Section 8 Mastery - Free live master Class

Hello and welcome to another episode of Multifamily Strategy Live, coming to you, uh, this weekend specifically because I'm getting sick of getting all of these ads on the little-known secrets of, uh, government-backed checks, how I get all this money doing— then you get like the boats, the cars, the super houses. Guys, um, there are no secrets to real estate. So I wanted to open there, but I got so fed up with this, and then I looked at the pricing for some of these courses on Section 8, which is, by the way, one of the easiest strategies you can possibly— like, by far one of the easiest ways you can possibly implement anything into your portfolio. They're simple programs. There are organizations in place that are ready to help you do this. It is not hard. It is not complicated. You do need to know a couple of things. I'm going to share with you the roadmap of how to actually implement Section 8 into your portfolio. But if you guys have been looking at like any of the ads that I keep getting hit with on Section 8, or why this is the future of government-backed checks, uh, this is a really, really simple thing that I'm going to show you guys exactly how to do. On this live here today. If anyone has questions, go ahead and post them in the chat. Um, a comment section will be live here. I am bouncing between both Instagram and YouTube primarily for the chat. So if you're watching here on Facebook or LinkedIn, go ahead and ask questions here. Uh, Lincoln, by the way, have I moved to my new house yet? No, I will be driving down on the 5th. I think I'm arriving on the— if I recall correctly, I'm taking a scenic route. Uh, we're gonna go through Yellowstone, spend a little bit of time together. I think I'm getting there on the 11th or 12th. Uh, but almost moved to Texas. And by the way, I did it with these strategies. I bought a bunch of multifamily properties starting with no money. I talk all the time on this channel about how to do this. A large portion, a little over 20% of our portfolio, is Section 8 or other housing programs. So how do you use these? How do you implement them? This is going to tie in exactly because you can find financial freedom doing this. It's just you have to have some game plan of what you're doing. So giving everyone a little bit of time to get in. I always like to do a little bit of warm-up, talk about, you know, what's going on in the portfolio and how we are actually building things. And I'm going to dive in directly to the lessons on Section 8. Again, this is just a free masterclass that I'm running today. If you want to plug this into your existing portfolio or you want to make this your main strategy, Section 8 is not that hard. I've learned a lot about a lot on how to do it, but there's really only 2 or 3 main pieces. Of course, you have how you find the properties. We're going to talk about what type of properties you're looking for. You have to understand how they calculate fair market rent. We're going to go into that. How to identify if you're in the right market for Section 8, which is really easy to do, the resources available and the renovation standards they have to hold yourself to, to be able to provide this stuff. Once you get this down though, it's like autopilot. Um, and we've done some really, really big housing contracts that have had government checks. So we're super excited to share this stuff. Um, again, uh, feel free to be posting questions both on YouTube and Instagram. I am going to dive into all of them, uh, after I do this free training. The goal of this one, as opposed to most of my Wednesday lives— we go live 3 PM Pacific Standard Time, by the way, every Wednesday— is this is actually a free training. I am trying to get through to all of those online gurus who are just teaching like simple, simple, simple stuff for tens of thousands of dollars.. You do not need to sign up for a special mentorship. You do not need to pay me for this stuff. This information is simple. It is free. I'm more than happy to show anyone how to play this game. So we will dive into all the questions. So again, keep posting those there. I like to roll for about 5 minutes. We're 4 minutes, 20 seconds. At the 5-minute mark, I'm going to dive into step number 1. So for those who are waiting, we're about 30 seconds out from really diving into exactly what you came here to see. Which is the Section 8 strategies, how you actually implement this in your portfolio, how you build a portfolio utilizing Section 8. Uh, by the way, I don't do this in all my portfolio. Again, it's a maybe a little over 20%, uh, but I have done this in multiple states. I've done this in Texas, I've done this in Washington. Uh, it is easy to copy and paste this strategy just about anywhere, and that is what we're best in the world at—value-add multifamily properties. So if you guys are here, share this with a friend, blast this online. This is a free training. If you guys know anyone who would like to see this, go for it. Keep the comments rolling, keep the likes rolling, because I would actually like to get this out to a ton of people because Section 8, uh, I'm gonna drop a ton of value here, uh, starting right now. So number 1, um, I do value-add entry-level multifamily housing. If you're doing Class A properties, you typically don't get a lot of Class A style tenants in Section 8. Now, is there a place For housing programs and Class A, yes. It's probably not going to be Section 8. It's probably going to be other housing programs. If you are trying to build a rental portfolio, you're trying to get income up, and you really like the concept of guaranteed monthly checks, I love these programs. Per building or per LLC, I get one check for several tenants. It is government-backed. It is guaranteed. It comes in at the same time every month, and it is fantastic. It adds stability to a portfolio. It also helps me set my rental standards. So I'm going to start with step number one. Are you buying the right assets in the right place to use Section 8? Now, if you are in that entry-level housing, so you're talking, you know, entry-level market rent, uh, you're not extravagant buildings. A lot of this is Class C, Class B properties. They're decent, but they're not super, super, super nice. If you have a, what I would call a market rate property, it's a nice place to live. We'll get into the renovation standards, by the way, but it is up to date. It is safe. You have all of the safety, habitability, and aesthetic pieces taken care of where one would want to live in this property. Ethically, it's a nice place to live where you're like, hey, if I was in a similar financial situation with these people, I'd be more than happy to live in this space. This is somewhere where I would be comfortable living in their same situation. And you go through and you go, okay, now what, uh, what bed-bath counts do I have? Do I have all 1-beds? Do I have a mix of 1s and 2s, which I really like? Um, do I happen to have any 3-beds? Because those are awesome on Section 8. They're always looking for more 3-bed apartments for families. So you need to look at, okay, what is it that I'm actually buying? And the first thing you're going to do, absolute first thing, note takers, write this down. You're going to go to your local housing authority. There may be one or two that service your area, but you're going to go to the most immediate local housing authority. You're going to call them and you're going to let them know what it is that you are trying to do. So for me, when I reached out, hey, I had a 38-plex in particular. At the time I first reached out, I had over 100 units, but I had these 38 where I'm like, hey, This building is perfect, I think, for Section 8. I would love to work with you guys closer. First question, how many open vouchers do you actually have? Now, if you're unfamiliar with the voucher program, it's based on fair market rent, which is— I'll show you how they calculate that as well, but it's based on fair market rent by bedroom count. So if it has X amount of beds or it's a studio, they have a maximum that they are willing to pay, and you always list at that housing authority maximum because that's what they'll pay. If you have a reason they should pay even more, you can actually negotiate this piece a little bit. So if you have like a B+ property that has some extra amenities, you may actually be able to get above fair market. But the first question, how many vouchers do you actually have out right now? If they have no one to place, that's probably not going to be the strategy in the area that you're investing in. If they do have some, the next question I ask is how many expired last year. See, on the voucher program, there's actually a set period of time that they have to find a house or housing that meets their voucher requirements. So it will tell them how much they will cover, how much the tenant is responsible for versus the government back check. Oftentimes it's not 100% of the money, but they go, this is what you're responsible for. This is the type of housing you qualify for. You now have to find suitable housing. They're then going to do an inspection of the housing to make sure it meets their rigorous standards. If it does, you go ahead and you sign a contract with the housing authority. They place the tenant. You now have a tenant in your building. You are set up and on your way to getting checks every month. When you're doing this though, if they had a lot that expired last year— this is, this is really a gem here— if they're like, if they're like, hey, we have open vouchers, but last year we had X amount where they were unable to find housing, Now you know that you are in an area that has a huge need. You want to get that number down. That is an easy way to work with your housing authority and say, okay, we want to help fight homelessness in this area. This is how we're doing it. This is our general business plan. And I'm talking, you know, a few sentences on this type of properties I have and what I do renovation-wise. I would love to work with you guys closer and see if we can't help you guys fill those vacancies. Can I get a list of what your pricing is, what fair market rent is for studios through 4 beds? And I always write this all down. I keep it on file. They update this every year. Usually by Q4, whenever I look for it, they already know what it's going to be for the next year. So I get my list every year before the start of the year. I know what fair market rent is going to be for the prior year, so I already know what rents are. Now, in a lot of my buildings, the way they calculate fair market rent, I have noticed that a lot— not all, but a lot— of housing authorities actually have a pretty high fair market rent. It actually might be a little bit above what you're seeing as true market rent. Is what they call their FMR. So if you ever hear FMR, that means fair market rent. That is what they're willing to pay for someone to be there, where their, their analysis says this is what we believe market rent to be. Now the cool thing with this is it actually follows trends based on a 2-year rolling average. So when we see rent go up and up and up like we have for the last several years— it slowed down a little bit this last year, but over the last several years rent keeps spiking. When we see rent spike like that, I know that they're going to react on that 2 years in the future. This is one of the only rental, uh, strategies where you actually do have a pretty darn good crystal ball of where you're going in the future. What does the future hold? Well, whatever happened 2 years ago is what's about to happen to the rents for your Section 8 housing. Now let's dive really quickly into how that's calculated. They use data, uh, it's just like standard rental data, and they're usually using CoStar or Reonomy data, but they're using verified data sources to look at market rent. They're adding a little premium for— they err on the side of more incentive for owners to join their programs. And then it's just based on a 2-year, again, rolling average. If I know what the market did last 2 years, I know what they're calling FMR this year, I already know what rents are going to jump to next year, not only can I market to Section 8, I can market to the rest of the market at the same price, and I just put a little note in there on my listings. In Washington State, it's actually— you can't, uh, you can't just market to Section 8. You have to— it's on the open market, but if someone's searching for it, I always put in the listings Section 8 either accepted or encouraged. I want them to know we are accepting Section 8 housing. If they do a search, they're going to find us. If they're doing any keyword searches, they're going to find Section 8. Uh, we do accept that. It also gives me the ability to find other tenants. So we market to everyone, but we use that FMR, that fair market pricing, to set my pricing for my entire portfolio for that asset class. When I do that, I now don't have to do a lot of crazy math or guesswork trying to get my rents to market. I base it off Section 8 so that I can lease to them and the market. And this has resulted in me having a very stable portfolio with some buildings that have a ton of Section 8 And some buildings that have very little sprinkled in there. Both of them are fantastic. It lowers my vacancy, and by increasing occupancy, um, I actually do make a lot more in my portfolio. I bring in a lot more in rent, and it's very, very stable. Stability is key, especially my strategy, uh, where you need a cash flow from day one all the way through eternity. Vacancy is something that can really kill you. If you have a good use of this program, you can simplify your leasing, you can simplify your rental standards. And, uh, number 3, we're gonna go into it right now. Your maintenance standards. There's an actual handbook. Um, you know what, I didn't grab it. I have it at the office. There's a handbook, and any Section 8 housing— like, any, uh, Section 8 office, they call themselves housing authorities— will have a copy of this book for you. It is an owner's handbook, but it actually goes through— well, it goes through a lot of a lot. I actually write the pricing on the inside cover. For fair market rent, but it goes through all of your renovation standards, and they want to see a lot of things like adequate exterior lighting. They want to see GFCIs and the correct electric in your kitchens. They'll go through everything line by line, and while some of them seem ridiculous or too arduous, almost all of them are based on habitability and safety. What I have done is I have followed those guidelines exactly for my entire portfolio. Whether it's going to be Section 8 housing or not. And what I found is that I actually have better units to a higher standard than a lot of the rest of the market. It gets you automatically out of that potential slumlord territory. And if you're new to this and you're picking up properties that do need some love and do have value add, you now have a set of standards where you're like, hey, when I go through all of these, I'm going to have safe units, I'm going to have correct units, and I'm going to have units that are applicable not just to Section 8, but to pretty much all housing programs. Section 8 is more rigorous in their renovation standards than any other program I've seen. So if you qualify for them, you qualify for pretty much everyone. Plus your units are going to be better just for your general at-market tenants who come in and, you know, see your listing, lease your unit. You're going to save yourself some CapEx, some repairs, some blown electronics, um, could. Reduce fire damage. You're reducing your— like with the exterior lighting, I used to think that's the silliest thing that they had X amount of exterior lights. If you have someone trip and fall outside due to inadequate lighting, you could set yourself up for a lawsuit. A lot of the stuff that they actually have in there is actually really good stuff to protect landlords that you might not have thought of. So if you've set your pricing for entry-level housing, you set your pricing to section— Section 8's listed FMR, fair market rate. You set your renovation standards to Section 8's, I think, slightly overly rigorous renovation standards. You now have a portfolio that looks good, should perform very well, is open to any vendor, and has reasonable pricing based on actual data that you can predict at least 1, if not 2, years into the future with a high degree of accuracy. What your rents are going to be and what they'll increase to. If you're trying to build a stable portfolio, that is fantastic. Uh, now a lot of these, your tenants pay a portion and the government pays the remainder. It's based on their income. They work that out before you get the lease. So they're gonna have individual vouchers. There's gonna be a certain amount that they are responsible for. A lot of people worry about this, so I want you to know this: you still get to screen them like any other tenant. You can run their income. You can run— if you're in a state where they allow you to still do this, uh, you can run their background checks. You can run their credit history, and you can make determination based on your own rental standards. As long as you're not discriminating on anything, you can hold them to the same, same standard that you do any other tenant. And I have turned down a lot of Section 8 housing because they would not qualify. Either they have evictions on their record, they have, you know, horrible credit, you do not have to lease to rough tenants just because you list your place as Section 8 accepted. Now, you can't discriminate if they qualify like anyone else would. You can't say, well, I'd rather have a market-rate tenant than Section 8. That would be cheating, and you can't do that. That's, that's not legal. But what you can do is run them exactly the same standard that you want on any other tenant. You set your standards, you publish your standards, you're transparent about your standards, and you can place these people. And then you get checks for a majority, if not all depending on their income, of their rent, uh, through Section 8. What I have found when you start using Section 8 and you get a good relationship with them, there are other housing programs who work with your local housing authority beyond just Section 8 that you may have opportunities to work with. So we've done some transitional housing where Section 8— uh, oh, not Section 8, excuse me, but the local housing authority or associated program will actually— they will sign the lease as opposed to an individual tenant. And they've used it for transitional housing for families in need. So they're directly on the hook, the local housing authority. They pay me rent directly, 100% of rent, and they place tenants periodically through it. And I get a lot of insurance on top of my normal insurance. If there are damages, there's additional coverage that they have. In addition to all of this, if you have to evict a Section 8 tenant for non-pay, or there's damages, um, there are actual government programs you can always apply. It's usually at the state level, uh, but there are remediation programs that are tied to Section 8 where they will actually help you remediate your unit in the event that their tenants cause damage or, uh, there is a non-pay situation. If you're in a state like I am in Washington State, it is very expensive to go through an eviction. Their mediation or mitigation process actually does help. It does not recoup all the capital, at least that's what I found, but, but it makes a huge dent in your actual expenses. So you actually do have some bonus security above and beyond what you would have on a standard tenant with standard rentals, renter's insurance. So all reasons that I'm super for it. How you buy these properties is like you buy anything. We talk about all the time on this channel, but you can buy properties $0 down. If you didn't know that and it's your first time watching anything on my YouTube channel, surprise, it doesn't actually cost money. To buy properties. It does require consistent profitability to not have to inject more capital. You do need to cash flow on long-term fixed rate debt. This is a huge piece towards maintaining that occupancy and keeping income up so that you can afford to buy properties $0 down. How you find these is you go to any market, you find out who owns all the properties that really probably need to be fixed up so that you can already come in and budget to renovate them to your standards. A lot of the buildings that I've done this with were not heavy renovations. They were mild renovations on buildings that were not being managed correctly. If you can be a better manager than the last person, that is how you make a ton of money in real estate. And generally speaking, I found in markets all over the country with people all over in our mentorship, in our communities, on our Facebook page, on the YouTube channel, what I have found is that anyone can do this anywhere in any market.. You can do it in expensive markets, inexpensive markets. You can do it with single-family, multi-family, hotel conversions, mobile home parks, RV parks. This universally works across the board. You can buy properties without money. Once you have them, it's all about how you stabilize and optimize. And this is a big part, depending on your strategy, of either the stabilization or the optimization phase of getting a property to perform at its highest and best possible use. So if you've been told that this is some like magic thing that's super hard to do, no, it's going to be a call to your local housing authority. It's going to be getting a copy of that, uh, owner's handbook, writing down fair market rent for this year and next year on the inside cover, getting a contact whose name you write down, uh, for the housing authority, and then learning how to actually go through the renovations per the book. And how to correctly list your units. I'm gonna add one last piece before I get into the questions. Actually, I always do this. One last piece. There are some— not none of the ones that I actually work with— but there are some housing authorities who actually have their own websites where they will additionally market and list your properties, and they will do that for free. So you can submit your listings to them, they'll actually market it to a whole market of people who are registered for their programs who can log into their portal and actually see available housing. This is not everywhere, it's not every market, but there are a lot of housing authorities that actually do offer this. So on top of all of the advantages and ease of getting someone in there and marketing advantages, uh, depending on your market, you actually may get direct assistance in the marketing of your listing, which again, the whole goal is to reduce drag on your portfolio. We don't want vacancy. We want consistency in rents. I also just love being able to actually have an impact, like a notable impact, on homelessness in the counties that we operate in because we provide services to those in need. And we do a really good job of renovating, so we are better than any other property around us at the same price point. We're not adding, you know, stone countertops. We're not doing stainless steel appliances. It's entry-level housing, but we are so much nicer than all the other similar buildings doing the same strategy. We lease up first, we get basically all the vouchers, we crush this space by being a little better at renovating, a little better at managing, and everyone around us in the asset class. All right, let's dive into some questions. Um, I'm gonna try to cherry-pick some Section 8 ones, and again, I am on Instagram and on YouTube today, so I'm going to jump back and forth between the two. Um, no, this is about purchase, but I'll start this one because this was asked really early in the, in the stream. When you purchase a, uh, commercial, so 5+ unit multifamily building, do you have an amortization rate of 30 years, uh, like when you do to the bank with residential, or less? So on our general residential loan average, you have a 30-year amortization. I mean, if you just pay your actual mortgage that is due, you will pay off the property in full in 30 years, principal plus interest. That's how that works. Now for commercial, it really depends on the building. A lot of them are 25, a lot of them are 30 years, uh, but it's going to depend on usable life of the building. So if you have a building that probably needs a new roof in 20 years, they're probably only going to give you a 20-year amortization. They're going to limit you on your actual debt products. Your amortization is based on condition of building. Now, if you slap a new roof on that thing and it's a 50-year roof, your odds of getting a 30, even 45-year AM are much higher. It depends on how new the building is and how new renovations are done. There are absolutely 30-year AMs, there's 20-year AMs, 25s. I've seen a lot of a lot in commercial, but more often than not, it will be lower than 30 unless the building is in excellent condition with you know, your major pieces all fairly new or renovated. Dylan's looking at a triplex that he'd like to get $2,400 a month in rent. Section 8 says $3,600 per month. The rent by room says $2K per room, so $12K per month overall. Rent by room, I'm just gonna say this, you can do this and I know people have done this strategy. It's heavy, it's heavily management intensive. And I, in Washington State, thinking about how to evict a roommate on a lease as opposed to like a, like a tenant who rents the whole space, I can see some huge legal and logistical issues there. So depending on the area you're in, bedroom rentals can be a little harder. Uh, shared community space, you're gonna have more disputes between tenants. Roommates are harder than having a neighbor in a whole different unit. So if you're doing bedroom rentals, just know that there's going to be a— there's more systems needed, or you have to own less of them in exchange for upping the yield per unit. If Section 8 pays $3,600 and you're seeing $2,400 is what you normally get, I would definitely look at working with a Section 8 program because if you can get them in and the government is paying for a majority of those, you're going to have people who can afford that higher rent. And that is a huge difference. $36,000 is a lot higher in proportion than $24,000. So if you're seeing that market rent is there, you want to make sure you have a really nice unit where it's going to get leased up. Um, but yeah, that's the exact reason that someone would use Section 8, is you might be able to actually push your rents higher and have the government pay it, which is excellent. You're providing housing, you're helping people in need, you're getting paid more, which is like, on a business standpoint, is awesome. Cash flow is Sweet. Uh, but you get to do a good thing and get compensated for it. So I actually really like— of the 3 options, if you were saying only market is 24, uh, bedroom rentals, or just using Section 8— of those, for scalability, Section 8 would be my favorite. Uh, here's one that mentioned Section 8. Uh, buying another house next week. Mason, congratulations. I'm gonna do renovation, refinance, and most likely put Section 8 in it, um, without option by selling. Okay, uh, thanks for giving us realistic info. It'd be free. Yes, free is really important. Amazing, huge congratulations, by the way. Um, while I really focus on multifamily, Section 8 does work and has a legitimate need for single-family homes, especially if you're a house with children, there are people who a house is the appropriate model for them. So if you have entry-level housing in a house and you want to use Section 8 and that's part of your portfolio, that is a huge need that is absolutely a niche that you guys can serve. So well done on doing that. By the way, what's my thought on rent by room to ex-cons? You're going to be management intensive. The hotel that I purchased, renovated, and then sold to the other partner, we did this project, a 24-unit earlier this year. On that one, that is currently, that is how that's being used. It is specifically working with the local penitentiary for transitional housing for parolees. That is exactly what they use it for. It is a tough niche to be in. Obviously you have, uh, you can expect a little higher crime if it's all ex-cons. Uh, there is a precedent that they may be people who are amenable to committing crimes, so you're going to deal with more drug and violence problems than you might on other strategies. That being said, you are typically compensated for that risk. It depends on what you want to do. If that is in your comfort zone, then do it. If you're trying to create passive income and passivity is the main goal I would accept less cash flow for more passivity. There is a trade-off there though. That's what you're looking at with the ex-con bedroom strategy. With ex-cons, I kind of like the hotel for that too, actually. As far as sidebar, in a hotel where they're like 300-square-foot units, those actually make really, really, really, really, really good transitional housing for ex-cons because you don't have to do a per-bedroom rental. You have a bunch of studios and sometimes one beds in those motel conversions. If you do a really good job on the conversion, they're a nice place to stay. You might be able to get a local housing authority like they did on that hotel to book out the entire building. So they have one master lease for the entire building. While you have a little bit more crime potential there, you know what you're managing and your rent collections are ludicrously easy. So I would actually maybe look into larger multifamily or even the motel conversion projects. I like those better than renting by the room. If you want to avoid violence issues, don't have people room together who are ex-cons. I have found that there are consistently problems with that. If they're all in their separate units, you will cut down on violence. You might not have any difference in drug use, but actual violence when you don't have roommates will go down on that strategy. Absolutely guarantee that. Sean, also, when you calculate loan factor rate, uh, for 80%, uh, bank seller carry, would you include the P&I for the bank loan and add the interest only for the seller carry note? Yes. So, uh, loan factor rate— this is a math question outside Section 8, but I will answer this one. Loan factor rate is going to be across the board, all of it, your total monthly principal plus interest. So that means if you have 2 loans interest 1 and interest 2, principal 1, principal 2, all of your combined principal plus interest for the year. So if you're calculating a monthly, multiply by 12. If it's annual, congratulations, it's already annual. So yearly payments on principal and interest divided by total amount of debt, that is all debt on the building, that will be your true loan factor rate. You compare that to your cap rate. That tells you if it's a good deal. That will get into how to buy these properties so the cash flow, once you buy them, you can get into today's topic, which is Section 8. And I will answer your other questions since these are tied. Lastly, in your interview with Arik was phenomenal. Thank you. That was a fun episode. They say his treasures go for 20% or more seller carry. Therefore, he puts no money out of pocket while still gets 80% bank loan. He does that. He comes in at a pretty aggressively low price point. So that is something to look at. Arik has fantastic strategies, done a really, really, really good job acquiring a lot. The one thing he has not not done a lot of yet is he has not gone through the part where he refinances these. Um, so I'm really like— I think that's when someone like Ark, you can say like, okay, the model worked for sure. What he's done, I love. Uh, once he pulls these into a refinance or figures out— because some of these he did put money down— any raised money or anything where you put down, if he can cash out those partners and he does in fact just own these, no money left in the deal, um, This kid is like 23 years old and has 24— 23 or 24— he has over 400 units. Um, incredible, incredible, uh, creative finance buyer. But that is what he tries to do. Not all, but a lot of his deals are done that way. He will get a bank to carry a first, a seller to do like a 20 to 40% second depending on what they want to do. Uh, the bank— I don't think you're going to see a lot of banks want to go 80% down with the seller at 20. I think that's gonna be really hard to find. If the bank lowers their risk, which means like 60 to 70%, if they have less risk, they're gonna be more amenable to having that seller in second because that second position is not nearly as safe as position one. If they have a lower leverage point, they're more likely to say yes. Dylan, sounds like you and Sean, uh, need to connect. If you can get a property 10% down, a bank's not going to want to go 90, so you're probably going to need an equity partner on any of these, uh, just as a quick note. So this actually does tie in when looking at RV parks. How do you know you'll have good occupancy? Having trouble understanding that. It's the exact same. Like, there's no difference at all between RV parks and multifamily as far as occupancy. You're looking at historically how occupied has this remained, and if you have other parks to comp it with, how are they doing with leasing? It's the same trends though as multifamily. How fast are vacancies being filled, and historically how has the property performed? Um, so if you're trying to figure out if it will or won't have good vacancy, how is it being run currently? How has vacancy been historically there? And then if you compare it to any parks that are closer to how you're going to run it, how are they doing in your local area? And that is how you would determine that. If you're not finding a bunch of good comps, I would look for— first thing I'd look for is I would talk to the owners of those properties. So I'd go find other RV parks if you're looking to buy one I'd talk to the other owners and ask those questions to them. The next best thing is what broker has been selling the most of these, try to get them on the phone and explain what it is you're trying to buy and see what they think as far as occupancy. But nothing beats other owners in your market for that piece of information. If, uh, the RV park is underperforming, you're trying to figure out where you're trying to bring it to, that's what you're looking to do. Steven, would you look in a different market if Section 8 Is unresponsive to calls and emails? No, uh, my market— and that's a great question, uh, Section 8's phenomenal piece of my strategy. It is still around maybe a little north of 20% of my total portfolio, and I have Section 8, uh, tenants where the actual housing authorities love working with me. So I actually have places where they do want to work. However, if they didn't, but you have a great market and you can buy deals that cash flow long-term fixed-rate debt, it's a market you want to invest in. You don't have to use Section 8. One way that it has been mismarketed, if you've seen any ads for this stuff, one of the major ways Section 8 has been marketed incorrectly is they go, hey, I buy these cheap houses in the middle of nowhere and then I put Section 8 tenants in them. I'm like, cool, if you want to own a ton of houses with a ton of maintenance and with a ton of— there's a ton of headache. If you want to do a just a bajillion small, tiny single-family transactions and have individual roofs and electric and utilities on every building you own, you can do that. What I have found is invest where you want to invest and buy the stuff you want to buy. Section 8, I have found, works really well in larger multifamily because you can condense it in one spot. Once they do a few inspections there, you— it's easier to build a relationship, it's easier to do the acquisitions if you're buying larger buildings. And Section 8 providers really do love uniformity. I have a couple of buildings where, while they really should be checking for the maintenance standards being met on every unit, they've worked with me long enough where they're like— they call me and they say, is this unit ready for them to move in? And does it look like the last 3 that we moved them into? And I can say yes, honestly. And they will look at it and they will just place the tenant. And I've had a few where we never even got the inspection, they just put a tenant in there. They do that because they have a relationship with me and they know that I'm consistent and they know how I renovate and they know the teams that I use to renovate. They've worked with me long enough for that building where they're like, okay, we know exactly what we're doing. We have a system, we have a process, we love placing people there. We have other people there. It's really easy to plug and play if you have one building, one LLC, multiple units. I really love this for multifamily. Um, I know that's a little bit of a tangent, but I would not change my market just to make it work with Section 8. If it's a great market and somewhere I want to invest, invest there. If you're in an area that has Section 8 that is available, I highly encourage you to integrate it into your strategy. It's been phenomenal for me. It's very easy to do. If your local Section 8 program is not responding, by the way, I have one in Texas very hard to get a hold of. It took me about 4 weeks to get a hold of them the first time. Once we got a hold of them, we now email back and forth. I got a contact there who is actually very responsive. She just happens to only work part-time, and it's really hard for us to connect, uh, in different time zones when she works a half day and I tend to do a lot of my phone calls later in the day and she does a lot of her work in the AM. We just found that there was a lack of uniformity between our two calendars. When I finally found that contact, we did start calling back and forth. It's been a beautiful relationship where in a market where I have 51 units, I have 11 tenants on Section 8. Again, keeping true to my just around 20%, uh, that tends to happen. Um, they were actually difficult and unresponsive to calls and emails until I finally landed that first call, and we've had a beautiful relationship ever since. I actually recently had an AC unit go out With no contractor available to, uh, replace it in time, which can't happen like legally, especially in Texas where it's like 100 degrees right now. You need to have working ACs. We had one just die that we recently serviced. Um, no, no one expected this. I could not get a contractor out there. I live thousands of miles away right now. We didn't have any options. Local housing authority actually came in and on their dime added 2 window units., for AC while we took 2 days to get a vendor down there and a brand new AC installed. That actual partnership with them, they didn't have to do that. They spent their time and their money to help me out servicing a tenant who they placed and I manage for. And that's because we have a great relationship and they know that I would fix it if I could. They're like, hey, we're gonna step in, we're gonna help you out. Uh, just make sure we have a plan for this. And keep some backup units, like little window units, in case another AC goes out. That's a good practice down here. I'm like, you know what, that is. Now it lives in my property management company SOPs, is you have to have a couple of those stored on site if you have, uh, AC units on a multifamily campus. I have Section 8 to thank for that, and that was somewhere where there was actually a difficult program to get responsiveness from. Lincoln, do Section 8 tenants cause more damage to units on average? My experience has been for entry-level housing, which is where you usually would place them. No, you get terrible people in all asset classes, by the way. I've seen one of my friends lived in a Class A apartment building and one of his neighbors got murdered in the floor above him. Like, horrible. You still get crime, you still get bad tenants, you still get crazy people from Class F to Class A. That being said, it's usually the problems that you have are usually more similar to your building class. So a Class C building, you're more apt to have drug problems in lower rent areas, whether they're Section 8 or a market tenant. They're about the same based on the individual asset that you're leasing. So I would say I've, I've had problems with Section 8 tenants, uh, specifically exactly one of them. Uh, the rest of them have been fantastic. I've just had one that was really bad, and I inherited her. She would not have passed my rental standards was I placing her. She came with the building when we purchased it. Mason, in your opinion, would it be better to pull equity out of my other house and renovate and put down on this one or put it out of pocket? Not enough inputs. Just to be perfectly honest, um, I have refinanced properties and taken the money and bought other properties. I've also just done things out of pocket. If you have the money in cash and it's just sitting in cash and it does not materially hurt you to write the check, traditionally it's going to be better to take less debt and to write the check. Like, don't leverage beyond what you need to leverage. Um, so that would be my immediate answer, uh, but it depends on your personal situation as well as How much are you taking out at what interest rate? And what is the actual, you know, what is the actual return on the thing that you're buying? Would I take a HELOC out at 8% today to buy a property that's yielding 4%? No. If I had a property that's yielding 4% that I can just close with my own cash, that I think has some upside and be a really good addition to my portfolio, yeah, I could look at that, but I would not lever something else that's already stable. I wouldn't provide less stability there to buy something else that doesn't cash flow. So I don't have a specific answer for you, but generally speaking, like in super broad strokes, if you have the money, I'd put the money in. If it doesn't, you know, if it doesn't strap you for cash, if you want to pull from the other property or you need to, to close it, then I would do that. And netting $500 a month after maintenance on a single family, that— I think that's, I think that's pretty good. I don't own any single family, but it depends on where you're at, right? If you're in like California, that's— then you have a really expensive place, that's horrible. If you're in, uh, you know, If you're in like Indiana on a single-family house, that's incredible. Pricing has so much to do with these things. Uh, when buying a property, um, how do you see how quickly things get filled? Well, if you have a data source, so I usually reach out to larger brokerages, uh, things like CoStar, you can actually run market analytics. And what you're looking for is absorption. That is the rate in which when things hit the market that they are filled and absorbed into the market. So I'm looking for markets that have a higher absorption rate, which is telling me that my time to lease is going to be faster. That's another thing that— one of the first things I ask other owners in a market is, how is leasing going and how long does it take you to place tenants? I really want to understand how each market works. Some places Facebook Marketplace is the holy grail to lease. Other places no one uses Facebook. I've invested in a market where Yellow Pages is still the best place to quickly lease a unit. That is insane to me, uh, but you get rural enough and that's the case. So, um, how fast it gets filled is going to be based on, like, get input from other people who've been playing the game longer. That's why that's so important. If not, use good data sources like a CoStar or a Reonomy where you can actually look up some rental data. Uh, CoStar is probably the best single place because they own apartments.com, so they get that data feed. Um, they're probably the best, the single best place to track things like absorption. They're, they're a little bit cost prohibitive, so work with a larger brokerage. I'm talking like a CBRE, a Marcus Millichap, a JLL. Uh, these larger commercial shops all have really good data on this stuff. If the business plan for every market is low occupancy, the best way to look at comps, uh, vacancy on CoStar. And again, the owner's thing is really the main thing there. Uh, talk to owners who own that same asset. They're gonna have way better insights than any piece of software could. Steven, I just heard some horror stories with the program. Yeah, you want to make sure that you are not skimping on your rental standards to place these people. I, I've actually seen programs that basically say like, it's government-backed, it's fine, just put them in there. Don't damage your property. Like, run good background checks, run the credit checks, do everything you do on a normal tenant. And if they don't qualify, it is okay to tell a housing authority, no, I don't want to lease to this tenant. You don't have to rent to anyone that you don't want to. So if you have a reason that is non-discriminatory where they don't qualify, they don't qualify, and that's fine. And I have found that if they're Section 8, that just means that they— all that means that they needed some economic help. There's a lot of reasons why someone would need housing assistance. If they otherwise qualify and just needed the assistance, then go ahead and, in my opinion, let them in. They're not going to be any worse than any Joe Schmo off the street for your entry-level property. Just because they have more money doesn't mean anything. Like, to be fair, Some drug dealers have a lot of money. They can afford a lot of rent. We had a unit— I won't say which one, but I have— I actually know the owner really well. One of the units I manage, you guys may have seen this on my Instagram page, they had the FBI SWAT, DEA, and there's one other. There's 4, there's 4 organizations who showed up in like an MRAP on the driveway for this guy who was calm tenant, super quiet, never had issues with him ever, always paid his rent on time. Turns out he was pretty high up in the drug dealing rings, I believe cartel related. Never would have guessed in a million years. Quiet guy, super easy to work with, always paid rent on time. SWAT came in, busted down the door, gonna be in prison for an extended period of time, uh, they found all the, uh, you know, drugs, money, guns, the whole nine yards. That was not a Section 8 tenant. It can happen with anyone at any economic scale. Just so happens that was a market rate tenant. Could have been Section 8, but Section 8 I haven't found to be the thing that indicates they're going to be a bad tenant. I have a lot of great, great people and great families who are on Section 8. And you get to— you do get to do a good thing. It's— as a landlord working with these, you know, when you get all those kind comments on social media about how landlords are leeches and you're terrible, you don't add anything to society, it does feel good to be able to be like, well, you know what, I actually rent to people who like need help. Like, we help end homelessness. I really like that on a personal level. I feel good about what we do when we do an excellent job providing great housing to Section 8 tenants. In Houston, Section 8 sucks so far. Have not used Section 8 in Houston yet, though I do have property there. I'd be interested in seeing the rental standards and the tenant mix there because it could be, if it's in a rougher area, there are actually particularly, there are some areas of Houston that are quite rough. Houston's interesting and it's almost like a street-by-street level. You can have one road that's like, oh, there's a great safe place to live, but if you go two blocks over, it's not. Houston has some weird investment things. Like, people who invest in Houston usually specialize in Houston for a reason. But for Section 8, if it is sucked there, I'm wondering how much of that is location and all the tenants in that area would be rough, as opposed to, you know, they're actually just the people on the program are rough. Both are possible, but I'm wondering how much of that is location. Lincoln asked, uh, so what are the reasons not to do Section 8? The downsides, um, the downsides to Section 8: one, you don't want to go through all the extra renovation or you haven't budgeted for that to meet the standards. Two, um, they do make mistakes. I have actually had, um, three times I have had the Section 8 checks come in almost a month delinquent. And all 3 times I got— I called in and said, hey, um, you guys haven't paid rent yet. All 3 times they had run out of money because they had, uh, these specific one in Grant County, Washington, the housing authority could not do accounting and they would misallocate or they would actually mess up money. Just because it's government-backed, it is guaranteed money, it does not mean they don't make mistakes. And if you have 20% of your portfolio who has not paid, your mortgage is still due at the same time. And if they decide, uh-oh, we made a mistake, we'll pay you later in the month, and it's a large part of your organization, that's actual, like, not cool. This is just not cool. I've run into that. If you want to have a— I want to be sensitive about the word I'm using. If you want to have a class of tenant that better aligned to— so say you have like Class A or B+ properties. People who have a lot of financial need often are going through a hard time. They may or may not be recovering from bad decisions, but they've— they have some financial difficulties at some point in which they needed the assistance or qualified for the assistance. If you have a very nice property, you may not want the type of tenant who you will receive, just because they might not— what I found, um, I rent to people who don't have as much money. I have properties that have lower rents, so Section 8 makes perfect sense. If you have someone who is in an area that is more affluent staying in a higher rent property, even if it is Section 8, they may not quite be a fit for that property. You may end up actually paying more in damages than had you rented to a tenant who can traditionally afford a Class A. Place to live. Food for thought. Go in Section 8. Do they have an issue with regular market tenants at the same price? Uh, more— I, I think I've kind of been saying this throughout, but yeah, um, at the same price, a normal market tenant is not usually going to be a lot better than a Section 8 tenant at that same price. Which is kind of my point of, uh, like, are they rougher tenants? They're rougher in some regards, but they're, they're the same type of tenant you're going to place in the building. You're not going to put a non— you're not going to take a building that's not a good fit for Section 8 and put a bunch of Section 8 people in it. But if it's a good fit for Section 8, you're probably attracting other people who also don't have a ton of bonus expendable capital. So I mean, I have some tenants who live in really small spaces who have a ton of money. They just— they're like, hey, I don't need a fancy place to live. I like to save a lot. Um, I have tenants who just like simple living. I also have some who don't have a lot of money. Then I have some who need government assistance. Uh, roughly all about the same as far as condition of unit, how they are as a tenant, communicative. Um, it's all based on how you are as a manager, or if you have a property manager, how well they screen. This is a good question. This is a good question. This is really important. For Section 8, do you target the top dollar for FMR? Yes, because they'll just give it to you. Uh, I did this in Stephenville, Texas, 25-unit building. They were at— so FMR was $780 a unit for one beds. That's fair market rent. For those joining, fair market rent based on housing, uh, by housing authorities analytics, was $780. The tenants on housing were paying $450 a month. I called housing and said, I'm confused, is there any reason that we're charging this little if you guys have fair market rent? Like, is there anything keeping me from raising rent to fair market rent? Their answer was no. We've talked to the property manager many times about this, and the prior property manager did not understand, and she kept keeping rents really low. We instantly raised rent from $450 to $750, and our tenants did not pay $1 more because it was already covered. You always go for the max fair market rent. In Moses Lake, I actually list it for $5 less because I know I'm not the only person who is marketing using fair market rent from housing authority as our standard. So I just happen to show up $5 less than everyone else trying to do the same strategy. That's it though. I mean, that's still shooting for the max. If you're off, if you're off of FMR by $5, you're at 100% of FMR. I mean, that's the— $5 is not going to be what makes you rich on a monthly basis on any property. So yes, you do shoot for that. If you have a reason to go above— I have a duplex that's like really nice that has like a yard, 2 stories, hardwood floors, washer and dryer in unit, 2-car garage, stainless steel appliances, like everything about this landscaping much, much, much, much nicer than what you would expect. They actually will pay me more to place a tenant there because you can actually negotiate. There's a difference between fair market and reasonable rent. And what they pay is not actually fair market. It is rent reasonableness. So if you can justify what the rent is and why it is that way, and you do it in a sensible manner like that— I can list out professional landscaping, multiple-car garages, better appliances, better finishes, stone countertops— I have all this stuff. They will actually pay more when you can itemize those and say, this is the reason why it is reasonable for rent be this. Rent reasonableness is a really important term that you want to know, because if you are using this on like a Class B property, you should get more rent than a Class C property. And if you can communicate the differences between what you're doing and what another unit that they're placing someone at that is like— which is really easy for me because I have multiple buildings— I go, look, you're paying X amount to put them in this basic unit on this 38-unit campus that's clean, tidy, but very basic. I have this much nicer building here. It does command higher rent. Here's why you get higher rent. Thoughts on Tom Cruise? Uh, by the way, that's not the actor. He is like— he is an online Section 8 guy or other big Section 8 investors selling courses. Here's my thought on Section 8 specific courses. It's BS. It's super easy. If you look at the way— I'm not calling out Tom specifically, I'm talking about big Section 8 online course gurus. I see the same marketing across the board from all of them. The secret strategy, or look at my boat, yacht, mega house, any of this stuff. If you buy a boat, a yacht, a mega car, like supercars superhouses, a lot of it is done as specific write-offs against active income, which comes from being a course salesperson. So the problem that I have with these is they go, you can be rich like me if you do this. Section 8 is not why someone can afford all those things. You can afford all those things if you have a course that helps you buy properties, which you use Section 8 for. And you use the Section 8 properties to sell your Section 8 course. It's a different dynamic. You're not just going to come in to any of these online gurus and make the money that they're making or buy the supercars that they're— the stuff that they're advertising is not real. It's fed— they, they have multiple facets to their business, and I've seen some of the numbers for these guys. If you're seeing them advertised heavily everywhere I will say this, I have an online course. It is super expensive to market it, like unbelievably expensive on a monthly basis, tens of thousands of dollars just to even get the word out that there is a community that people can join. Um, so when you have the, the mega— any guru selling a course where they're all over the internet, they're everywhere, um, they're running a business that makes a lot of money that they're buying real estate with, and they're not teaching you how to launch a course. They're just teaching you the real estate side. So I just wanted to say that it's not realistic to follow the strategy. Um, other than that, I, I'm running this video today because I'm pissed off with the ads that I'm receiving for this little-known secret. You learn Section 8 masterclass. Guys, the things that I shared with you today on Section 8 Anyone can figure out how to do it from there. It is so easy. I would never personally charge someone to teach them Section 8 ever. And this is coming from someone who has a course and a mentorship. Like, there are things that I do with my time and my mentorship group I'm so passionate about. I have never billed anyone to do that. I added that to my course for free. Section 8 Masterclass. I have a whole itemized thing. I run through some deals. Like, sure, building a massive portfolio using no money, that takes a long time to teach. There's a lot to that. My course costs less than all these people's courses though, and I think it's astronomically more valuable. The Section 8 piece, you can learn it for free. Um, talk about gurus online, you know who else talks about this for free? I don't mention them much because again, we compete fairly directly. Uh, but like Pace Morby, large online real estate guy, um, he goes out and he teaches Section 8 stuff for free. He's actually had some fantastic free content on it. Uh, he's doing the same strategies, is nothing different than me. The way the two of us use Section 8— I just watched a video from him, same thing. Section 8, irresponsible to bill someone on programs that already have a ton of support where you can learn it for free. Call your local housing authority, watch my YouTube channel, watch 100 other videos online. Everything you need on Section 8 is free, easy, plug and play to implement. It is not hard to master. And then if you have questions, you know, join a different mentorship group that teaches you the harder pieces, like how to buy a ton of real estate and not just cheap crappy real estate, which is the other thing that I see a lot of these gurus do, is it's like a 'Buy cheap houses in the Midwest. It's amazing. If you, if you make $100,000 a year, you can buy like 5 of these.' It's like, that's a stupid strategy. That's really dumb. If you're here and buy a ton of single-family houses, super hard to scale, super stupid. Don't do it. You heard it here first. Uh, uh, sorry, you hit my passion point. I am not targeting this, by the way, at Tom Cruise. So Tom if this gets back to you, don't sue me. I'm not, I'm not upset at anything that you are individually doing. I've never seen your course. I've never— I've seen your ads. I've never seen your product, so I don't know. But that type of thing, I personally would not sell any knowledge on Section 8. I'm happy to give it free because it is very, very, very basic. Archie, log on to Bitly. How do you find Section 8 tenants? You call your local housing authority. You ask them one, How many vouchers do you have out right now with people who are not placed? 2, how many vouchers did you have expire last year? That is how many people who had a voucher but could not find a house. If you can solve that problem, you're now a hero. They're going to work with you forever. 3, you're going to ask them for FMR, that is fair market rent, so you know exactly what your unit's going to rent for. If you have units in your portfolio where fair market rent would be either an increase in rent or That is a completely— like, your numbers on your portfolio work if everything in that, you, like, that building was Section 8. You are a good candidate for Section 8. You're going to want to get them to start placing tenants in your properties. But how do you find them? It is a phone call away from a local housing authority. And the great thing with them is they also will usually introduce you to other housing agencies. So I have a whole bunch of stuff with— there's a Mormon temple in Moses Lake, there's Catholic Church has a program up there. Uh, there is just a non-religious nonprofit, uh, that works directly with housing authority and actually has some co-branded programs. All of them now work with me. There's also a VA program, uh, that's very similar to Section 8 that works with us. That was all referred to us by Section 8 by being excellent to work with them. So your local housing authority is where you start. You ask those 3 questions, you tell them about your portfolio, you get your first few people in there. But then you branch out to other organizations. If you work well with them, it is amazing how large of a pool of people you can bring in. You can really make an impact in your community. You can feel good about the real estate you do. And bonus, you can make a boatload of money doing it, which is excellent. I will say it is a lot easier to renovate a building when it has a lot of income and the real estate is buying the real estate. I will never market this as like a cash grab of it's like, oh man, Section 8, you're just going to become rich. It is a way to add stability to an otherwise well-purchased portfolio. Cory, how do you rent out at top dollar and still, um, market towards traditional tenants without crazy vacancies? Um, so I have found that FMR, fair market rent— I only buy buildings where I'm like, I think that these would work. Like, that when they're renovated, they're done, the FMR is reasonable for them. Like, that's what I would rent them at. Um, you market just like you would anywhere else. Facebook Marketplace, I use Appfolio, which when I upload them, it pushes out to Rent.com, to Zillow, to— I have a subscription for some properties on Apartments.com. But you get to know your market and you get good at managing properties. If you have a market where there's a lot of vacancies you may not be in a great market, or you may be in an overbuilt market. A lot of the places that I rent, vacancies get filled very quickly. That is why I love the markets, because there's high population growth, there's a need for housing. Um, vacancy— because if you're at market rent, you're at market rent. So if you're— even if you're pushing the top of, like, this is market rent if you're pushing market, you should be able to get market unless you're missing something. So we're always looking for stability and growth and population growth and interest in the properties that we have. I want to make sure that I'm not investing in an area that has a major vacancy problem because that means I'm violating my first rule of real estate, um, as far as like location goes, which do people want to live here. If people don't want to live there, you're going to have a struggle because just supply and demand, it's basic. Like, it's— that's like Econ 101. There's too much housing and not enough people, uh, you're not gonna be able to lease anything at fair market rent or under market rent. It's gonna be hard to lease. Dylan, what's a good absorption rate? Um, I like to see things from when they go on market to when they're leased. If it's taken an average of less than 60 days, that's telling me that we're churning through stuff pretty quick and we're doing a really good job of placing tenants. Another thing that I'm looking at, if you're looking at a CoStar report or other market report, I don't want to see a lot of vacancy in that market. If I'm seeing above 5 or 10% vacancy, like between, you know, in there, it's like, okay, that's okay, right? 7% vacancy, it's like, that's not bad. If you're getting over 10% vacancy in a market, I'm like, there's either one, too much supply, like they've overbuilt, or people are moving out, we have a population problem. Either one, not an ideal place to be loading up on multifamily. That's a hard place in the cycle if you're overbuilt and there's too much supply. Trying to add your supply to the market, you're going to have headwinds consistently. Now, all markets go in cycles, there will be a time to buy there, but if you're like jumping in and you're in the cycle where there's too much inventory, it is the hardest, hardest place in a market cycle to stabilize, uh, really hard. So that's what I'm looking at for an absorption rate, is I want to see on average within 60 days things are getting occupied. Doesn't Ben Mala do Section 8? Uh, Ben Mala does a ton of Section 8. Ben Mala has been buying for a long time at crazy leverage points. Um, pretty darn good investor. He does a lot of Section 8. Yes. From Nick, I'm having trouble finding good Section 8 tenants that have a job and are good people who are going to do what they say they're going to do. What's your best method? The local housing authority. So for me, housing authority will be the one who provides them their vouchers. Tenants generally apply, so you work with them and housing authority, but usually it's the tenants who are actually— they have the voucher, they're now applying. They go through the same exact application process that anyone else would. There's no difference in screening whatsoever, like not, not any at all. The only thing that I'll look at a little different is that some of their rent is going to be covered by the housing authority. So the money that they make or the job that they have needs to cover their portion times 3. So there's a lower standard for them to get in because of the government thing as far as their income. But same credit score, same— I don't want to see any eviction history. I want to be renting to the same people. If you just— if the only thing that's changing is they have an income problem, and it could be they lost a job, it could be that they are a single parent, there's a lot of different reasons, but it's— that is the only thing that we're changing is how much income do they have. They still have to be able to pay their portion 3 times over on any given month. They need to be able to pay what they have for rent. They need to— in my portfolio, they need to have above a 520 credit score to be considered. They need to have no evictions on their record. And so when you have these uniform requirements and you're just kind of changing the income based on what is covered, I— you end up with the same people. Like, my Section 8 people are not rougher than my non-Section 8 people. On a unit that cost $1,000 in Moses Lake, you will occasionally get some rough people. It's just not a lot of rent for that area. But Section 8 versus someone else at the same rent, it's about the same toss-up. So this is called LIHTC, Section 8, the same as Low Income Tax Credit housing. No, it is, um, they go hand in hand, they're very similar. And I am actually buying a LIHTC property right now. Um, LIHTC has some different qualifications, or LIHTC has a covenants on how long the property must be kept at a certain percentage of fair market rent. So you actually have to offer below fair market rent, uh, housing. So your rent reduced. So it's actually, for you the landlord, it is less than FMR. Typically people who do this get some, uh, really favorable financing, which is why one would do this. But yeah, those are, those are basically low-income, uh, tax credit housing projects are intentionally held at lower rent, and there's a covenant in place where they are. Now you can use Section 8 in those, but it is not the same, it's not the exact same thing. Also, when they trade hands, you often have to have a nonprofit involved. I won't get way in the weeds on this, Uh, but I have a building that I'm buying that is LIHTC, and I legally have to have an approved nonprofit group that has a specific low-income housing license in the state of Texas, has to own at least 1% of the LLC. So I can own 99%, but they have to be one of the managing members, and they have to own at least 1% of the deal. Um, I have to have owned for another 3 months in that market before I can qualify to make my own nonprofit. I can buy those. So you have— there's a lot more nuance if you can figure out how to buy them. By the way, you can buy at some crazy prices. I'm looking at buying 44 units for $1.8 million in a market where I got a fantastic deal buying 26 units for $1.6 million. Um, I mean, we're gonna— it will be about probably the best deal I've ever done, but the hoops to jump through, that it's a lot more than a traditional purchase with or without using Section 8. Nick, should I just put the first tenants in there and get the government paying their portion right away? I just put the unit on markets at the fair market rent of housing authority and say Section 8 accepted. First come, first serve. I don't discriminate. And I can't say, hey, you weren't Section 8 voucher, we're not accepting you. Um, you put it up for market and you let the market do what it will do. I do like it when Section 8 does it. Government will pay traditionally, even though it hasn't always done that, they'll traditionally pay you on time in the standardized method on the same day every single month, uh, on a check per LLC, which is really nice. So I get, you know, checks for 10 tenants at one time. Just one check has all the tenants itemized on it. Super easy way to run business. How do I pay back an investor that helps me with a down payment on multifam? Um, the real estate needs to buy the real estate, so you can do it out of refi, you can do it out of cash flow from the property. Um, if neither of those are working, you can always do it out of earned income. How we pay all of our obligations— without sounding flippant— how do you pay your debts? With money. There's a lot of different ways in real estate that the money can come from. You can come from a successful sale of another property, so you can, you can flip a property and pay them back. You can refinance a property and out of the refinance pay them back. You can save up and sideline cash flow and pay them back. You can earn money outside of real estate and write them a check. You could have just bought a good deal where you're buying yourself time to save up the money to pay them back. There's a lot of ways to do it. You can also find— like, I've done this on a deal. I had a new investor buy in and buy out the old investor on different terms because the project changed. I actually wanted to do more renovation. I would not be able to pay that investor back all their money and have them fund the renovation. But it was a phenomenal deal with a ton of upside. What did I do? I found another investor to buy out their position with a little bump. So they actually made— they got all of their original capital back plus 10%, and they didn't have to do the deal. A new investor came in happy with the price and gave me the money to to do the renovation. So we did a new project with a new partner. That is 5 examples of things you can do. You can earn it, the deal can earn it, you can refi, you can sell, you can have an equity partner buy in, you can swap out partners. You can't do that indefinitely, by the way. We call that paying Peter to pay Paul. You don't just pay one person, then borrow again to pay them off, and then borrow again. That's dangerous. But within reason, you can get creative with your partnership structures, and someone else could buy out another partner if there is a logical reason to do so. Um, that's 5 of many ways that one could pay back an initial investor who helped you with the down payment on a property. Archie asked, is Section 8 the primary plan when analyzing and purchasing properties, or is it the backup plan? It is a part of the main plan. It is never my primary plan. Section 8 is not why I'm buying real estate. I'm buying real estate for long-term cash flowing fixed rate debt. In markets where population is going up and that I want to own real estate. That is what I'm doing. Section 8 is not a piece of that mission statement. Section 8 is a fantastic tool to have in your tool belt and has played a very significant role in my success using it for about 20% of my portfolio. So it's not a— here's my problem, going back to that guru thing. This is my problem with Section 8. Section 8 is not a strategy. It is a thing that you can do in your existing portfolio. None of the principles of real estate, or none of the reasons that you'd be successful in real estate, are dependent on Section 8. It is a strategy that can be implemented as part of your larger strategy for your portfolio. If you're just sold on like, I'm only doing things that work for Section 8, you're going to hamstring yourself and only do deals that work with Section 8. What about all the other fantastic deals you could have done? This is why I'm so big on deal, then debt, then equity. It's the same logic. Look at the deals in your market, and then if they're great and you figured out the debt and the equity, then go buy them. Then if you can make them better with Section 8, or you can have less vacancy, or you can make more money, or you can simplify your universe, implement the supplemental strategies. People who have you pay tens of thousands of dollars for a supplemental strategy— idiotic. Uh, If you guys appreciated this, by the way, I'll probably run another one of these. I get really frustrated when, just honestly, when I see all this marketing go out for Section 8, like, pay me all this money to learn. It's like, it's not hard and you don't need to pay someone a bunch of money. There's no secrets. You could pay someone to learn how to like structure your portfolio or structure your deals. But a lot of these have really, at least from what I've seen, rudimentary, like really basic, like here's kind of how I'm buying deals. You could buy them too. And once you buy them, you can do these strategies. Like that's not very helpful. So I'll do this for free all the time. Uh, Dylan, thanks for your time on the weekend. Yes. Um, I also bonus, uh, I release a video every Saturday. I forgot to give my editing team the video. So, um, I also owe everyone a video this weekend. So Here you go. Could you talk about the light tech deal? Um, I will. Let me get a little farther on it. Um, there's— I'm figuring out one more thing on, um, the light tech deal. It's under contract now. What I want to do— give me a little bit, I'll run a specific live on that deal because what I'm doing with that deal, I'm actually learning a lot. I want to make sure I know the things that I know before I present that deal, but I will actually show that with pictures Um, I'll actually do like a screen share and actually go through— this is exactly how it works. So yes, give me a little bit more time on it. I'm gonna get through due diligence, I'm gonna get more photos, and I will actually run like a full presentation so you guys can learn everything I'm learning on it. Jason asks, uh, what list should I call for my first creative finance deal? Um, oh, I love this. Get away from lists. You're not looking for any pre-made list because everyone else is going to have access to it. Um, here's what you're going to do though. You're going to go to Google Maps, you're going to look for the longer roofs in residential areas. They're probably multifamily. You're going to plug that into a parcel map, um, or a GIS map is what's also called, um, for your county. And you're going to click on the property, see who owns it. You're going to figure out how to call them. By using Google. If you go to my YouTube channel or if you're watching on YouTube, it is a pink background. It is, I believe, my 5th most watched video. So if you sort by watches, can't miss it. Pink background is back when I had like a huge ugly COVID beard. Check that out. That will show you exactly how to call them and find them. That's like— I think it's like an 8-minute video. It's super short. Reach out to owners in that area. When you are networked with the owners, you will find more deals. If you try to call list, you're going to be running them off of stuff like Rionami, which has great contact info. You'll call owners, but everyone else has the same data you have. Um, I have found the sniper rifle approach is better than the shotgun approach for finding deals because everyone is using technology and marketing to generate and run and market to the same list. If you are going the opposite direction, you will find more deals. Um, so if you are looking for a deal in Utah, The first thing I do to find a creatively financed deal is start relationships with people in the area of Utah that you want to invest. So choose a market, find those properties. If you are having trouble on Google Maps finding them, the nice thing with cities is they actually have zoning codes. So there's limited places you can actually build multifamily. So if you do find a multifamily building, you only have to really find one. You can do it with, um, by looking at actual zoning codes and looking at what's qualified for multifamily. Or if you find a multifamily building, your odds of finding more in that area are really high. So look in those neighborhoods where you're like, hey, I found one or two apartment complexes. You're likely in an area that's zoned correctly and still start branching out from there. Last question on YouTube, then I'll run through the Instagram ones, and then I am off to, uh, off to a going away party for a family member. Corey says, we are transitioning our complex to Section 8 and will be selling the property Uh, and notes in North Carolina. Well, North Carolina is a very hot place, so if, uh, anyone wants to, uh, look at a deal coming up, uh, this is being stabilized and sold Section 8, reach out to Corey if you guys have, uh, any info. I know Corey is a member of our Facebook page too, which is free to join. Um, I have to audit you so you're not like some scammy marketer because I do monitor that page really close. But that is Multifamily Strategy on Facebook. It is a group, Facebook group. We're just about 1,000 members strong. You guys can always connect with people like Corey there for details on his deal. Jason, done one house hack. I started with a house hack. I love— I won't do it again because I actually like having my own place and my own space, my own yard. But fantastic way to start. I had a lot of fun with the live and flip house hack. I did all the BiggerPockets stuff. Um, if you want to spread that across multiple properties, multifamily is the way to do it. That is the, that is the way to go. So congratulations, uh, Jackson, on making those moves. Uh, let me jump over to Instagram here. I cannot share those the same on the screen, so Instagram, I'll run through some of your questions here. I see just a few, there's not a lot. Uh, how do you buy with no money? Well, you deal in debt than equity. You're going to find a property and a deal that you like. You're going to find a debt product that often you negotiate with seller financing or land contract, or you just find a deal that's so good on price that a bank finances it and you can raise the debt elsewhere. Whose money do you use? It could be yours, it could be, uh, someone else's, it could be a friend and family member, though I highly recommend against that. Ludicrously highly recommend. Only problems I've ever had was with a friend, and I've never raised from a family member, so I would not recommend that. But other people in your network, people in the community, uh, people who like friends of friends, um, other owners in your markets, uh, banks, credit unions. There are a million places to use other people's money, uh, but I feel like that word gets thrown around so much in our industry. It's, it's not just like, oh yeah, just use someone else's money. Um, form meaningful connections with people, structure good deals, and out of your good deals, raise capital. Don't do it in reverse where you're trying to raise the money or figuring out who to get the money from before you even have a deal. Josh, thank you, uh, for the comment on the new branding. I appreciate that. Would it be beneficial in theory for current owner of Moses Lake to open up the gates for Section 8? Uh, yeah, Section 8 still has a need at Moses Lake. We're doing a really good job placing them, but, um, I've had a lot of luck there. Scrolling through for any last questions that we missed. How do you screen those tenants? We do it through AppFolio, our software. But if no matter what software you're using, either your property manager or if you're self-managing— I've used Buildium and a screening software, AppFolio screening software. There's a lot of different ways to do it. Usually costs about $40. I usually have the tenants pay that— the applicants, I should say, at that point. Okay, that's what I have on Instagram for the questions. We have one final one. We'll let Dylan close us out here on the YouTube and we will call it a live. Would you, uh, would love in-depth pros and cons of the LIHTC and all the loops that you have to jump through. I will share all of that. Uh, I made a mistake when I bought hospitality because it's too far from value-add multifamily where it's a distraction from what I do. What I love doing is challenging myself with new ways and new structures so that I can better teach. And so by doing this deal, a large reason why I initially was interested in the project, besides the fact that it's like a ludicrously lucrative deal, is because this is a different structure and there's actually pieces that I need to learn. So the reason I do things like this is specifically to be able to better present and show you guys and share the journey. So I will never go on an adventure and not share it here on YouTube. And teach it on Multifamily Strategy, uh, the course and the mentorship. Anything I learn is designed to help push the community forward, and that's why I have the Facebook page so everyone can learn with each other. And that's why we do mentorship in weekly groups specifically for that. So if you want to learn more about that, that's multifamilystrategy.com, uh, the mentorship group. Facebook page is open to all, so check that out. Um, if you guys want to know more about buying By the way, no money down. My last webinar had way more people than it was supposed to. I was going to run it once. I was just trying to do like a free event. Um, I had a ton of people reach out and want to hit that, and I didn't— I just didn't expect that. So, um, I dropped a link in here. I'm going to run one more this Wednesday. It took me an hour and 10 minutes last time to go through everything that I needed to get— go through on how to go from 0 to 100 units. Um, if you want to check that out, that is free to register for. I do need you to register though because, um, I will actually get to— like, last one was pretty well maxed. I need to know how many people are going to be there. Um, so if you can do that for me, it's completely free. All you need to do is sign up and you will get the link for that. Uh, that is on Wednesday at 5 PM Pacific Standard Time. Uh, it is in the description here. There's actually a link here on, uh, on on YouTube. So if you're watching on Instagram, jump over to YouTube. The YouTube video of this recording will be posted immediately after this. Everyone, thank you so much for joining. It was great seeing everyone here. Appreciate this, and I hope this helped. If you guys found this helpful, as soon as the video gets posted, you guys can just drop a comment saying like, hey, this was awesome. It helps the algorithm identify, hey, people actually like this video. So if you're still watching, do me a favor. I'm gonna end the stream, give it like 60 seconds, and just post a comment saying, hey, this one was great and worked watching, if you thought it was. Thank you so much for your time. Have a great Sunday. I will see you guys all on the next episode.