A Landlords Guide to Section 8 Housing

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all right guys it's been a while since

I've made a video for you and today

because it's been so long I think I'm

gonna break down section 8 for you like

said Manas I don't know it's been a year

or two since I've posted anything but I

am back and I'm ready to start posting

every day or two to give you guys lots

more insight into the world of real

estate investing especially investing in

lower income areas or areas where you

can find great deals like for instance

my first property that I paid ninety

five hundred dollars for rehab myself

and you know was all-in with fifteen

thousand dollars when all was said and

done that house still rents for between

650 and 700 dollars a month to this day

and I just want to help more people be

able to do this this is like a long-term

retirement strategy it's something that

you can start doing when you're making

very very little money because again

we're talking about a very small

investment upfront so today again what I

want to talk about is the process of

getting set up with section 8 and why I

use section 8 whenever I can so little

background today I had to deliver an

eviction notice

and this is the third time that I've had

to evict somebody within the past year

and you want to know what all three of

those situations had in common other

than the eviction of course and that was

none of them were on section 8 with

section 8 there's a little bit of work

that goes into setting it up but you get

paid every month and you know typically

they don't usually pay at all there's

usually a hundred or two hundred dollars

that the tenant is responsible for

depending on their situation there may

be times where they go without work and

section eight will pay for the entire

amount I've had you know stretches of as

much as a year at a time where section

eight would pay for the entire rent but

for the most part they're gonna pay

about you know eighty percent of it

you know sometimes more sometimes a

little less it just depends again on

this situation and I've never had to

evict a section 8 tenant except for when

they you know screwed up and got kicked

off the program and you know then you

know they were responsible for the full

amount and you know the longest I've had

anyone hold on to after that was maybe a

year and a half before I had to evict

them so it does happen but for the most

part it happens after they get kicked

off of section 8 section 8

so let's talk about the steps for a

minute and then we'll go a little

further into you know some great things

about section a so with section 8 the

first thing that's gonna happen

obviously you're gonna post an ad you're

gonna put some signs in front of your

yard you're gonna want to let people

know that you accept HUD or accept

section 8 and that will usually get you

a lot of people calling in now the other

thing that I do is I charge more and I

go ahead and put that in that it's not

like it's $900 a month if your section 8

or 750 a month if you're not section 8 I

just put it up for $900 a month or

whatever the amount is that I'm renting

it for and that typically weeds out all

the people that are not section 8 I'm

pretty sure it's illegal any way to

charge two different rates one for cash

one for section eight so I'm not going

after cash renters anyway so I'll post

that ad start showing it usually I'm

just flooded with people that want to

look at the house very quickly and the

next thing that's gonna happen is you

know if you choose a tenant sometimes

I've been asked for some odd reason to

sign a lease before any of this was done

but normally you don't do that normally

you're going to have them fill out a

what does it call their request for

tenancy form and there's gonna be

portions that they fill out and there's

going to be portions that you fill out

you're going to take that down to your

local section 8 office and you're going

to also have them sign a lead-based

paint disclosure basically saying you

if there's a you know lead-based paint

in the house or not this is only for

houses that were built I think prior to

1980 1970 something I don't remember

exactly but just have them sign

something saying that they you know

they've read a lead-based paint brochure

and that you've made them aware you

don't know if there's a LED base paint

in the house or not you'll take those

two things or you'll have the tenant

take those two things to the section 8

office the closest one in the area that

handles the house that you are currently

renting out and the next thing that's

going to happen is they are going to set

up and inspection now they can take a

long time to do this if you don't bug

them a little bit but you have to be

really careful how you do bug them

because if you piss them off then

they're gonna find every single possible

thing that they could find wrong with

your house and and you're gonna have a

real hard time so I'm always super nice

super easy to look easy to get along

with but not over-the-top I'm not going

to bring Donuts to the inspection and

what's gonna happen is I typically like

to be there I like to have my tools with

me and if there is something I like to

try and fix it when they bring it up and

looks like my battery's dying let me go

ahead and plug up real quick before all

right we're all plugged up so I've done

you know one of the things that I've

done in the past other than just trying

to be present and trying to get that

inspection knocked out right away and

you know tried to fix things during or

right after the inspection tried to get

the inspector to come back within a

couple hours if it was an easy fix the

other thing that I have done that I

would not necessarily recommend but it

has worked well for me in the past I'll

actually sometimes move the tenant in

before the inspection this can obviously

backfire because one well they're not

going to retroactively Lee pay you for

any time that the tenant was in the

house before the inspection passed but

in my experience they try to get in get

out a lot faster when the tenant is

present already so that is something

that you will want to consider but you

know you're taking a risk is the bottom

line I mean they could they could say

you know you're gonna have to do $15,000

worth of work before we approve this

house and you might not want to do that

the whole point was to get into a house

for between ten and twenty thousand

dollars not you know twenty to thirty

five thousand dollars so do that with

that whatever you will but again just to

recap so far we've got the request for

tenancy approval the lead-based paint

disclosure take that to the office then

there's a inspection after you pass your

inspection you were going to have to

sign what is called a HAP contract

you'll go into the office you'll fill it

all out or or you can get a copy and

send it to them whatever that might be

you'll go ahead and sign a lease and

then you're gonna either way you're

gonna have to go into the office

eventually because you're going to have

to bring in a copy of your ID copy of

warranty deed there's you might have a

couple other deeds that you can turn

into them I don't think they accept a

quitclaim claim deed but you know you'll

bring it a copy of your deed copy of

your ID what else a copy of the signed

lease and you're gonna need a w9 and

you'll sign you can probably sign the

half contractor then actually you know

they'll probably want to review your

lease so they might even ask for the

lease before you sign the HAP contract

and the other thing is you know they

might tell you that you're charging too

much that's okay I typically start out

you know asking for more than I think

I'm going to get and if they knock it

down a little bit then they're not going

for instance my second house I think it

was you know I wanted to find out how

much I could get for the house so I

started out I think I might have asked

for like a thousand dollars in an area

that the median rent was about 750

didn't nobody really signed up for that

so I dropped it down to 950 got someone

to work with me and I think they signed

at least 4 900 a month so then we went

through the whole process with section 8

and section 8 came back said everything

looks good you know the inspections past

we can only give you eight hundred and

fifty four dollars a month for this

property well that's fine the median

rent 750 in the area I'm good with that

and you know that's one of the things

about working with section 8 people

always talk about how oh they tore up my

house they did this they did that well

one you know you shouldn't be installing

granite countertops and your rental

properties anyway especially if you're

in the areas that I'm investing in but 2

if they do mess a few things up well

you're charging a premium so you'll be

able to get it fixed and you're also

getting paid steadily every single month

so that's kind of just a brief rundown

of getting set up with section 8 let me

just demonstrate real quick for you

another you know I'm just going to show

you because this is what I do in all my

videos show you a property this one is

in Jackson right now it's for Sale By

Owner 16,000 you could probably knock

him down to you know thirteen fourteen

thousand you know if you're lucky let's

just take a quick look at what we're

working with you know fairly decent

house got a nice play area in the back I

like the fact that they have a nice you

know system for protecting the AC I

would probably beef it up even a little

bit more but you know all in all a nice

system for protecting the outdoor unit

and interior we have some paneled walls

not very easy to punch a hole through

these so and also you never have to

worry about painting them every time you

move someone in or out you just clean

them really well and you know you're

gonna have the paint I don't know what

you'd have to do with these floors you

might get away with you know cleaning

them really well you might have to sand

them down you know but either way it

doesn't look like there's a lot to be

done to this house other than some

cosmetic things obviously you would have

to look at it in person to see who knows

if there's any kind of plumbing or

wiring but typically in this particular

area unless there's some major

foundation issues you might have

yourself a good house on your hand on

your hands so and then as far as you

know the median rent you know I pulled

it up I'm not gonna do the whole process

like I do in a lot of my other videos

but you can see the median rent $738

obviously they have some lower ones this

one or higher ones this one's 850 and

you got some you know lower ones 675 so

but in this area this is a nice radius

it's only 0.75 miles so there's a lot of

listings in this area they can kind of

pool together and get a nice average of

what you can expect now that is you know

that's cash that's if someone's paying

cash for the most part I pulled up rent

range you can see that the you know on

the low end we're talking 600 median 750

and then high in 900 but look way up

here for section 8 $1,100 now that's

going to include utilities typically it

seems like it's about $100 worth so you

know section 8 might pay as much as

$1,000 a month for this property that's

$250 more than the median rent according

to rent range

and that is why I love working with

section 8 guys so I've got something

pretty special for you I'm gonna put a

link in the description below and

anybody that wants this I'm going to

give you access to an extremely rare

video this is a video that I made before

I bought my first house when I was

making plans with my wife and we were

dreaming together and we went and we

looked at this house and we were coming

up with our plan for real estate

investing you can see a lot of the

mistakes that I made when I was trying

to figure out how much everything was

going to cost and what I was going to

need to replace and you can see a before

and after of you know you know what it

was like during the process of fixing it

up or before we fixed up and what it was

like afterwards and just some extra

insights I'm hoping that it will be very

motivational for you so I'm gonna put

the link to that video in the

description below this video is not

going to be available to the general

public it is only for the people that

watch this video or maybe another video

where I've linked to the description or

a link to it in the description so it's

only gonna be for you guys that do that

and until next time I think next the

next thing I might talk about is how I

build capital to purchase these

properties we'll see so I will see you

guys here really shortly