The HUD department here in my town is having a shortage of homes to fill with their tennants. So I am very interested in buying 3 bedroom homes in my area and renting them out to their tennants. How would I go about purchasing or controlling these homes to the point where I would eventually pay them off with the rent money from HUD? I am looking to buy $50-60,000 homes that I can pay off in 6-8 years.
Thank you
You should contact your local HUD office to see what there requirements are for a home. Here you have to fill out a landlord packet and send back into the office once you’ve found a tenant for your home. Once the LL packet is processed, they’ll schedule an inspection. Once you pass the inspection, you start getting rent for your unit. Many people won’t accept section 8. Some because of the stigma with the tenants and some who don’t want to have to do the work necessary to pass the inspection. The tenants here are required to stay on the program for at least one year once they receive and start using their voucher. The rent amount HUD pays varies based on the tenant’s financial situation. Some are on full rent from sect 8. Other tenants have to pay part of their rent. Here the prospective tenants have a couple months to find a place when they get their vouchers…otherwise the voucher expires. So these people can be like vultures once they finally get their voucher. Some have been waiting to get on the program for a year.
You still need to do a cash flow analysis of the house deals to see if the rent would meet your goals of having the house paid off in 6-8 yrs.
I am having problems purchasing or controlling thee type of homes. I have no problem finding homes, just purchasing them. I am thinking of looking on the internet for people who are selling thier home rent to own, but I am assuming they will want a large deposit, (even if they want a samll deposit, I wouldn’t be able to swing that at this time). My business credit and my personnal credit are not bad but they are not good enough to buy a home without a downpayment. Especially since I do not plan on living in this home.
Any ideas on buying or controlling these types of homes?
Thanks
The reason there is a shortage of Section 8 homes is because landlords don’t want to be in the program. There is a reason for that reluctance. I suggest that you might do some more studying.
The HA varies from town to town and some are OK to work with and some are impossible. That’s something else for you to look into.
HUD verifies ownership of the rentals, so they might not allow you to rent-to-own a place and then turn around and rent it to their clients. Any seller would have to be completely insane to rent-to-own a house to you and let you place welfare recipients into it to tear it up.
my mechanic has about 12 houses that he rents to hud tennants and he is very happy with results. I havent heard too much from other investors except one who is looking very hard to rent out his four dwelling house to four tennants. he is considering this idea.