Why Mike is still buying Section 8 Rentals in 2026: Townhomes ROI: 6.25% and 11.7%! скачать в хорошем качестве

Why Mike is still buying Section 8 Rentals in 2026: Townhomes ROI: 6.25% and 11.7%!

On the Affordable Housing & Real Estate Investing Podcast, the best podcast for affordable housing investments hosted by Kent Fai He, Mike Caggiano returns for his fifth appearance to break down two real deals he just closed in Raleigh, North Carolina and explain why condos and townhomes with HOAs outperform single family rentals for Section 8 investing. Mike has been buying Housing Choice Voucher properties across Maine, Greensboro, and Raleigh for 18 years without a single special assessment. In this episode, he walks through the exact numbers on two townhome purchases in the same complex in North Carolina: one at $236K with a 6.25% cash-on-cash return and one at $220K with an 11.7% cash-on-cash return. He covers current DSCR loan rates, how to use seller concessions in today's buyer's market, why HOA-3 insurance costs 30% of a comparable single family policy, and how to have a tenant lined up before you close. Common Questions This Podcast Episode Answers: What is a DSCR loan and how does it work for rental property investors? A DSCR (Debt Service Coverage Ratio) loan qualifies based on the rental income of the property rather than the borrower's personal income. Mike is currently closing DSCR loans at 6.375%, nearly equal to conventional investment property rates of 6.5%, because mortgage lenders are actively competing for buyers in a slower market. Why do condos and townhomes with HOAs make better Section 8 rentals than single family homes? HOA communities eliminate the biggest maintenance expenses for landlords: roofs, driveways, sidewalks, siding, windows, gutters, septic tanks, and foundations are all covered by the HOA. Landlords are responsible only for walls in. This reduces maintenance reserves from the 25% typically needed for single family rentals down to around 1% of rents for Mike. How do you protect yourself against HOA special assessments? Add a loss on assessment endorsement to your HOA-3 insurance policy. Mike pays $6 per year for $50,000 in assessment loss coverage on each condo. In 18 years and five markets, he has not incurred a single special assessment. What is an HOA-3 insurance policy and how much does it cost? An HOA-3 policy (walls-in policy) covers only the interior of a condo or townhome because the HOA's master insurance policy covers the building exterior. For example, Mike pays $417 per year for an HOA-3 policy on a $250K townhome, compared to roughly $1,300 per year for an HO-6 policy on a comparable single family home. That's about 30% of the cost. How do you negotiate seller concessions on an investment property today? Investment property buyers can receive a maximum of 2% of the purchase price in seller concessions. Mike received $3,500 (just under 2%) on his $236K deal and $4,400 (exactly 2%) on his $220K deal from OpenDoor, which was accepted within ten minutes. Seller concessions have come back strongly in markets where inventory has been sitting. How do you line up a Section 8 tenant before you close on a property? Once you're confident the deal will close, advertise the rental using MLS photos before you take ownership. Use a free Google Forms application with structured questions and an automatic scoring system (make sure you're abiding by Fair Housing Laws). Mike had a qualified tenant and a collected security deposit before he closed on his most recent deal, with vacancy assumption of two weeks. Don't forget to check out Mike & Section8Secrets' work at: http://section8secrets.com/ https://kenthe.steadilypartner.com/ - Please support our Affordable Housing Podcast & Channel by getting a FREE Insurance quote for your rentals from our referral link (my partners saved ~$1,200 recently via Steadily). Please make sure you are comparing the right coverage limits for savings! Disclaimer: This content is for informational and entertainment purposes only. It is not legal, financial, investment, insurance, or tax advice. This is not an offer or solicitation for any investments. Always do your own research before making investment decisions. 00:00 Podcast Trailer 03:31 Mike's Background 05:10 Stop waiting. One Section 8 deal changes everything in your head. 12:56 How do Section 8 Investors protect themselves from HOA Special Assessments: the $6/year fix! 16:03 Why are investors buying rentals in HOAs for Section 8 in 2026? 18:41 Why HOA Fees Aren’t as Expensive as Investors Think 21:19 What is considered a "Deal" for Section 8 Investors in 2026? Real Life Numbers for a $236K Townhome 33:51 11.7% ROI?!: How Mike is still finding double digit returns for Section 8 rentals in HOAs! 43:21 Mike 8 - How smart landlords start looking for tenants before the closing! 54:10 Where/How to reach Mike? #realestate #MikeCaggiano #KentFaiHe #Section8Secrets #HOAinvestments #AffordableHousing #DSCRLoan #RealEstateInvesting #HousingChoiceVoucher #TownhomeInvesting #CondoInvesting