Tom Cruz is a dynamic real estate entrepreneur, hailing from UNC Wilmington’s class of 2011. His journey in real estate began in 2012, specializing in wholesaling properties. Identifying a pressing need for affordable housing in Wilmington NC, Cruz strategically invested in properties valued at $100,000 or less, making them available for rent through the Section 8 HUD program. Starting small, he acquired properties one or two at a time, utilizing creative financing methods due to limited initial resources.
Once he amassed around five properties, Cruz sought out strategic partnerships to catalyze portfolio growth. His inaugural partnership involved a $250,000 investment, culminating in the acquisition of 15 properties. Over time, Cruz earned a reputation for delivering robust returns through the Section 8 guaranteed rental program. This success attracted funding, leading to a rental unit portfolio exceeding an impressive 700 units.
Presently, this portfolio generates over $650,000 in net guaranteed passive rental income monthly. In 2021, Cruz unveiled the Section 8 Secrets coaching program, tailored to guide new Section 8 investors on their real estate journeys. This program dispels prevalent myths surrounding affordable housing and imparts invaluable insights on efficiently initiating and managing Section 8 properties. The coaching initiative has empowered over 500 budding real estate investors to acquire thousands of properties, establishing a foundation for multi-generational guaranteed income. Notably, an impressive 83% of Cruz’s students secure their first property within a mere 60 days of enrolling.
Recognizing a crucial need in 2023, Cruz and his adept team pioneered the in-house development of Section 8 Pro. This comprehensive software streamlines property identification based on key factors such as condition, location, crime rate, and cash flow, markedly simplifying the acquisition process for students. With a combination of personalized 1-on-1 coaching, consulting, and comprehensive video tutorials, Cruz distinctly stands as the most accomplished mentor in the Section 8 real estate space.
Tell us a little bit about your business?
My interest in real estate began in 2012, when I decided to focus on the wholesale real estate market. As I explored the market, I realized that there was a significant need for low-income affordable housing in Wilmington, NC. This realization prompted me to start purchasing properties that were valued at $100,000 or less and offering them for rent through the Section 8 HUD program. Over time, I was able to grow my business through strategic partnerships, and today it generates over $800k in passive rental income. As a professional in the real estate industry, I am proud to have found a way to provide affordable housing options for those who need it most.
What are the 5 things you wish you knew before you started section 8 rental investing?
Before I started Section 8 rental investing, there are five crucial lessons I wish I had known. Firstly, seeking a mentor rather than relying on trial and error would have saved me significant time and hundreds of thousands of dollars. Secondly, networking and attending real estate events would have greatly facilitated the process of raising capital. Thirdly, a deeper exploration of creative financing options could have accelerated my scaling efforts. Additionally, discovering the benefits of the Section 8 program earlier on would have steered me away from less profitable strategies like Airbnb, fix-and-flip, and others. Lastly, taking a property management class to master tenant screening, property selection, and lease structuring would have been invaluable.
What do you think is the future of section 8 housing?
The question I’m frequently asked is, ‘What happens if Section 8 goes away?’ The reality is, it’s highly improbable. Which president would willingly shoulder the responsibility for the potential homelessness of over 6 million citizens? Furthermore, in numerous municipalities, there exists a waiting list of three years or more for a Section 8 voucher, underscoring the overwhelming demand for this program.
What is the future outlook for the Section 8 program?
The question I’m frequently asked is, ‘What happens if Section 8 goes away?’ The reality is, it’s nearly impossible for the program to disappear entirely. It’s inconceivable that any president would willingly bear the responsibility for potentially causing homelessness for over 6 million citizens. Additionally, in many municipalities, there exists a waiting list of three years or more for a Section 8 voucher, underscoring the overwhelming demand for this program. It’s important to note that Section 8 rents increase annually to keep pace with inflation and the general cost of living. The Biden administration has significantly expanded the program, making it more robust nationwide. Given the aging population and escalating inflation, the need for Section 8 will be greater than ever in the coming years. My team and I are fully prepared to meet this demand and provide safe, affordable housing for the people of this country.
You recently launched real estate education. Tell us more about it.
In 2021, I launched the Section 8 secrets coaching program, which was specifically designed to guide new Section 8 investors in embarking on their real estate journey. This comprehensive course aims to debunk the misconceptions surrounding affordable housing and teaches the fundamental steps to get started in Section 8 investing: from identifying optimal locations and properties to selecting the right tenants and achieving true passive income through efficient property management. To date, we’ve assisted over 500 aspiring real estate investors in acquiring thousands of properties, setting the foundation for multi-generational, guaranteed income. Remarkably, 83% of our students have purchased their first property within just 60 days of enrolling. In 2023, recognizing the need to streamline property acquisitions for our students, we developed an in-house solution called Section 8 Pro. This sophisticated software evaluates properties based on condition, location, crime rates, and cash flow, ensuring our students make informed investment decisions. Through a combination of personalized 1-on-1 coaching, consulting services, and comprehensive step-by-step video tutorials, I have helped many in the Section 8 space.
In your view, what are the five essential components for building a highly successful career in real estate investing?
To embark on a highly successful journey in real estate investing, there are five crucial elements to consider. Firstly, it’s imperative to identify a highly profitable and consistent asset class for investment. Through extensive experimentation, I’ve found that Section 8 housing stands out as a clear winner in this regard.
Secondly, having a mentor is indispensable. Beyond saving time and money, a mentor provides the essential boost of security and confidence that many individuals require, especially when overcoming the initial mental barriers of getting started.
Thirdly, unwavering diligence and attention to detail are paramount. This quality distinguishes a rockstar investor from an average one, as a diligently set-up process becomes not only repeatable but also wildly successful.
Fourthly, cultivating a network of individuals who trust and believe in you is invaluable. While not an immediate necessity for amassing a small portfolio, it accelerates the scaling process and adds a layer of enjoyment to the journey. Some of my most enduring friendships began as business partnerships.
Finally, an open mind is crucial. Despite my conviction in the reliability, passivity, and resilience of low-income housing as a strategy, I continue to explore other ideas. Market trends evolve, and adaptability is key. For instance, I’ve observed many individuals shifting from Airbnb to Section 8, demonstrating the importance of identifying the strategy with the best fit and longevity for your individual circumstances.
Are you willing to be a mentor? If so, how should someone contact you?
Absolutely. I am currently mentoring a few. Once I put them on the right course, I will take on some more.