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Updated almost 15 years ago, 12/29/2009
A deal that fired up my imagination...
I don't consider myself an adventurer. Definitly not when it comes to money, but I came across this apartment building that fired my imagination.
No, I'm not in the position to buy it,not to mention what it may cost to make it what I would like to turn it into, but here is the deal.
This is a 26 unit apartment building, consistent of 1/1 & 2/1, built in 1929. It located in a bad part of town and it is listed for $346.000. It on the market for more than 500 days and probably needs major rehab. I have no idea what is the structural or the mechanical condition. Last time I passed by it, it seemed to have low income /no income tenants. This is the basic info, but that lack the vision....
The vision starts with fact that it is located right across the street form a very prestigious college. It also have a huge empty lot right next to it.
The vision also include converting the building into a dormitory. Upgrading the building to first class living space with amenities such as super high speed internet, (Fiber optics), state of the art security surveillance system, etc.
I would fence the whole compund and have a pedestrian bridge built overpassing the street, from the college grounds directly into the compound area. I would also convert the next door lot into a parking lot and use part of it as small recrational area. The Building is a sharp edged U shape with a court yard that can be put to recreational use as well.
Your thught...
Being the college age, most of my friends are looking to get out of the dorm life style and into off campus but close to college apartments. I think some of the stuff you talk about just isnt needed, 1000's of college students cross busy streets everyday, building a bridge for just 26 apartments just wouldnt be worth it and would provide probablly no additional income, if they even allowed it. Internet is a must for any college type living complex's, but with such a complex you almost NEVER have a tenant for longet then a year. almost always resulting in cost to make rent ready yearly. Most college style complex's I've seen are all amenties included, meaning you the landlord has additional cost, esp since college students never lived on there own, they dont turn off lights, keep the apartment super cold when its hot and super warm when its cold, why not, there not paying the bills. Internet is also normally provided, sometimes even cable.
I have a buddy In Tucson, Az with a small complex (think it was 6) very close to the University of Arizona, and he did super weird things in his lease, like limiting the amount of parties you can have per month and such, Theres alot of different aspects when renting to college kids who have never lived on there own and want to party and thats about it. Alot of the landlords in Tucson would do "dorm style" living where they put several kids in the same unit, and charge them so much each, which add up to ALOT more then they could rent the unit for normally, But then you have TONS more problems then when normal tenants, fights people who cant live together and want to move and such. tons of headaces.
Benefits I could see would be some parents will pay all 10 months of rent up front,
Negative being most college rentals are normally for 10 month periods, not including the summer.
Benefit being higher rent due to location
Negative being college kids due to location
College kids are rough on everything, partys and fights nightly, and not the type of tenants most investors want.
Location is KEY, possibility of selling the land and complex to the college for growth, selling to investor looking to use land to build bigger newer units and such. Although there are lots of positives to renting to students, there are lots of negatives.
Parking lot is probablly not needed as well at MOST college kids will have 1 car, probablly half living at such a close complex wont have one, probablly a waste to make that lot a parking lot.
I'd make sure its a huge university, and there are lots of out of state students attending. Most universities dont have close to enough housing, but in such a complex almost the only people who would be living there would be college students, so you wanna make sure theres students to rent the units.
-Scott
Ever see the movie Animal House? lol
-Scott
There's a book called "Profit by Investing in Student Housing." I read it a few years ago and the author gave some pretty useful info in it (he actually owns quite a few large scale apartment complexes in college towns/cities). You probably don't have to do all the things you mention but could easily find out by visiting several other local complexes and see what they offer to students. Is the adjacent lot big enough to develop when you get the other building stabilized?
While it's true that most students do party, you can attract the ones that don't by marketing correctly. Kids that typically have higher GPA's aren't throwing ragers and tearing the place apart. Having said that, you want to make sure the doors/jambs are reinforced among many other things.
I see it from a different standpoint. Being from NJ anything selling for $13,000 a door seems like a steal. If you see no income tenants or low income tenants in there it's not condemned, I'm sure it probably has heat, hot water and is liveable. Being old (1929) it has its own set of problems I'm sure but old structures are solidly built and unique in their own way - look at my photos of a building from 1910 and you'll understand.
Depending upon the location there are tons of assistance programs out there (thanks to the Obama administration) that offer landlords grants and low interest loans to improve low income housing. The weatherization programs available include contributions towards replacement windows, new heating systems, new roofs, etc. Many of these programs pay 75% of the cost with the owner contributing 25%. The only catch is that you agree to lease to low income tenants.
My thoughts are about the prestigious college's location choice. What was the area like when they built?
If the area was good then, and is going down this brings their value down and then they may be considering moving to a better location. This would hurt very much in your attempt to update and modernize these rentals.
Then if you do have low/no income tennants how much will you be able to raise those rents upon updating the apts.?
This could be any school jawsette and they are not moving. School just dont just pick up and move after 150 years. If this is cali, he could be talking about USC or UCBerkeley. What school Eddie?
How's the health of the college, Eddie? In this economy some colleges are going under.
My other worry would be why hasn't some other investor grabbed it yet?
Sure, you may be the first to have spotted this, but as you said in another post, it's what you _don't_ know that can get you.
And as has been pointed out, college rentals are a whole 'nother world of 'fun and games'!......
it could be a small private school..in carolina many small religious colleges (think less than 3,000 students) do not allow off campus housing, or limit it to seniors with a good gpa or something..something else to look into...but eddie, i admire your imagination on this one..there is a run down, boarded up motel in a trendy hot area where i live that i would love to change into one bedroom efficiencies...i prob wouldn't even tear out the heart shaped jacuzzis lol
Thanks guys, that is insightful. So here is the deal. This is, as Bryan Alenky guessed, a private religious college. It the Southern Baptist College in Birmingham. It is embedded in the middle of the "Hood" and that is why I was thinking about the bridge. There is no feasible housing around the campus for miles. The "compound" can be easily become part of the campus housing catering to the college rules.
Parking I think would be necessary again, because the college is practically an island in this inner city environment.
I figured that, done properly this dormitory can be leased to the college authorities rather than to individual students. Given the fact that this is a religious college, parties may not be an issue, but coed living may be.
The old saying is that the preacher's son is the worst. I have had too many religious groups in hotels that party hardy to think that just because its a religious college will prevent parties. In fact, the opposite is more likely as kids get away from parents for maybe the first time.
As far as security goes, almost all that could be done will be thwarted by those who believe that they can change those from the innercity and actually bring them into the apartments to teach them GOD. But in the end they themselves will be taken advantage of by those who helped them past your security measures.
eddie, i know this is all just a dream for right now, but i suppose that is how all deals start...anyhow, i would double check with the college's residence life policies...many of those schools (i graduated from one) will not allow off campus housing, or have some variation of that rule..this is to limit the partying and drinking that college has been known for..that being said, many of these small colleges make their money on adult students who work and go to school..perhaps you could work out something like a special rate for these students to get the units filled easier...student life could tell you the ratio of on-campus students versus commuter students to see if this plan is viable...college housing companies make tons of money by individually leasing each bedroom to students..students prefer this generally bc they are not responsible if a roomie moves out...and companies charge like 400 per room plus..do the math..however, for this, each room usually has a separate bath suite in the room..this is what i've seen anyways
My thoughts are it seems like a good idea and you may be able to sell the idea and find some investors. My only advise is to really look into it some more to make sure the school would even allow you to do something like that. If it’s a good deal and that close to the school i don't see why they wouldn't jump on the idea themselves.
Brian Haskins
Originally posted by Brian Haskins:
Brian Haskins
My only answer to that is the up front cost. My rough estimation (Doing every part of the "Dream") is close to $7M. That is a great burden on such educational institution, however, if it is built by an outside entity and all they have to do is lease it on a long term, they may jump on the idea. From their prospective, it can be a very cheap housing solution and if the project is executed with their input, it could be perfect.