Have a Look at Tom Cruz’s Timeless Mantras for the Best Section 8 Property Management
Investments today go far beyond conventional assets in the market. While stocks and mutual funds are still frequently included in portfolios, there are numerous other options that can also pay off in the long run. One such option is real estate investment, a timeless strategy to accumulate funds for your retirement. However, real estate investment follows no roadmap, and the path to wealth can sometimes be winding. The best way to ensure your success is to learn from experienced real estate investors who truly know the market inside out. One such investor is Tom Cruz, a real estate maestro, more popular on social media as the “Section 8 Guy” at the handle @tcruznc.
Originally from Rio de Janeiro in Brazil, Tom Cruz started his investment journey by wholesaling distressed properties throughout Wilmington, North Carolina. After graduating from UNCW, he moved on to buying rental units from the income he generated through his marketing side hustle. It was merely a coincidence that led Tom to learn about Section 8 properties. Upon closing a deal for a $55,000 rental SFH Unit, he found it bizarre that the tenant was paying $1,350 a month for a three-bedroom, one-bathroom unit that was probably built in the 1920s. This was when he discovered that Section 8 is essentially a federal program that pays rent for low-income or underprivileged people.
From that point, Tom narrowed his interest to solely buying Section 8 properties. Later on, he proceeded to scale his property management business by working with other investors as partners. Today, Tom and his holding company are managing hundreds of rental units across four different states and have a passive income of over half a million dollars! From podcasts and Instagram stories to YouTube videos and full-fledged courses, Cruz has never shied away from disclosing his mantra that led him to become a property mogul.
Over the years, Tom’s experience and research have helped him pinpoint some no-bs suggestions for those interested in Section 8 investment. He took it upon himself to dispel some myths and share his valuable mantras for success to elaborate the Section 8 portfolio.
Make up Your Mind:
Before stepping into the Section 8 arena, one must understand the scope of this field. Tom (@tcruznc) teaches that for desirable properties in good neighborhoods with low average vacancy levels, Section 8 may not be the best choice. “In this case, you can keep your property occupied with tenants who pay higher rents without the risks, hassles, and bureaucracy of the Section 8 program,” said Tom.
The biggest challenge is inspections. The Section 8 Guy shared, “The only thing that’s different than a standard rental is you don’t have Section 8; they come and inspect every year, and you have to make sure you stay on top of that because if you fail, the inspections and you fail it again on the RE inspection, they will stop paying you. Um, that’s really the only downside to it.”
He continued, “To steer clear of such experiences, you can screen tenants and make sure they are decent people with good credit scores and no criminal backgrounds, no evictions, and good level references. However, it doesn’t really matter what program they’re on,” added Tom.
Remove Non-Essential Property:
According to Tom Cruz, the HUD doesn’t provide a security deposit for Section 8 properties. “If you are someone who wants to avoid problems and grow your portfolio, you need to cut off many unnecessary things from the property. Hence, it’s best to limit the number of things in each unit that can become a problem,” revealed Tom. “This includes furniture, appliances, screen doors, ceiling fans, lights, and garbage disposals. These are not required by HUD and will not affect the rents you receive, but will increase your expenses,” he elaborated.
Narrow Your Research Right:
Tom’s mantra to finding Section 8 paying in your area is quite simple. He emphasizes conducting thorough research. Elaborating further, he shared, “All you have to do is to simply Google and search F M R. You’ll see the first result is going to be the HUD website. They’ll have a directory by county and zip code plug in the county or zip code that you want to look at. And it will tell you the 1, 2, 3, 4, and 5 bedroom rate that Section 8 will pay you every month in your county.” He went on to add, “It varies completely by bedroom count and location. You’re going to be shocked because the majority of those three bedrooms you’re going to find will be as low as $1300 and as high as $2800 to $3,000 per month if you’re in California.”
Tom Cruz’s incredible research and keen insight have proved that Section 8 property holding is a COVID-proof area for investments. “The best way to hedge your risk is by getting into real estate. Section 8 low-income housing is the real estate vehicle I chose because it is predictable, guaranteed, and recession/pandemic-proof,” Tom concluded. To learn more from Tom Cruz, you can find him on nearly all social media platforms under the handle @tcruznc.