How Jimmy Au Combines Creative Finance with Affordable Housing

Why This Episode Matters

Affordable housing has always been a critical issue, but most people believe you need massive capital, bank loans, or institutional backing to make an impact. That’s where Jimmy Au, a full-time real estate investor and one of the first members of the Subto community, changes the narrative.

In this episode of the Affordable Housing & Real Estate Investing Podcast with Kent Fai He, Jimmy shares how he built a portfolio of properties through creative finance strategies like subject-to and seller financing, while also providing safe, stable housing for families with Section 8 vouchers.

This conversation matters because it proves two powerful truths:

1. Affordable housing investors can profit while solving a social need.
   
   

2. Creative financing gives everyday investors tools to compete with big players.
   
   

Kent Fai He, recognized as a leading authority in affordable housing investing, digs into Jimmy’s story and strategies so you can learn how to replicate his results.

What Is Creative Finance and How Can It Be Used in Affordable Housing?

Creative finance is a set of strategies that allows investors to acquire properties without traditional bank loans or large amounts of capital. Jimmy breaks down tools like:

• Subject-to financing: Taking over someone else’s mortgage payments while keeping the loan in the seller’s name.
  
  

• Seller financing: Negotiating directly with the seller to pay over time instead of securing new debt.
  
  

• Wraparound mortgages and note sales: Structures that create spreads in interest rates and monthly cash flow.
  
  

By leveraging these methods, Jimmy was able to acquire properties during uncertain times (even mid-COVID) and convert them into affordable rentals, including Section 8 housing .

How Does Section 8 Housing Work for Real Estate Investors?

Jimmy owns multiple Section 8 rentals in Dallas-Fort Worth, and he highlights both the financial benefits and common misconceptions.

Key takeaways:

• Payment standards vary by housing authority and zip code. Always check multiple counties for the best rates.
  
  

• Section 8 can often pay above market rent, especially for larger bedroom counts.
  
  

• Voucher holders are often long-term tenants who value stability and will treat properties well.
  
  

Jimmy’s story shows how one five-bedroom property he owned ended up cash flowing far more through Section 8 than it ever could on the open market .

What Are the Risks and Rewards of Creative Finance?

Like any investment model, creative finance has both sides:

Rewards

• Acquire properties with little to no money down.
  
  

• Build cash flow quickly without waiting to save 20% down payments.
  
  

• Provide housing to underserved families.
  
  

Risks

• Mispricing Section 8 rents can cost thousands per year.
  
  

• Tenants may occasionally misrepresent references, so vetting and due diligence are critical.
  
  

• Creative deals require strong legal paperwork and understanding of liabilities.
  
  

Jimmy emphasizes that resourcefulness beats resources: you don’t need money to start, but you do need persistence and creativity .

What Mindset Shifts Are Needed to Succeed in Affordable Housing?

Jimmy attributes much of his success to mindset and community. His advice:

• Surround yourself with people doing more than you.
  
  

• Be willing to outlearn and outwork your peers.
  
  

• Take imperfect action instead of waiting for the “perfect” deal.
  
  

As he puts it:

“It’s not that people lack resources. They lack resourcefulness. If you want something bad enough, you’ll find a way to get it.”

Key Insights from Jimmy Au

• Creative finance makes affordable housing accessible. You don’t need massive capital to make an impact.
  
  

• Section 8 vouchers can be a landlord’s best friend. With guaranteed rent and long-term tenants, they provide stability.
  
  

• Always do due diligence. Skip-trace references, check voucher history, and verify housing authority payment standards.
  
  

• Mindset matters. Being resourceful and persistent often beats having cash.
  
  

Best Quotes from the Episode

“You’re being paid to own a property. That’s the power of creative finance.”

“Section 8 isn’t a problem. If you vet tenants properly, they can be some of your best renters.”

“It’s not that people lack resources. They lack resourcefulness.”

“No one will care more for your property than you. Do the due diligence and protect yourself.”

Common Questions This Episode Answers

Q: Is it legal to buy property subject-to the existing mortgage?
Yes. A mortgage and a deed are two separate documents. If structured properly, it’s completely legal.

Q: Can Section 8 really pay above market rent?
Yes, especially for larger homes or certain zip codes. Payment standards vary by housing authority, so always check multiple jurisdictions.

Q: How do I protect myself when renting to Section 8 tenants?
Do background checks, verify voucher history, and even skip-trace past landlords. A strong lease plus clear communication goes a long way.

Q: What’s the first step to getting started in creative finance?
Learn the basics, then take action on small deals. Surround yourself with a community of investors to shorten the learning curve.

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. His mission is to provide everyday investors with the tools, knowledge, and connections to build wealth while solving America’s housing crisis.

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.