Section 8 investing, but let’s use a real example. Let me show you why the sectioning investing strategy is so powerful. Step 1, find a cheap house. I have plenty of videos on how to find houses like these for $85,000, three beds, 16 square feet, one 2,70 in taxes per year. And this is in Jefferson County, Alabama. HUD rental rates say that a three bedroom in Jefferson County is 1570.
Okay, now that we know the basics, let’s do the math. Now you buy for $85,000 at a 20% down payment interest rate, let’s say 8%, cuz it’s a little bit high. Maybe you’re using a DSCR loan. Closing costs are standard. Property taxes 1,2,70. Insurance, 900 a year, no HOA. Maintenance is 2000. Other cost. Now for other costs, I put 25 dollars.
You might be confused on what this is. It is the utilities. I usually make the landlord pay the utilities. I just think that works easier that way, and you’re gonna get the maximum amount that the government will pay you, which once again is 1570.
Vacancy rate 5%. Management will typically take 10. And let’s do the math now. Would you look at that 22% return on investment? As always, I’m Joseph Katteri, real estate agent in the state of Virginia. Comment any questions and follow for more.