Listen I run a property management business http://www.haven-properties.com and have some experience in Section 8 requirements.
You want to screen your applicants as much as you would any other prospective tenant. The County will make most of the payment and you should get a copy of their grant level cert..
Once they are in the tenant pays their small portion and the County pays the rest. The County will inspect your home prior to approving the Section 8 voucher for that tenant. They will also do an "annual inspection" about a month or so before the end of their lease.
I personally don't like Section 8 although for the lower end rental market, they are a great source for income for folks that would not otherwise be able to pay their rent.
The big reason I don't like them is that they (the county) will not do much to help you if you have a problem with the tenant and they will "nit-pick" some items that could be "deferred"... so any defects will be required to be repaired prior to the tenant moving in.. and trust me... the County moves real slow...
I hope this helps...
In the meantime.. Make it a Great Day....
choosing tenants is especially important in the world of section 8...the tenants are sometimes the bottom of the barrel as regards the applicant pool (i said SOMETIMES).
there are also lease terms that you may not be willing to agree to...be sure to ask the plan administrator or applicant for a full copy of all lease documents they will want.
they have rent amount limits as well that are local i think. i would recommend getting some LOCAL input from the landlords in your area who have a few experiences with the sec 8's. try the housing forum at craigslist.
and positive cash flow? i grinned at that...every landlord dreams of that...few really get it in the first few years of ownership.
You should check out the Sacramento Housing and Redevelopment Agency's website at http://www.shra.org. You should be able to find any information you are seeking there.
Regarding your projected cash flow, just make sure whatever rental amount you're projecting, reduce this by 25% to account for items like maintenance costs/vacancy periods/property management fees, advertizing, fees, etc