575: Killer Cash Flow with This “Tenant-First” Section 8 Rental Strategy w/Joe Asamoah

Feb 24, 2022

Joe Asamoah, a real estate investor specializing in Section 8 rentals, shares his unique 'tenant-first' strategy that defies the stereotypes of this market. He emphasizes the benefits of selecting C or D-class properties in B-class neighborhoods to attract A-class tenants, leading to long-term, reliable rent. Joe discusses renovation tips and strategies for fostering lasting tenant relationships, even retaining tenants for over 20 years. His insights on the financial advantages of Section 8 investing and innovative property transformations make for an enlightening listen.

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ADVICE

Financial Freedom through Real Estate

Learn real estate investing from successful people on the BiggerPockets podcast.
Discover strategies for finding financial freedom through real estate investing.

ADVICE

Section 8 Strategy

Buy C- or D-class properties located in B-class neighborhoods.
Focus on renting to A-class tenants.

ANECDOTE

Profitable DC Deal

Joe bought a D.C. property for $555,000, below the asking price.
Despite a rehab cost increase, the appraisal exceeded expectations at $900,000.

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Section 8 BRRRR investing seems like a niche within a niche. To start, you have your classic BRRRR strategy (buy, rehab, rent, refinance repeat), a method that many real estate investors have used to gain vast amounts of equity in short amounts of time. Then, on top of the BRRRR, you have section 8 rentals, which many investors stray away from. Both of these investment strategies can be thought of as “advanced” rental property investing methods, but combining them can almost automatically guarantee you phenomenal rent, for years (if not decades) to come.

One investor known for his expertise in both section 8 rentals and BRRRR investing is Dr. Joe Asamoah. Regularly, Dr. Joe may be the smartest person in the room and he really shines when speaking about the often forgotten benefits of section 8 rentals. While many investors simply think of D-class houses and D-class tenants when accepting section 8 vouchers, Dr. Joe disagrees.

His theory is simple—Find C or D-class properties in B-class neighborhoods, and rent to A-class section 8 tenants. The payoff? Very long-term tenants with guaranteed rent whose lives you can benefit directly. And Dr. Joe isn't just hypothesizing about this—he’s been doing this for decades and may be why he has tenants who have stayed with him for over twenty years, paying rent every month, on time.

In This Episode We Cover:

Before and after photos of Dr. Joe’s most recent section 8 BRRRR rental

Renovation hiccups when doing large renovations/BRRRR deals

The “bedroom-to-cash-flow” ratio that makes section 8 a lucrative choice for investors

How to find the highest quality, long-term tenants in your investing area

Building multiple exit strategies out of one property for maximum cash flow and equity gain

The most common BRRRR risks and how to mitigate appraisal and tenant headaches

And So Much More!

Links from the Show:

BiggerPockets YouTube Channel

BiggerPockets Podcast 356: 30+ Rentals (in a Pricy Market) Through BRRRR and Section 8 with Joe Asamoah

BiggerPockets Podcast 498: Real Deal: BRRRR Deep Dive w/ Joe Asamoah (Pt 1)