Unlock the secrets to creating a resilient income stream with Section 8 real estate investments in our latest episode. We're peeling back the layers on how landlords can capitalize on stable, government-backed rent payments, and why a never-ending demand for affordable housing means fewer vacancies and more money in your pocket. Our conversation with Marcus, a seasoned investor with a wealth of experience, brings to light the invaluable benefits of Section 8 vouchers, the ins and outs of property grading, and how these factors combine to forge a solid path to wealth building.
Prepare to shift your mindset as we stress the importance of staying flexible and open to learning in the dynamic world of real estate. By weaving together different perspectives—including Marcus hard-earned insights—we illuminate a spectrum of strategies to stay at the forefront of the industry. Whether you're adding to your portfolio or just breaking ground, we provide the knowledge and foresight to thrive in real estate investment. So, join us as we tackle the intricacies of Section 8 housing and chart a course for success in the upcoming year.
Podcast Intro
Unlock the secrets to creating a resilient income stream with Section 8 real estate investments in our latest episode. We're peeling back the layers on how landlords can capitalize on stable, government-backed rent payments, and why a never-ending demand for affordable housing means fewer vacancies and more money in your pocket. Our conversation with Marcus, a seasoned investor with a wealth of experience, brings to light the invaluable benefits of Section 8 vouchers, the ins and outs of property grading, and how these factors combine to forge a solid path to wealth building.
Prepare to shift your mindset as we stress the importance of staying flexible and open to learning in the dynamic world of real estate. By weaving together different perspectives—including Marcus hard-earned insights—we illuminate a spectrum of strategies to stay at the forefront of the industry. Whether you're adding to your portfolio or just breaking ground, we provide the knowledge and foresight to thrive in real estate investment. So, join us as we tackle the intricacies of Section 8 housing and chart a course for success in the upcoming year.
Podcast Intro
Welcome to the Professionals Real Estate Investing Podcast.
Speaker 2:My God, marcus how you doing, bro? What's happening to the professionals in the house?
Speaker 1:Oh, yes, indeed yeah. With this one we're going to be talking about Section 8, the unlocking wealth, the power of Section 8 investments. We did this last week, but we had some trouble with the visual. Yeah, we didn't have the banner up and didn't mess everything up, and I was going to do it, put it on the podcast platforms, but I was like, no, how about we just do this again?
Speaker 2:Yeah, we're just doing it over again, let y'all know what it is.
Speaker 1:Yes, so here are the top 10 reasons not to know, for a case of particular order, why it can be good to invest in Section 8. I mean, we've talked about this for a while. The number one, what we think is definitely our number one, and everybody can be HUD game, because if you're going to do, it.
Speaker 2:you got to be able to set it up right so you can have stable income, meaning tenants that's going to be in place that are going to be long-term that way you can be able to enjoy the benefit of the stable income that comes along with section eight and hood.
Speaker 1:Yeah, you can't beat that, that stable, stable income like. And you gotta think section eight that does with you know the government and you know government ain't going, you know there ain't going to be a bouncing those checks, especially for no section eight.
Speaker 2:Nah, nah that's like steady money right there. You want to be able to get those tenants. That's going to give you that stable income, because that's very important.
Speaker 1:Yeah, and what Section 8 is? Here's a big description. Section 8 provides a steady and reliable source of income for landlords, as the government directly pays a portion of the rent on behalf of the eligible tenants. So what happens is if a person wants to get on section 8, they'll get a voucher and it goes by. You know how big their family is kids, family size, income, yeah, all the above and then it goes from there and then they get a voucher and then they'll try to find a place of residence where they can be in that umbrella of that price range. And then that's how they'll go about getting Section 8.
Speaker 2:Right right. As long as they meet the income requirement and then pertaining to whatever family size you have. There's like rules to it. So they have income limits and then according to family size that there's like rules to it, so they have income, income limits and then, according to family size that's how they, I guess you know gauge how much rent you're going to pay and then how much the landlord gets. You know? Yeah, exactly.
Speaker 1:So yeah, number two, guaranteed payments. Like I was talking right there, skip skip the gun on that one. But yeah, guaranteed payments. Landlords can rely on timely payments from the government, reducing the risk of rental income, the fluctuations of nonpayment issues.
Speaker 2:Yeah, that goes along with the stable income. The number one the guaranteed payments. But you know, the payments that are going to come from the township or the county that you're in are guaranteed. Those checks, like you said, aren't going to bounce. It's just a perfect setup when you can just be able to rely on those guaranteed payments that are coming. Most of your rental income is going to come from that.
Speaker 1:Yeah, exactly. So number three, three high demand. I was actually looking at, uh, when I was, me and rocky were talking, this morning, I seen an email come up and it actually was like, uh, they actually had a. Uh, I get a lot of stuff emails, wise when it talks about investing and everything, and there was one of a 10 flex apartment and it was Section 8. The whole thing, section 8. I was like, if somebody gets on that, yeah, the thing about it is too, especially when it comes to Section 8, I was going to say when it comes to rental and especially when commercial. I was thinking this off the top of my head and you know this too the commercial side because it's got to be five and more is commercial. But the part about it too is there's a grade. There's an A, b, c, d and F when it comes to the commercial real estate also. That was the thing off the top of my head about that. If you want to invest, see what grade that investment is going to be.
Speaker 2:Yeah, yeah, commercial residential apartment buildings. They have that grade A, b, c, d. So you want to, I guess, stay away from the C's and the D's, they say. But you're going to find, most of the time, section 8 and HUD, though that income is gonna be in the cd category. Um, you know it's gonna be those type of buildings, yeah, more likely, um, not maybe all the time, but more likely it's going to be those cd grade uh, units and apartment buildings.
Speaker 1:Yeah, so with the the high demand also too, as it was right here and that you know. The third part is the Section 8 properties cater to this demand, ensuring a low vacancy rate.
Speaker 2:Yeah, yeah, yeah, there's always high demand for affordable housing. If you can qualify, um, if you can qualify, and if the landlord or the the owner, the owner wants to participate, then you can, it's a perfect situation because, um, if that, if you're going to get in the section a program and have that voucher and then say you're already in a place but your landlord don't want to participate and you're going gonna have to go find some somewhere else, that's, you know, gonna be better for you to use that voucher so you can participate with the section 8. So it is in high. It is in high demand though.
Speaker 1:Yeah, so there's a long list going on for, like section 8 yeah, and I mean that's and as a, that helps out with the section 8 too. It helps out with affordable housing, which is a main crisis, is a main crisis here in the United States when it comes to housing Right, exactly, exactly. It plays a big part in the whole housing spectrum of that program. Section 8, program Number four government support. Well, definitely, you're going to get government support, because, why? Because the vouchers and everything with Section 8.
Speaker 2:Yeah, exactly, exactly the government's involvement makes it just so much more better that you can be secure that you're going to get your stable income, your guaranteed payments, and then that the it just helps out both parties. You know what I mean. It just helps out both sides. You know what I mean, just helps out both sides. The tenant gets reduced rate of rent and then the landlord gets his guaranteed payment of rent and, from what I hear, usually the section 8 rent is a higher than usually, higher than the fair market value of rents that are listed. Oh wow, they go by, I guess a couple dollars more than just a few dollars more. So I guess if rent is like $1,500 somewhere, you might be able, with Section 8, as a landlord, get it at $1,800 or something or $1,700,.
Speaker 1:A little bit more, yeah, you know, however, that works. I was reading this too. It says the program is designed to assist low-income individuals and families in contributing to social welfare. And with me and you talked about this before always Section 8, it gets a bad rap Because, you know, because of low-income families. And Is that stigma?
Speaker 2:Definitely a stigma.
Speaker 1:Definitely a stigma. I've seen people who had Section 8 and live in beautiful homes, oh yeah. Yeah, so throw that window about. You know, if a person's on Section 8, that they, that they're just, you know, crumbs scum Like that's not, that's not what it's about. It's actually helping people that you know and then you take care. You take care of that section, that property that you live in. Yeah, landlords take care of you. It's a perfect marriage. Yeah, it's a perfect marriage between both of y'all of you.
Speaker 2:It's a perfect marriage. It's a perfect marriage between both of y'all and you got to just make sure you just stay abiding by their rules the Section 8 rules, the program rules, the HUD. Whatever you got to make sure you abide by those rules, because if you don't go by the rules then you're hurting yourself.
Speaker 1:Yeah, they are pretty strict when it comes to what rules that govern with everything, when a person gets a voucher and they get a house for residence. Yeah, because it's a government program, so they want you to go by their rules. Yeah, and number five long term agreements yes. So they don't want you to move out. They want you to stay there and be a residency for as long as possible yep as long as you can, uh, um, stay on it. Stay on the program and be able to, uh, meet the qualifications.
Speaker 2:It can turn into a long-term term deal where where for years, you can be paying a reduced amount of rent and, um um, it's not hurting you. You know it's not hurting your, your lifestyle and your income. You qualify for it, you have family size for it and it's just a you know help stimulate the economy. At the same time, like they, eventually you're going to want to get to that next level of getting off of it. You know, once you're doing a little bit better income-wise, you're going to want to get off of that program, because it's really just a program like a stepping stone for everything.
Speaker 1:It's a stepping stone into a possible home ownership or something like that. That's what I was going to say. It's a stepping stone. You have to start somewhere, but then you progressively move up. You just don't want to stay stuck where you have to start somewhere, but then you progressively move up. You just don't want to stay stuck and just stuck where. You don't want to stay stuck all the time. You want to move, you want to advance, you want to get better in life.
Speaker 2:Yeah exactly, Exactly so you know take advantage of it.
Speaker 2:While you can be able to save your money, help with other bills. You know rent is such a big bill for everybody every month. So if you can reduce that rent and be able to utilize Section 8, leverage off of it, capitalize off it, where you can save your money for a down payment on a home or be able to get out of your situation to where your income's a little bit better and you won't need Section 8 no more, you know, because you can, you know, actually pay all your rent and everything. So but yeah, it's definitely just long-term agreements helps both sides.
Speaker 1:You know the landlord and the tenant. So Number six regular inspections. Definitely. This is really good too, because that's where you ensure that you meet specific guidelines of living there and it can help you better maintain the properties that you live in. I think that's really good. You want to know if it's a person's property. You want to go in and make sure everything is right. You don't want any surprise attacks. You got holes in your walls. Hold on a second. I used to have a wall here. Why is there no wall there?
Speaker 2:Yeah, where did this big, huge crack come from? Is there something going on with my foundation, or?
Speaker 1:something. Yeah, you don't want to. Yeah, that element of surprise, oh man, it could be a serious headache.
Speaker 2:Yeah, that element of surprise, oh man it could be a serious headache, right right. So regular inspections definitely is key to the Section 8 program because they will come and have to. You have to. What do you call it? Oh, get recertified.
Speaker 1:Recertified. Yeah.
Speaker 2:Every year, or whatever the case, they have to come look at it. They have to make sure that the property is not deteriorating or certain functions know certain functions need to be working outlets, and just you know they have a whole list of stuff that needs to be up to par, up to code with them.
Speaker 1:So you can be able to continually use the program and be a part of the Section 8 program. And I'm glad you mentioned that, because even on the tenant side, like if something's broke down, they want to make it aware to the landlord that, hey, oh, a light socket Right, Some that anything that is needed in the way of life In the house light sockets.
Speaker 2:If it's not your appliances.
Speaker 1:it's their appliances and something's not working right or it's broken down. You want to make them aware of what's going on Exactly, not to the point of okay, it's time for an inspection. Oh yeah, by the way, I just want to let you know the oven has been working for the past three months and I know inspections tomorrow. Yeah, last minute hiccups.
Speaker 2:Last minute hiccups. I've seen it before, all the way down to the door frames and stuff. I want to make sure door frames and door jams look good and everything, like you just said outlets, electrical things, hazardous things, nothing hazardous in the house that can potentially be of harm.
Speaker 1:You're not trying to have that Section 8 property go up like the 4th of July, right?
Speaker 2:Exactly, exactly. So regular inspections is going to be a must if you're going to be in the Section 8 program, because they're going to come check it for you to be recertified.
Speaker 1:I believe it's a yearly cycle. It's a yearly cycle. They want to know to make sure everything is all good. It's not to invade privacy. It's the landlord's property. It's what they invest in. They're hard to own money at. It's going in, it's part they invest in. I mean, they're hard on money and you know it's going in and it's part of the rules.
Speaker 2:It's part of the Section 8 rules they have. You have to go If you're going to be in this program. You have to go down that checklist to make sure everything's good on the inspection.
Speaker 1:So, yes, All right. So number seven a wider tenant pool. All right, so number seven a wider tenant pool. So it says, by accepting section eight tenants landlords open themselves up to a broader pool of potential renters, increasing the chances of finding responsible tenants. That's what you really want to have. You want to have responsible tenants. You may have responsible tenants and a responsible landlord Right.
Speaker 2:You're going to stay in there for a while a while yeah, yeah, because uh, if everything's working the way it should be working, uh, between on both sides, landlord and tenant side, then you know it shouldn't, it shouldn't be. Uh, it shouldn't be hard to to keep a tenant there, you know, but the pool, like the, the pool of tenants for section 8 is so wide, even if someone decides that they want to leave or whatever, you can always get another section 8 tenant. Yeah, yeah, because there's plenty of them. There's a waitlist, so yeah, always.
Speaker 2:Yeah, there's always a waitlist yeah, oh well, in this area and I know other areas too, but especially in this area well, there's a long, two, three years maybe, sometimes, depending on the area or the city or the county, whatever there's yeah, cause affordable housing is needed. Yeah, like like no other. Yeah, so there's going to be, there's going to be wait lists, that's for sure.
Speaker 1:Number eight consistent market demand. That's it. The demand of market affordable housing remains relatively consistent, or constant, I should say, making sectioning properties present in various economic conditions. So it's going to stay at a consistent demand all the time. It's going to stay a consistent demand all the time.
Speaker 2:Oh yeah, there will always be people that will qualify for the program if they choose to sign up for it. Yes, because half the battle is people that do qualify for it don't really apply for it and then, when they do get it, sometimes, sometimes they don't, they can't recertify, they can't keep going, you know something happens, you don't, you're not keeping up with the program. So it's like man, consistent market demand. The demand for affordable housing remains relatively constant. Yeah, there's always someone looking for affordable housing because that pool of people is, it's big, you know. Yes, there's, there's, there's more poor people than there is rich people.
Speaker 1:Oh yeah, no doubt so no doubt yeah, that's, that's always going to be it's always consistent market demand for perception and I'm glad you said that. I didn't want to throw it off topic. They said the rate everything is going with our economy, with everything that we're doing. It's going to break it down to two classifications Either you're wealthy or you're poor. That's what it's going to come down to.
Speaker 2:You're either going to be rich and have a little bit of money or you're going to be trying to get to the rich side. You know Exactly, yeah, so you're going to be with the lower income folks, depending on what that income is. You know, take advantage of the program because there is a demand for it and you might have to wait on a list. But you know, as a landlord you don't have to worry because there's always a demand. And then as the tenant, you don't have to maybe really worry about the program going away because it's always constantly being utilized.
Speaker 1:I never see it going away. Right Number nine I'm thinking about PG&E on this when I read this. This is the local housing authority assistance. Local housing authority can provide support to landlords participating in the program, offering resources and guidance. The reason why I said the pg needs because you know they have those programs where they come to the house and say, like door jams, weather stripping, yeah, they have. Uh, I forgot what the program is called, but to this day it's been around for some teen years.
Speaker 2:It's called SHIP or something like that. It's like the acronym SHPPP or something like that.
Speaker 1:Something like that yeah, for this area, yeah, ship. And then they help out with weather stripping and they even help out with appliances too. If people's appliances break down, why is there a program? And then they go about getting them a range or a refrigerator, whatever is needed for the house Energy efficient too, kind of.
Speaker 2:They kind of look for energy efficient stuff to make because that's the whole point of the program, right? Yes, To make the home as energy efficient as possible with the weather stripping on doors, windows, making sure windows are all tight and everything.
Speaker 1:Yeah, I do know this because I worked around appliance so many years that people in the program like shift program, like they'll order a refrigerator, right, and it's just a regular apartment refrigerator about 18, 17, 18 cubic refrigerator and they'll be like, well, um, I need an ice maker. Well, having an ice maker is a luxury, right? So you're gonna have to pay that out of your own pocket, right? Your landlord's not gonna be paying that, they just paying to make sure your food is frozen or refrigerated so they get in their refrigerator.
Speaker 2:It just depends on the unit and the building. If it's in a nicer area and a nicer building, you're going to get those nicer amenities. You'll get that ice maker or that extra little amenity. If you're in an area that's just, you know, lower, lower income, you're going to get the basics. You're going to get regular fridge, regular stove, just the regular, you know, regular basic appliances yeah, you are.
Speaker 1:So number 10,. Last but not least, potential for higher rent yeah, so, yeah, so Section 8 rent rates may be higher than market sales, like he was talking about earlier.
Speaker 2:Yeah.
Speaker 1:Allowing landlords to earn competitive income while participating in a socially responsible program. Yeah, it's definitely a program that is like you're saying there's rules and regulations that people need to follow by saying it, because I mean, it's a program to help. Yeah, yeah, it's supposed to help you get to that next step, like I said, and either you're still going to rent or help you get into a situation where you can become a homeowner Because you know essentially you want to.
Speaker 2:If you're going to take advantage and leverage this section eight program, you're going to want to save money when you're working and making your income.
Speaker 1:You're going to want to save money when you're working and making your income. You're going to want to save money for that down payment.
Speaker 2:The thing about rent is that's a really really expensive bill every month. If you can save on that and be able to tuck money away for a down payment for a home, that's really what it's for. That's the benefit of being able to leverage this program. You know, because you only make so much, you want to be able to take the, you know, to take advantage of it by saving as much money as you can while still being able to qualify for the program and um, you know, hopefully be a homeowner one day.
Speaker 1:Yeah I remember, like I said, I've been around people who've had section eight. I never looked at them wrong, but I will say this some of them how much they paid for sanction eight yeah, insane, yeah, some people I knew they paid under $100 a month.
Speaker 2:Man, there's single mothers out there that pay $0. Because of just how it's set up, they were able to get 100%. Section 8 was able to pay 100%, 100% government financing. They funded the whole thing. It's just crazy. Some people just pay like maybe a hundred bucks, maybe 50 bucks. It just really depends on your situation, family size, income and all the rest of the things they ask you, you know, but basically it's really just family size and income. I think, when it comes down to it, an income.
Speaker 1:I think when it comes down to it.
Speaker 2:They have a little chart that they go by, based on where you're at the area you're in, according to their numbers. They adjust it appropriately. I should say.
Speaker 1:Last but not least on this, is this why there are benefits to investing in real estate in Section 8?, housing it's essential for landlords to be aware of program requirements, regulations and potential challenges associated with the government-subsidized housing, conduct thorough research and consider consulting with real estate professionals or legal advisors before making investment decisions. And then that's what me and Rocky were talking about when we were doing about the taxes. Like you want to, you want, if you want legal advice, tax advice, you know, go to a lawyer, go to a tax professional. You want to go people who are certified in this, in this area, in this niche, where it's what they do.
Speaker 2:Yeah, most definitely that they actually specialize in? Yes, um, there's uh like agents out there that specialize in just uh, what's that like 203k rehab loans? Oh, yes, stuff like that. There's people that's just specialized in foreclosures, pre-foreclosures. There's brokers and agents. You know that certain area is where they really excel in and they know the rules of the game of that game, that particular area of real estate. So you definitely want to get down to. You don't want to just be talking to any real estate agent or broker With Section 8, you basically I wouldn't say talk to maybe a real estate agent or broker with section eight.
Speaker 2:Uh, you basically I wouldn't say talk to maybe a real estate agent or broker about section eight, because that's more of a rental thing. But you want to talk to someone that specializes in um, being, you know, getting into section eight, like they know how, how you can apply and they'll help you with the paperwork, and then they tell you all the rules and stuff because they're familiar with it, they know how it works. You want to find someone who's a Section 8, specialist.
Speaker 1:Yeah, and it's certainly even in your area. I want to say also to your housing authority your housing authority would have definitely the guidelines especially for that area. Your housing authority would have definitely the guidelines especially for that area.
Speaker 2:Yeah, talk to somebody that's in there and go get all the information at your local housing authority, because talking to an agent or a broker about section eight ain't going to get you anywhere. No, it's nowhere, you know, because that's a whole different. We talk about homeownership versus rentals. So, yeah, rentals. So you might want to just go to your local housing authority, get all the info on the program and talk to somebody that's in there. That'll maybe fast track you into either being on the landlord side of the Section 8 program if you've got properties, or if you're a tenant and you're looking for a Section 8 rental or want to be in the program.
Speaker 1:Oh yeah, yep. So that's it. Top 10 reasons. You know that unlocking wealth and the power of Section 8 investments. We did 10 points on why it's good to invest in Section 8. And rather than that, yo anything on your mind, no not really.
Speaker 2:I think this is just a good topic. This is real estate investing. It's talking about Section 8. Landlords, any tenants to be on Section 8, and maybe it's something you might want to look into because it's guaranteed income, it's steady income and if you screen the right tenants and put the right tenants in place, it could be a beautiful situation with the cash flow. Yes, so you know. All I really have to say is just, if you want to get into it, just really, um, look at the program for what it's worth. Don't judge, don't put a stigma on it. You know, just. You know, treat it just like everything else. You want to find a good quality tenant, so, and then you also, as a tenant, want to find a good property owner or landlord that's going to support the program.
Speaker 1:Yeah, on that note, I just want to let everyone know if you want to get a hold of me soon, I'm in this podcast. I'll have the 1-800 number directly to the podcast if you want to be a guest on it. We're going to be branching out this year.
Speaker 2:Oh yeah, plenty more episodes to come, plenty more things to talk about in real estate investing.
Speaker 1:I'm looking forward to just keep on going this year, man, oh yeah, no doubt I'm going full throttle on everything. I'll have the time I've changed my lifestyle a little bit where I'm. I'll have the time I've changed my lifestyle a little bit where I'm going to have more time to do this, more to talk to more people. I have a listening ear. I don't know everything, I'm just trying to be a better person, better than yesterday. Man, I'm winging this thing really.
Speaker 2:I'm just learning as I go, you know, still learning real estate every day. Some things I guess that I say on here may not, I guess, make sense sometimes, but I try to make it make sense because I'm still learning and still kind of like a beginner. But you know, I'm getting it to go.
Speaker 1:You're doing great. Remember, you got me into the real estate game. I knew about real estate in some ways or another, but those are crumbs. You sent me the whole platter of how things are done and I'm still learning. That's the best thing about real estate. That's the thing about podcasts. That's the thing about YouTube. You can always talk to people. There's someone, someone's going to know more than you. Always have a listening ear, because you don't want to be that one where you know what. I know everything. No, you don't. There's people who. There's people who've been doing this before.
Speaker 2:Yeah, exactly, don't think you know everything. Always be willing to have an open mind to be able to learn more, because, uh, you know, nobody knows everything.
Speaker 1:no, that's why I I ask I I'll text you or call you. I'll ask for your advice, or I'll ask I'll talk to rocky. I'll ask you know what? I don't I? How do you? How do you? How do you view it this way? Would you look at this? Because my perception and your perception would be two different ways, but I have somebody looking at a different direction than me. It turns my light vision to a different perception. I'm like hold on, that does make sense, yeah.
Speaker 2:Yeah, exactly.
Speaker 1:Exactly, but yeah, but rather than that, the next podcast. I'm going to have every all the links ready for y'all. If you want to be on the podcast, if you're listening on the podcast, go to at the professionalist 23 on YouTube. That's, that's the channel, that's where we're going to have everything on and, yeah, we will keep pushing 2024. Yeah, we're going strong at this. So, rather than that, well, we are done and peace out of here, let's go.