How to Earn 14% ROI With Section 8 Condos and Off-Market HOA Deals

Why This Episode Matters

What if you could buy a condo near the beach, rent it to a Housing Choice Voucher (Section 8) tenant, and clear a 14% cash-on-cash return—all while changing the life of a family in need?

That’s exactly what Michael Caggiano, long-time Section 8 investor and founder of Section 8 Secrets, has done. In this episode of the Affordable Housing & Real Estate Investing Podcast by Kent Fai He, Michael shares how he built a repeatable model using condos and HOAs to secure off-market deals, screen resilient tenants, and lock in returns that beat most multifamily plays.

If you’re an investor, developer, or advocate serious about creating both profit and impact, Michael’s framework is one you can use immediately.

Kent Fai He, affordable housing developer and host of the #1 podcast on affordable housing investments, leads this conversation and uncovers tactical lessons that every investor should hear.

How Do You Find Off-Market Condo Deals Through HOAs?

One of Michael’s most powerful strategies is leveraging homeowners associations (HOAs) to bypass the MLS entirely.

Instead of competing with every other investor, he reaches out directly to HOA boards and community message boards, letting them know he’s a ready buyer. Over time, this reputation led to four off-market deals, including his most recent condo purchase in Old Orchard Beach, Maine.

By building trust and proving to be an easy, respectful buyer, sellers approached him directly. In one case, the seller even made repairs—like installing GFCI outlets and caulking sinks—before closing simply because the experience felt smooth and fair.

What Are the Real Returns From Section 8 Condo Investing?

Michael’s most recent case study shows the math clearly:

• Purchase Price: $197,500 (with $5,500 in seller concessions)
  
  

• Rehab Costs: Just $206 (safety upgrades and minor fixes)
  
  

• Financing: 25% down, 30-year fixed loan at 6.99%
  
  

• Rent: $2,020 per month, paid directly by the Housing Authority
  
  

• HOA Fee: $200 per month
  
  

• Net Cash Flow: $534 per month
  
  

That equates to a 14% cash-on-cash return, and when factoring in principal paydown and appreciation, his total projected first-year return is 24.2%.

How Do You Screen Section 8 Tenants Effectively?

Michael’s application process is systemized after years of refining. He:

• Works with government housing agencies and nonprofits like Seeds of Home and Through These Doors.
  
  

• Starts outreach before closing on a property to save weeks of vacancy.
  
  

• Uses a scoring system that looks beyond credit scores, recognizing that Section 8 tenants often show resilience and long-term stability.
  
  

• Meets tenants in person or via FaceTime when possible, sometimes asking to see their current home as a proxy for how they’ll treat the new unit.
  
  

One of his tenants moved in just nine days after closing, reducing holding costs and boosting returns.

What Financing Strategy Works Best for Condo Section 8 Deals?

Michael recommends putting 25% down on conventional loans. Why?

• It unlocks better rates than 20% down.
  
  

• Fannie Mae and Freddie Mac waive certain restrictions, like rent-to-owner ratios, when you hit the 25% threshold.
  
  

• No reserve requirements across all properties, freeing up capital for other deals.
  
  

He emphasizes using your W-2 income to qualify. Instead of quitting your job to go “all in” on real estate, you can leverage your employment to secure favorable financing terms that many investors can’t access.

What Are Michael Caggiano’s Biggest Lessons for New Investors?

• Leverage relationships: Great deals come from reputation, not just spreadsheets.
  
  

• Focus on repeatable singles and doubles: You don’t need to swing for home runs to build long-term wealth.
  
  

• Execution matters: Fast turnovers (like 9-day lease-ups) turn average deals into great ones.
  
  

• Your W-2 job is an asset: It can fund and qualify your first wave of investments.
  
  

Best Quotes From Michael Caggiano

“You unlock that door for them and you’re unlocking a new trajectory of life.”

“My model avoids the big-ticket costs—no roofs, no siding, no crawl spaces. That’s why my maintenance stays under 5% of rents.”

“It’s not about being a slumlord. You’re helping families. If anything, you’re a savior in their eyes.”

“Don’t quit your W-2 job too early. Your income is your offense. Use it to secure better financing.”

FAQs From This Episode

Q: How can investors find off-market deals in condos?
A: Network directly with HOA boards and community message boards. Build trust as a buyer and word-of-mouth referrals will lead to sellers contacting you first.

Q: What’s the average cash flow on a Section 8 condo?
A: In Michael’s case, about $534 per month on a $198K all-in deal, equating to a 14% annual return.

Q: How quickly can Section 8 units be filled?
A: With agency relationships and pre-closing outreach, tenants can often move in within 1–2 weeks after closing.

Q: Do Section 8 tenants require lower standards?
A: No. The inspection standards can actually be stricter than private rentals, and many tenants treat their homes with pride and stability.

Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments.

By sharing stories like Michael Caggiano’s, Kent ensures investors, developers, and advocates have the tools to scale both their portfolios and their impact.

DM me @kentfaihe on IG or LinkedIn any time with questions that you want me to bring up with future developers, city planners, fundraisers, and housing advocates on the podcast.