How Does Section 8 Housing Work for Landlords in Memphis Real Estate

[00:00:00 – 00:01:01] Brett: It's five o' Clock Somewhere Real Estate Investor podcast. We had a very long segment with Ameisha Herron, who is our section 8 tenant placement person. So we're going to continue that conversation in the episode. We're going to get back into a little more of the details of mha, why it works, and why Jeff is sleeping through episode number two. Stick around. 
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[00:01:01 – 00:01:04] Ameisha: And the new constructions, the maintenance.
[00:01:04 – 00:01:05] Brett: Yep.
[00:01:05 – 00:01:06] Jeff: Like, yeah, yeah.
[00:01:07 – 00:01:12] Marissa: I feel like those concrete floors with the new constructions help a lot with maintenance.
[00:01:12 – 00:01:13] Brett: Well, that is true.
[00:01:13 – 00:01:21] Ameisha: That's true. But it can be something that they don't just really like. Like that. Because they're cold.
[00:01:21 – 00:01:23] Marissa: Yeah, they are. And they might have, you know, small.
[00:01:23 – 00:01:29] Brett: And you go to Walmart. Binary rug. I don't have any carpet in my house. Whole house is wood floors.
[00:01:29 – 00:01:32] Jeff: I don't think it's any colder than tile floors or that hardwood floor.
[00:01:32 – 00:01:35] Ameisha: I know sometimes they peel, you know.
[00:01:35 – 00:01:39] Brett: Yeah. You got to stain. You got to have to reseal them every. Every few years.
[00:01:39 – 00:01:40] Jeff: Well, look, let me ask you this.
[00:01:40 – 00:01:44] Ameisha: A person in the bedroom with eight kids. Come on now.
[00:01:44 – 00:01:46] Jeff: Yeah, but imagine if that house had carpet in it.
[00:01:47 – 00:01:47] Ameisha: Yeah.
[00:01:48 – 00:01:49] Jeff: You'd be pulling that out every six years.
[00:01:50 – 00:02:03] Ameisha: But I probably would consider going back, you know, to keep a tenant and get the maximum, you know, do a walk through and if the floors may need to be re shield.
[00:02:03 – 00:02:20] Brett: A lot of builders now are going back to the lvp. Lvt, I should say. I know Mario's doing that. Terry Brown's gone back to it. And I'm going to ask you in a minute because Terry Brown starting 10 new homes. Same homes he's been doing, but he's putting carports on them, maybe garages.
[00:02:21 – 00:02:22] Ameisha: Lord have mercy.
[00:02:22 – 00:02:23] Brett: Yeah, tell me about that. That's gonna be easy.
[00:02:23 – 00:02:48] Ameisha: Renson, man, listen, a girl texted me this morning because I placed her with a guy named. Ended up selling. They ended up selling. Cause it was taking. Cause he was a new. New new client and he was in between of keeping it or selling it. Ended up selling it. So the tenant. I said, well, we have to find you somewhere else. I sent her some more houses and she was like, mm, mm, I want a garage. I don't want none of that. I need to have a garage.
[00:02:48 – 00:02:49] Jeff: Single carport.
[00:02:50 – 00:02:59] Brett: Single carport. But he texted me this morning and said, what do you think about me doing a garage? I said, well, if you can do it affordably and it makes sense, absolutely. I said that's, that's a slam dunk.
[00:02:59 – 00:03:03] Jeff: But a single tenant for sure. Not a double on those lot sizes, right?
[00:03:03 – 00:03:03] Brett: Yeah.
[00:03:04 – 00:03:09] Ameisha: This house had the separate. It was a garage but it wasn't like a tent to the house. Yeah.
[00:03:09 – 00:03:14] Jeff: What is the price of the house with the carport and. Or garage?
[00:03:14 – 00:03:16] Brett: I don't know yet. I haven't figured that out but.
[00:03:16 – 00:03:19] Jeff: So it'll be where you at now? 170 on these.
[00:03:19 – 00:03:21] Brett: Yeah. Probably be in the 180s.
[00:03:21 – 00:03:34] Jeff: So 185. Same neighborhood, Suncrest. Are you going to be able to get an 800. Are you going to be able to get an 1850 dollar voucher on $185,000 house in that neighborhood?
[00:03:34 – 00:03:42] Brett: That was my next question. If you got a house with a, with a carport or a garage, does it changes. Does that change the rent? It changes the rent value.
[00:03:43 – 00:03:44] Ameisha: It does it.
[00:03:44 – 00:03:45] Marissa: No, it doesn't.
[00:03:46 – 00:03:47] Ameisha: What? Not with.
[00:03:47 – 00:03:49] Brett: But it's still going to be based on bedrooms. Bass.
[00:03:49 – 00:03:50] Ameisha: It's all square footage.
[00:03:50 – 00:03:54] Marissa: It's just the garage will be more appealing to, to the tenant.
[00:03:55 – 00:03:58] Jeff: Cost effective though. I mean if you have.
[00:03:58 – 00:04:09] Brett: He's already figured in the garages on his new plans. But then he asked me about. Or the carports. But then he asked me, what do you think about doing the garages? I said if you can do it affordably and it makes sense, then absolutely do it. That's a slam dunk.
[00:04:09 – 00:04:14] Jeff: That's going to add value to the house. But what she's saying is it won't.
[00:04:14 – 00:04:15] Marissa: Give them a higher voucher.
[00:04:16 – 00:04:22] Jeff: I'm not going to be able to rent it for the value of the house. And now I'm putting a tenant and $185,000 on the house.
[00:04:22 – 00:04:27] Brett: So it's a couple hundred bucks less on the MHA rent. But over the next three years you can increase that and get it to.
[00:04:27 – 00:04:32] Jeff: Where it needs to be, you know Some of these investors won't even touch it when that's a 20% right now.
[00:04:32 – 00:04:35] Brett: Not on new construction. They're bending the rules on that part of it.
[00:04:35 – 00:04:55] Jeff: I make sure when I'm set up to get payments. How's the government MHA pay me? Do they just wire the money from them to my account and then you're my tenant placement girl, my property manager. You collect the other portion of the rent that they're owed or do I handle that directly?
[00:04:55 – 00:05:02] Ameisha: Oh, no. If that's the job that you need from me, yes, I could.
[00:05:02 – 00:05:04] Jeff: But the government, literally, they don't mail you a check.
[00:05:04 – 00:05:05] Ameisha: No. Direct deposit.
[00:05:05 – 00:05:17] Jeff: Direct deposit once a month wired to your account. And then whatever arrangements we have, I can pay you to make sure because you kind of do a little property management.
[00:05:18 – 00:05:26] Brett: I keep going back to that. That is the wonderful thing about MHA, now that we've addressed the fact that Section 8 tenants are on a bunch of deadbeats with no jobs.
[00:05:26 – 00:05:27] Jeff: That's what I said sitting in our.
[00:05:27 – 00:05:47] Brett: Front yard all day. There are a lot of single moms and a lot of small families that use assistance because they just don't make enough money to afford the housing here in Memphis. So. Yeah, and if you can get guaranteed money out of it, Even if it's 80% guaranteed and the other 20% is at risk, that's better than having risk with a self pay. Absolutely.
[00:05:47 – 00:06:02] Jeff: I don't know, it would make me as a landlord want to be more inclined. Like, let's say I had a tenant that was paying me twelve hundred dollars and an MHA was giving her a thousand, you know, and she's having a tough couple of months, you know, I mean, you know, I'm going to work. If I'm a land, I'm going to work.
[00:06:03 – 00:06:03] Ameisha: Yeah.
[00:06:04 – 00:06:06] Jeff: You know, I may even get down.
[00:06:06 – 00:06:08] Marissa: To what type of landlord you are. Are you gonna work with them or you.
[00:06:08 – 00:06:09] Jeff: She takes care of the house.
[00:06:09 – 00:06:10] Marissa: Nickel and dime them.
[00:06:10 – 00:06:18] Jeff: She takes care of the house. She's trying. And she's 200 bucks short on her portion of the rent. I mean, my God, why wouldn't you work with the young lady and then.
[00:06:18 – 00:06:19] Marissa: Just do the rent increase?
[00:06:19 – 00:06:44] Ameisha: Well, some people take advantage. Some people take advantage. Now, you know, you have kids that like every month you pay your portion late, you know, like, come on, now we know what's going on every month you calling in maintenance requests and stuff like that. I get it, you know, or now you haven't paid your $175 in three months. You know what I'm saying now we gotta apply some pressure to you.
[00:06:44 – 00:06:45] Jeff: Oh, absolutely.
[00:06:45 – 00:06:46] Ameisha: You know, so.
[00:06:46 – 00:06:56] Brett: All right, let's move on to another section, which I find this interesting. It's. There's some policy changes coming this year. Hotma is the first one. I wonder if Richard wrote that in there just to be a Hotma jackass.
[00:06:56 – 00:06:57] Jeff: Tell us about that.
[00:06:57 – 00:06:58] Brett: Hotma.
[00:06:58 – 00:07:03] Jeff: It says a new $103,200 asset limit for tenants.
[00:07:03 – 00:07:06] Brett: That's why I don't understand that some may lose eligibility.
[00:07:06 – 00:07:09] Jeff: Have you heard of this Hotma Hotma program?
[00:07:10 – 00:07:11] Ameisha: No, no.
[00:07:12 – 00:07:23] Brett: It says $103,200 asset limit for tenants. That's what I'm wondering if they're gonna start capping the value of the property that the tenant can rent.
[00:07:23 – 00:07:25] Ameisha: Well, you know, the rumor is you got two years.
[00:07:26 – 00:07:27] Brett: Okay, that's the rumor of what?
[00:07:28 – 00:07:29] Ameisha: Of being on a program.
[00:07:30 – 00:07:30] Brett: Okay.
[00:07:30 – 00:07:32] Marissa: That's after two years.
[00:07:32 – 00:07:33] Jeff: What program?
[00:07:33 – 00:07:42] Brett: Okay, I get it now. Asset limit. They're probably meaning that that tenant could get up to 103,000, and then they're gonna have to reapply or get.
[00:07:42 – 00:07:43] Ameisha: Yeah, yeah.
[00:07:43 – 00:07:44] Brett: Or get booted off. Or get a job.
[00:07:44 – 00:07:45] Ameisha: Right? Get a job.
[00:07:45 – 00:07:46] Brett: Better job.
[00:07:46 – 00:07:50] Ameisha: Figure out something. Yeah, that's the rumor. You know, everybody say on the Trump.
[00:07:50 – 00:07:55] Jeff: Administration, when you say 103,200. So that voucher could last you for 10 years.
[00:07:56 – 00:08:12] Brett: It might, but I think what. What they're. What she. What Ameisha's getting to is there some changes coming through the Trump administration, but I think they're designed more to get people off of MHA that don't need it, that are using it, that are just milking the system, which, you know, there's plenty of people that do that.
[00:08:12 – 00:08:17] Jeff: What about this Inspire new inspection system that's supposed to start October 1st of this year?
[00:08:17 – 00:08:20] Ameisha: Oh, that'd be amazing. What's that? What that consists of, I have no.
[00:08:20 – 00:08:22] Jeff: Idea, because all it says is Inspire.
[00:08:23 – 00:08:29] Brett: I'm assuming they're gonna start doing MHA inspections every six months instead of annual inspections.
[00:08:29 – 00:09:00] Ameisha: A lot of. See, leases are important, but also the tenants. And you as a landlord, you almost have to, you know, be firm on the expectations of a tenant, because some of these tenants, especially housing authorization agents, they come from apartments, right? So they didn't. They don't know what it takes to maintain a house. You know, they feel like you supposed to change the air filters. They feel like you supposed to change the light.
[00:09:00 – 00:09:09] Brett: So you should. The smart thing to do would have a. Have an addendum to your lease with a List of responsibilities every month that you are required to take care of because, let's face it, an air filter.
[00:09:09 – 00:09:10] Ameisha: And then you have.
[00:09:10 – 00:09:12] Brett: Every three months, it costs $20. It's not like.
[00:09:12 – 00:09:20] Ameisha: But you have to take the time out. They have no idea where the furnace is. You got to show them, too. That's something you. You have to.
[00:09:21 – 00:09:26] Marissa: It's new for them. Everything is new for them. When it comes to, like a house versus an apartment, Right. You don't do nothing in an apartment.
[00:09:27 – 00:09:29] Ameisha: They don't even change the light. They won't even change the light.
[00:09:29 – 00:09:31] Jeff: But that goes yard.
[00:09:31 – 00:09:32] Ameisha: And all of that is maintenance.
[00:09:32 – 00:09:51] Jeff: That goes back to, you know, doing your due diligence, inspecting the property once or twice a year, every quarter, you know, because the average tenant, if they, if they go to plug something in an outlet and that outlet's not working, although they're just going to take it and plug it in on another wall, they're probably not going to pick up the phone and say, hey, my electrical outlet's not working, please.
[00:09:51 – 00:09:51] Ameisha: Yes.
[00:09:51 – 00:09:54] Jeff: But, you know, well, some of them may or may not.
[00:09:55 – 00:09:59] Ameisha: A section 18, it gonna report everything, especially.
[00:09:59 – 00:10:02] Jeff: That's a good thing to an extent, you know.
[00:10:02 – 00:10:03] Marissa: Right.
[00:10:03 – 00:10:18] Jeff: Our biggest deal is these damn food disposals. And I know you voiced your concern with. Every time someone calls me, you know, and it's usually just go flip the breaker or you know what, though, they put something in it and they got it unclogged. And I had to go out there and unclog.
[00:10:18 – 00:10:50] Brett: As I'm reading these rule changes, I'm beginning to realize that I think these are pertaining to the project properties. Probably why you say because. Yeah, because of the amount. Federal underfunding causing voucher attrition, fewer vouchers, higher demand for existing approved units. All right. They're talking about. They're talking about units in the buildings, not single family homes. So I guess we're going to have to wait and see how that, how those rule changes impact the single family. Because I've always thought that MHA treated the single family way different than they treated the projects.
[00:10:50 – 00:10:51] Ameisha: They do.
[00:10:51 – 00:10:52] Jeff: Oh, yeah, they do.
[00:10:52 – 00:10:59] Ameisha: Yeah, they do, definitely. And that's why. That's why they say enforce your lease. That's why whatever is going on, you know, with the.
[00:10:59 – 00:11:09] Brett: Because if you're under a project voucher in a building as an owner, you've got a lease. But I'm sure there's more HUD rules and section 8 rules in place for that building than there would be for a single family home.
[00:11:09 – 00:11:09] Ameisha: Correct?
[00:11:09 – 00:11:10] Brett: Okay, yeah, that makes sense.
[00:11:10 – 00:11:18] Jeff: Oh, yeah, because you've got sprinkler, fire, sprinkler systems, and emergency exit because you.
[00:11:18 – 00:11:19] Marissa: Want to do it.
[00:11:19 – 00:11:22] Ameisha: Elevators, you don't have to provide appliances.
[00:11:22 – 00:11:23] Brett: Oh, yeah, true.
[00:11:23 – 00:11:24] Ameisha: You know what I'm saying?
[00:11:24 – 00:11:56] Brett: Yeah. Well, let's go through some numbers here. Vacancy rates, section 8 properties are 4% versus the market rates. 8%. Almost double vacancy rates. So if you, if you rent through mha, your vacancy rates will be lower, which only does what? Increases your cash flow and your ability to pay your expenses. Average tenant duration, three to five years. One year market rate. So every one year, that means every year you can submit to MHA or Section 8 to get an increase in your rent. And what is the average increase, Ameisha? Is it $50 a year, $100 a year, or are they basing just strictly on market?
[00:11:57 – 00:11:58] Ameisha: It just depends.
[00:11:58 – 00:12:03] Brett: What's the average? You see 50 a year, maybe 100. Really? Okay.
[00:12:03 – 00:12:27] Ameisha: I mean, it depends because, say, for instance, you have had some other property. So if you got 50 properties on Section 8, well, 20 of them been your tenant since you became a landlord 10 years ago. And you know, they just been riding away. Well, you like? Okay, let me see, Let me, Let me go see if I can get an increase and bring those $900 vouchers up to 1500. Boom.
[00:12:27 – 00:12:29] Brett: A lot of times they'll do it because they've been there a long time.
[00:12:29 – 00:12:29] Jeff: Really?
[00:12:29 – 00:12:31] Brett: Yeah, I got you the area.
[00:12:31 – 00:12:32] Ameisha: The area has developed.
[00:12:32 – 00:12:35] Jeff: So let's talk about our new houses. And I've.
[00:12:35 – 00:12:39] Brett: Hold on, let me get through the rest of these numbers here and then we'll go into the new construction.
[00:12:40 – 00:12:41] Jeff: No, it was a rent question.
[00:12:41 – 00:12:42] Brett: Oh, yeah, okay.
[00:12:43 – 00:12:55] Jeff: A rent increase question. I've got a tenant in the house for $1,000 a month. I go up next year to 1,100. Who pays the difference? The tenant? Or do we go back to MHA.
[00:12:55 – 00:12:58] Ameisha: And ask them to pay MHA to pay it?
[00:12:58 – 00:13:00] Marissa: Okay, you get the increase.
[00:13:00 – 00:13:04] Brett: And as long as you're not jumping way out of whack on the increase.
[00:13:05 – 00:13:38] Jeff: So the increase comes through mha, but they have to approve my request. And then like you said a minute ago, in a rare case where someone's been in that house for 10 years and the neighborhood's developed around it real good, you could actually go from 900 to 12, 1300amonth and possibly get approved through MHA. Yeah, yeah, that's what you were telling me a few weeks ago. And you're anticipating some of these $1,600, rents to go up 200, $250 next year.
[00:13:38 – 00:13:43] Ameisha: Right, Because I mean, that's what it was based on. Like the four bedrooms should have been supposed to be 1800.
[00:13:44 – 00:13:56] Jeff: Right, okay, but why are, why are they only producing 16, 1650 right now? 1550, 1550, right. Because market, that's just what the market bears right now.
[00:13:56 – 00:14:04] Ameisha: There's just those tenants doesn't have income. The family isn't, you know, and it.
[00:14:04 – 00:14:27] Jeff: Just, is it up to me if I put an MHA tenant in there and she's paying zero portion of the rent because she doesn't have a job, she gets a job, she's supposed to report that, but they don't always do. Is that my responsibility as a landlord to say, hey, I noticed you got a new BMW in your driveway. Did you get a new job? Yeah, I got a new job.
[00:14:27 – 00:14:28] Brett: That's more common than you think.
[00:14:29 – 00:14:42] Jeff: Now I call MHA back and say, hey, girlfriend's making 750. Is that my responsibility as a landlord or should I just keep my mouth shut, Keep getting the free money.
[00:14:42 – 00:14:43] Marissa: Just trying to make sure.
[00:14:43 – 00:14:58] Ameisha: Okay, so I mean, listen, it depends on the house that sells. So if that tenant was in a new construction. Right. Then maybe, however, the rent doesn't change, the tenant just starts paying.
[00:14:59 – 00:15:03] Marissa: Let me tell you, I can answer that question legally.
[00:15:03 – 00:15:06] Brett: Legally, you're the landlord. You have a lease with that tenant for a set amount of rent.
[00:15:06 – 00:15:07] Ameisha: Exactly.
[00:15:07 – 00:15:19] Brett: Her income situation between her and MHA is between her and mha, it really has no liability on your part. So if she fails to produce it, the only downside is she could lose her voucher. And all of a sudden you got a tenant that's not paying rent.
[00:15:19 – 00:15:19] Jeff: Right.
[00:15:19 – 00:15:20] Brett: So you'd want to.
[00:15:21 – 00:15:25] Jeff: Some of them wouldn't report it. They're not going to have to pay a bigger portion of the rent.
[00:15:25 – 00:15:31] Brett: If you, you may want to take time every few months, five minute phone call to the tenant and just check in with them.
[00:15:32 – 00:15:42] Ameisha: The critical time would be like before, 60 days, before it's time to renew the lease. Because that is when you can get an increase. That is what?
[00:15:42 – 00:15:46] Brett: That's call and ask some questions. Say, have you started working? Are you making more money?
[00:15:46 – 00:15:47] Jeff: But I mean, Marissa knows.
[00:15:47 – 00:15:48] Brett: Oh, you are. Have you reported that?
[00:15:48 – 00:15:55] Jeff: You know what I'm talking about. Girl hadn't paid her $400 portion of the rent in three months and I've been cutting her some slack. And I drive by.
[00:15:55 – 00:15:56] Marissa: That's different.
[00:15:56 – 00:16:01] Jeff: Girlfriend's got a brand new bm, you out in the driveway. Hey, sweetheart, I need my rent money. My portion of the rent money.
[00:16:01 – 00:16:03] Ameisha: Right, right, right. She get fine.
[00:16:03 – 00:16:10] Marissa: Well, you can enforce the. Yeah, you can enforce your lease, right? I mean your lease. And then MHA only pays a certain amount. It's her duty to pay her amount.
[00:16:10 – 00:16:12] Jeff: I understand. I just wanted to understand how all that works.
[00:16:12 – 00:16:17] Marissa: Jeff said he wants the neighborhood watch to give him a call when the 10 is rolling up in 2027.
[00:16:17 – 00:16:21] Jeff: BMW girlfriend got a nicer ride than I do?
[00:16:22 – 00:16:23] Ameisha: Yes. She get fouled on?
[00:16:24 – 00:16:26] Jeff: She'll get filed out eventually it'll catch up with her.
[00:16:26 – 00:16:31] Ameisha: No, no. You gonna. You can file an eviction on you.
[00:16:31 – 00:16:32] Jeff: Oh, okay.
[00:16:32 – 00:16:41] Ameisha: You can file for her rent portion and you can let MHA know. Hey, she's not paying now. Then you apply pressure and you file eviction.
[00:16:41 – 00:16:42] Brett: Then she'll find the money.
[00:16:43 – 00:16:43] Jeff: Oh, yeah.
[00:16:43 – 00:16:46] Ameisha: She'll either find the money or sell the car.
[00:16:47 – 00:16:52] Brett: What'll happen is she'll lose. If she doesn't, she'll lose her voucher, lose her house, and then have to lose her car. Cause she won't be able to pay for it.
[00:16:52 – 00:16:53] Ameisha: Exactly.
[00:16:54 – 00:17:23] Brett: The profitability, research facts. We Already covered section 8 average is 4%. Self pay is 8%. Average tenant duration 3 to 5 years. One year market rate, meaning every. At the end of each year, you could apply for an increase in rent covered by MHA marketing costs. 0. With exception of if you hire Misha or you hire an MHA placement person or a section. A placement person. Y' all typically charge a fee to find that tenant. Unless you're going to manage the property and make money long term off of it, then you probably give them a break or something like that.
[00:17:23 – 00:17:24] Ameisha: I don't.
[00:17:26 – 00:17:27] Marissa: I just cut no slack.
[00:17:27 – 00:17:40] Ameisha: I can't. I mean, the retainer, it's just. It's just saying that, you know, we are in this thing, you know, we're gonna work with you and then I cause you slack maybe on the next one or so. But then it is competitive market here in Memphis right now.
[00:17:40 – 00:17:41] Brett: It is everybody.
[00:17:41 – 00:17:43] Marissa: It really makes. You have to put that work in.
[00:17:43 – 00:18:01] Ameisha: You gotta have to. You have to. You have to be at the tenants beck and call at this moment in the field and Memphis, you know, it is. Somebody called it the wild, wild West. It can be the wild wow West. You build those new construction and you put those condensers or you leave. You know what I'm saying?
[00:18:01 – 00:18:02] Brett: We don't.
[00:18:02 – 00:18:02] Marissa: It might be gone.
[00:18:03 – 00:18:04] Ameisha: They're gonna be gone.
[00:18:05 – 00:18:10] Brett: Mario's the only builder I've ever Seen put those condensers down and they never walk away. I don't know how that happens, but it just.
[00:18:10 – 00:18:11] Jeff: Does he cage them?
[00:18:12 – 00:18:14] Brett: Yeah, but it mean nothing fancy. It just.
[00:18:15 – 00:18:15] Ameisha: But I think people.
[00:18:15 – 00:18:16] Jeff: He's been lucky.
[00:18:16 – 00:18:17] Ameisha: Stay there.
[00:18:17 – 00:18:20] Brett: Oh, well, that may be his new constructions. Yeah. On this.
[00:18:20 – 00:18:20] Jeff: Yeah.
[00:18:20 – 00:18:27] Ameisha: No, he had people in there. If you got a vacancy, you're going to have a squatter or some missing appliances or a missing hot water tank or a missing.
[00:18:28 – 00:18:32] Jeff: We never drop that stuff until your tenant moves in.
[00:18:32 – 00:18:47] Brett: It's starting to clean up. Thank goodness. All right, let's keep moving along with this. Eviction rates lower due to program accountability, holding tenants accountable. So the eviction rates are a lot lower nationally and I would assume here in Memphis compared to self pay evictions that take place.
[00:18:47 – 00:18:48] Ameisha: Oh, yeah. Oh.
[00:18:48 – 00:19:46] Brett: Rent reliability 70 to 100% government guaranteed. I don't know how you could find a better investment than that. That's like going to your stockbroker Jeff and giving him a hundred grand and him giving you a letter back saying, I guarantee you you will not lose a dime or your stock portfolio won't drop a dime less 70% of its current value. That's a pretty damn good guarantee. So I don't know why any investor would want to self pay other than the fact that they've been burned by Section 8 in the past. The old Section 8. Okay. Inspections and compliance facts, annual inspections, initial approval plus initial approval inspection, which Ameisha takes care of that for you when she places a tenant. Focus areas, health, safety, habitability. So I'm assuming that MHA takes part of that into consideration. Oh, yeah. You know, they're not going to put you in a barn built down, you know, on the levee by the Mississippi River. Right. It's got to be a habitable home on.
[00:19:46 – 00:19:48] Ameisha: On lead, you know.
[00:19:48 – 00:19:48] Brett: Yeah.
[00:19:48 – 00:19:50] Ameisha: Things that make a person sick.
[00:19:51 – 00:20:08] Brett: Correct. Common issues. They always ask GFCI outlets in all of the areas that have water running, smoke detectors, carbon monoxide, Carbon monoxide detectors and minor maintenance. That's their common issues that they, they always see during inspection. Right?
[00:20:08 – 00:20:09] Ameisha: Yeah.
[00:20:09 – 00:20:19] Brett: That you've got to go back and redo. If you don't, don't take care of that stuff. MHA inspects trip hazards and stuff. Yeah. They'll deny your approval and then you'll have to redo that stuff and they'll have to come back.
[00:20:20 – 00:20:20] Ameisha: Right.
[00:20:20 – 00:20:34] Brett: Reinspection. It's free if it's failed the first time and there's a fee for subsequent failures. Meaning, I guess if you fail, do the work, they come back and you fail again. MHA could charge you a fee. Okay, makes sense.
[00:20:34 – 00:20:53] Ameisha: Well, that's why it's good to hire me, because it's like, and I'm going to say this, the inspectors, they love to see the new construction. They pass first time. You know, like if I. And when I do a walkthrough, I try to guarantee, make sure you don't have trip hazards or safety hazards and that.
[00:20:53 – 00:20:55] Marissa: Like the doors on the windows.
[00:20:55 – 00:20:57] Ameisha: Yep. Locks. Certain types of locks.
[00:20:57 – 00:21:05] Jeff: Well, they might just put a handrail up on that side entrance over there. Denver. But that wasn't no big deal. Builder was glad to do it.
[00:21:06 – 00:21:09] Brett: When they, when they mortgage a home, they require the same stuff.
[00:21:10 – 00:21:10] Marissa: Yeah.
[00:21:10 – 00:22:34] Brett: Let's talk about how you get started. I mean, obviously I want to talk for one second about Memphis and the new construction and our rehabs, all of them are rented. MHA and our investors that bought those homes and have MHA tenants in place are seeing the benefit of that guaranteed income. And none of them are having any major oh shit moments with these MHA tenants. So I'm seeing a lot of good success through it. Now, I still have a few investors that bought homes that we haven't been able to rent. One of them, I sent to you, Amicia. Hopefully you can help find us a tenant. But overall, the MHA program has been working really well here and it's, it's helped investors have a little more security in their investment. But let's talk about, as an investor, how you get getting started. And this will be our last segment, and then we're going to get the hell out of here. This is the uphill climb I was telling everybody about earlier. You can submit an application as a landlord to MHA directly. Timeline for approval can be up to 30, 45, possibly even 60 days. I know that Daniel Tabish had a 60 day wait for approval. Property must pass initial inspection. Documentation you'll need to provide will be a signed lease agreement W9 and property photos. Now, with that, once you send that to mha, Ameisha, you then wait for what? The HAP contract, which is where MHA signs off saying, okay, we agree to this lease and here's the amount we agree to pay. And that is a contract between the landlord and mha, Correct. The lease is between the landlord and the tenant. The HAP contract. HAP is between MHA and the landlord guaranteeing the payments.
[00:22:34 – 00:22:35] Ameisha: Correct?
[00:22:35 – 00:22:37] Brett: Correct. Okay. All right, well, y' all got any more questions for me?
[00:22:38 – 00:22:42] Jeff: You just have a standardized lease that you use for your.
[00:22:44 – 00:22:44] Ameisha: Yeah, I do.
[00:22:44 – 00:22:45] Jeff: Owners.
[00:22:45 – 00:22:51] Ameisha: Uh huh. And it has, you know, everything for the tenant to be responsible for.
[00:22:51 – 00:22:54] Brett: So do you put change out the air filters and blah, blah, blah.
[00:22:54 – 00:22:55] Ameisha: I do not.
[00:22:55 – 00:22:58] Brett: You do not. You should know. You just brought it up. That's a great idea.
[00:22:58 – 00:23:00] Ameisha: They have to, they have to change those airfields.
[00:23:00 – 00:23:10] Brett: No, but what you could do is the landlord could just go buy tenants filters and you can drop them off at the house, put them in a closet and say, listen, every 60 days pull this out, put that in our property management company.
[00:23:10 – 00:23:13] Marissa: They'll send us an email. Hey, it's time to change your filter.
[00:23:13 – 00:23:16] Brett: Perfect. Yeah. That's the best way to kill a condenser.
[00:23:16 – 00:23:17] Ameisha: Correct.
[00:23:17 – 00:23:52] Brett: All right, well, if you don't have any more questions for Ameisha, you can reach out to us at 901-692-7401 or mymenphasinvestmentproperties.com Please send us a message if there's anything you want us to dig up and talk about. Obviously it'll pertain a lot to the Memphis market, but if you're interested in Memphis market, reach out to us. Also, hit that subscribe button on the podcast. We'd love to have you as a subscriber. Doesn't cost you anything, but you'll get notifications when we release new episodes and we appreciate you listening. Have a good day.
[00:23:52 – 00:23:59] Production: For more common sense real estate tips, listen and subscribe at 5oClockSomewherepodcast.com. The Five O' Clock Somewhere Real estate Investor podcast is a Sound Ideas Greoup production.