Buying in College Towns

[Spencer Goldenberg]

This would be our first property. 

My brother and I found a tri-plex in Lawrence, KS (this is where the University of Kansas resides and where we both attended school). My brother lives in Kansas City which is only a 40min drive from Lawrence. The predicament: the only way we can afford a downpayment on this tri-plex is if my brother uses his first time home buyer and house hacks. He is open to the move. The owner wants $295k. Current rent is $2,920. 

Positives: great location (should always be high demand for renters). Current owner is paying for water. Total closing cost should be under 20k. No major repairs needed. Potential to add value cosmetically. My brother is only a year out of school and still has connections in Lawrence. KU is a growing University.

Negatives: It doesn't meet the 1% rule, not to mention my brother will have to take the smallest unit pushing monthly income down to $2,290. It is next to a popular bar area = party tenants. Not getting a great deal on the property - we would have to purchase at market value. 

We are also looking at properties in Kansas City and Omaha (where I live). We are trying to decide if we should go for it or wait for a better deal in Omaha or Kansas City. Any thoughts, comments or suggestions would be appreciated. 

Thank you.