Section 8?

Over at the The Landlord Blog, Anesia had a recent post about her troubles with Section 8. If you recall, I wrote in my blog several weeks ago about my agent's broker telling me that the housing authority in a nearby town handles Section 8 for the city both my properties are in. I hadn't followed up with her advice, but I decided to call them today and get some info. The gentleman said he would send me some literature on the process, but told me the whole process is pretty simple. He then went on to explain it to me over the phone. He asked some questions about the property (House #2), and said their cap for it would be about $1,240/mo. Of course, my eyes lit up - that is until he said that the price includes a utility allowance of around $256/mo. He then said that it would depend on the renter's income level (they would pay up to 30%) and some other things, but it could be lower.

As you can see, I'm fishing the idea of holding House #2 as a rental. I already have it listed for lease, too, but wanted it to sell more than lease. I'm still running some numbers, but if I can get it refinanced, I may - just may - be able to CF positive as a rental. The problem again, though, is the need for cash. I'm about $8k in the red on this house, too, so it would take a significant amount of time to make that up even with $100-200 in positive CF each month. I could do a cash-out refi, but I think the amount needed to get me back in the black + closing costs would put me back in the red each month. Plus, it goes against my goals for this year, which is something I want to protect.

Anyway, even if it doesn;t work out for this property, I can at least start the ball rolling (education-wise) on future properties.