whether with Section 8 or market renters is your ability to screen well. If you don't master this, then I can assure you that at some point, you will become what is often referred to as a "burned out landlord." How do I know? Spend a day in any landlord/tenant court and you will understand what I'm talking about. Feel free to engage with me on IG or every Wednesday @ 7pm EST on my "Wealth Wednesday" Instagram livestream.
It would have been nice if Dr. Joe (or someone) had touched on the fact that he likely has to go through all of that work for the appraisal, because as a black property owner, his properties run a high risk of being undervalued by the appraiser, especially if they think he doesn't know any better.
Exactly. Im white and always do terrible renovations and my appraisals are still 100k over what im expecting. Not everything is based on race. 🙄
I wonder if this is a bit misrepresentative of the character of appraiser’s… I don’t think this man sees himself as a victim at all. My appraisal came in high because my Korean real estate agent pointed out all of our renovations. It had nothing to do with my lack of melanin but everything to do with a perfect real estate agent.
Hi @ Shanti, @ Tyle and @Katherine, I learned the hard way several years ago that crossing your fingers and hoping to have a "nice and fair" appraiser is not a sustainable business model when you are trying to recoup your money as part of a BRRRR or flip. As mentioned in the podcast, I strive to be proactive and provide supporting information about the house transformation and comps to increase the chances of getting the ARV I'm desiring. It's much better to be proactive than scurrying around after your appraisal comes in lower than you expected. Great question. Feel free to check out my Wealth Wednesday Instagram livestream @7pm EST each week where I delve into various real estate topics in more detail.
What’s his name on social media ?
I heard section 8 takes a few months to pay you the first months payment