Thoughts on Section 8 housing rentals...

[riverrunner1984]

As many of you know, I am selling my house and buying a new one.
I was talking with an agent who gave me this idea and wanted to get some other opinions:

Put 10% down on my new house, buy out my mortgage insurance so I wont pay PMI on the new house.

Take the remaining money I have left over, put it through a Corporation (I would need to start a corp) and buy a rental property with 25% down.
The property would qualify for Section 8 based on the area its in. I was told section 8 will give you first, last, and 3 months rent upfront.
After all said and done, I would be netting roughly $600 per month.

I have heard mixed feelings about section 8 tenants so I am wondering if anyone else had any experience with this.

Any and all info/advise would be great!

[Paul65K]

I've owned numerous Section 8 housing properties.....All of them ended badly..........you have my number and I'd be happy to discuss it with you Brian.....Gimme a call

[ChumpChange]

At least a portion of the rent will be on time every month.

Sometimes you get a good person but even that diamond in the rough will always revert back to coal at somepoint. Don't do it with a good house.

[gn7]

It is/was a tax haven for the rich. Like you said, you need to incorporated to make it work at all.
Magic Johnson was/is? one of the largest section 8 housing landlords in Los Angeles. You MUST have a property management company handle shit for you, or you will be married to property full time. My sister worked for the property management company that handled Magic's stuff. Section 8 renters know "renter's rights" forwards and backwards and you need someone that knows them just as well on your side or you'll get eatin'

[riverrunner1984]

I've owned numerous Section 8 housing properties.....All of them ended badly..........you have my number and I'd be happy to discuss it with you Brian.....Gimme a call

Thanks Paul, I will give you a call this weekend.

[riverrunner1984]

To be more specific, this would be a townhome/condo in the North Long Beach/Paramount area. Not the best of areas but def a high demand for rent.

You brought up a very good point about a mgmt company GN7. Since I would only have 1 property I figured I could manage it myself but that is something I am going to look into now. Thanks!

[nowski]

Is there a way to find out if a specific property is a section 8 rental?

I have a neighbor (renter) who has turned that rental place into a used car lot. I use to see the landlord / owner on a monthly basis to collect the rent but since this new renter has been renting the landlord is nowhere to be found. If this place is a section 8 rental I'd like to give the housing authority a piece of my mind...

[niceguyeddie]

I went through this twice and it's a pain in the ass. Like Matt said, you'll get a portion on time, but it's highly unlikely that you will get the other portion on time or at all. When I would drive out to my rental to pick up rent, the tenants would cry poor mouth, yet they had new spinning rims on their car or Air Jordans on their kid's feet. They make promises to pay you payments and even that rarely works out.

By the way, I HATE Long Beach. Not the city in general, I just won't ever buy anything there again unless it's in a pimp area. I had nothing but head aches and lost money on a property there that I recently sold. If at all possible, stay the hell out of the inner cities. Invest in areas where you will not have head aches or where the police will respond to a squatters call in less than two hours. There are some pretty good rental deals in the IE where you live, look there. make sure you are working with a RE agent that actually knows what they're doing when it comes to buying/selling rental properties. Most RE agents are full of shit and pretend to know what they're doing.

Oh and don't worry about netting money, let the rent pay the mortgage down(get out of debt)! You also need to save some of that money for vacancies, repairs and etc. Keep it in your corp.

[2manymustangs]

It is/was a tax haven for the rich. Like you said, you need to incorporated to make it work at all.
Magic Johnson was/is? one of the largest section 8 housing landlords in Los Angeles. You MUST have a property management company handle shit for you, or you will be married to property full time. My sister worked for the property management company that handled Magic's stuff. Section 8 renters know "renter's rights" forwards and backwards and you need someone that knows them just as well on your side or you'll get eatin'

I have known a few slum lords while I was practicing R.E. (my broker was one) and now my wife works part time for a property mgmt company that owns/manages many of their own places...

The stories are enuff to make you

[C-2]

Is there any reason he is suggesting a corporation? Can you get financing for a corporation without giving up a PG (personal guarantee)?