Why Two GPs Are Going All-In on Section 8 Housing

From Freight Lines to Voucher Lines

Mitchell and Brennor didn’t start in affordable housing. Mitchell spent years working on institutional acquisitions and analyzing deals across 10 states. Brennor came from the trucking industry, where he scaled a logistics business, built a high-conviction investor base, and deployed capital into cash-flowing assets.

But they both noticed the same thing: small multifamily properties with Section 8 tenants consistently outperformed expectations. Rents were consistent, tenant turnover was lower, and cap rates were significantly higher than traditional workforce housing.

So they teamed up.

Their new fund is targeting duplexes and fourplexes in places like Cleveland, Detroit, and Milwaukee. These markets offer strong rent-to-price ratios, reliable voucher programs, and limited institutional competition. They’re projecting 20 to 25 percent annual returns and focusing on cash flow from day one.

This isn’t a tax credit fund or a complicated public-private partnership. It’s clean, simple, cash-flowing real estate built to scale with LPs who want yield and impact in the same deal..

The Play: Turnkey Duplexes with Section 8 Renters

Forget heavy value-adds or major rehabs. These guys are buying already renovated small multifamily buildings, often from local flippers, and plugging in long-term tenants with government-backed rent.

Here’s their strategy:

• Buy 1 to 4 unit properties (mostly duplexes) in Cleveland and Detroit

• Acquire from flippers with new furnaces, water heaters, and recent upgrades

• Rent to Section 8 tenants who pay 30% of income while HUD covers the rest

• Target 20%+ cash-on-cash return on every property

Why This Works

1. Government-backed rent
Section 8 tenants pay about 30% of income, and the government pays the rest. That means checks hit your account on time with no chasing rent.

2. Tenant retention is strong
Most GPs worry about turnover. Section 8 tenants stay for 7 years on average and often longer because voucher waitlists are so long they don’t want to lose the benefit.

3. Strong yield with little competition
Cash-on-cash returns in the mid-20s. No institutions in sight. Just a handful of out-of-state investors buying up turnkey units while everyone else fights over 100-unit deals.

The Risks (and How He Manages Them)

Slower lease-up timelines:
It can take 30 to 60 days to place a Section 8 tenant. They buy properties with tenants in place or bridge with market tenants while waiting for voucher tenants.

Red tape with housing authorities:
They work closely with specific cities like Cleveland and Detroit that have clear processes and responsive housing offices.

Deferred maintenance:
To avoid CapEx surprises, they only buy from experienced flippers who have already invested in major systems like furnaces, plumbing, and electrical.

What You Can Learn (and Steal)

1. Section 8 is a cash flow machine if done right
Brennor’s portfolio averages 20 to 25% cash-on-cash returns. That’s without speculative rent bumps or aggressive exit assumptions.

2. Don’t underestimate small multis
One to four unit properties fly under the radar, qualify for residential loans, and provide optionality on exit to homeowners or investors.

3. Build trust through education
Brennor raised over $12M from his sales network without a formal background in finance — just transparency, a good deal, and obsessively educating LPs.

Listen to the full episode

🎙 Groundbreakers with Brennor Downs and Mitchell Rice

In it, we cover:

• Why Section 8 housing offers 7-year tenant retention and government-backed rents

• How Brennor raised over $12M from his network with no prior track record

• Why Mitchell is buying duplexes in Cleveland at 11 to 13% cap rates with 20%+ cash-on-cash

• The biggest myths around Section 8 and how to avoid bad tenants

• The exact playbook they’re using to scale their new fund