hey this is my first post on BP, i think i found a good deal

[Jeffrey Hanson]

hi everyone, this is my first time posting to bigger pockets

i am an airline pilot in my mid 30s and looking to create a new life for my wife and myself and our baby on the way. i have dove deep on BP and been scouring the bookstore and the podcasts and learning as much as i can about investing in real estate. 

we currently live in a 1b/1ba home we own, and no longer owe any debt. i bought it for $120k in 2015 with 2br/1ba, met my wife the next year, she moved in and we gutted it and rehabbed it ourselves (aside from some structural flooring stuff and the final electric and water connections) and blew the tiny bathroom out into the adjacent bedroom, making the house a 1br/1ba. we did all the framing and flooring, paint and drywall and fixtures ourselves. we plan to add an additional bedroom or two, and possibly another bathroom, in the unfinished attic at some point. 

i was granted a HELOC for $120,000 with my local bank after it got reappraised a month ago at $163,000. i think we spent around $25,000 on the rehab so i'm feeling pretty darn happy about the situation. obviously the covid exodus from boston and new york have pumped real estate prices but we dont really plan on selling any time soon; but possibly renting it out if i get relocated for work.

i am trying to find my first investment deal, and my wife and i have narrowed down our plan to aim for a rental with cosmetic rehab and solid tenant base. we thought about house hacking. i'm not sure of where i'll be sent next with work, but i will be sent somewhere else soon. our local market (vermont) is not very landlord friendly so we are looking at long distance, self-sufficient rental as our first investment. i am leaning toward student rentals, and after searching and comparing prices and stuff we have chosen to focus on a few different college town markets in the TN, KY, WV region. 

i have found a property i think might fit. its a triplex with three 1br/1ba units and off street parking, split utilities, w/d in each unit, located a half block from campus. it seems in decent shape, its been on the market over 200 days, and is listed at $190,000 in a market i believe i can ask at least $750 per unit for rent, which would bring my cash flow to near $1000/mo if i used the calculator correctly.

what next?? i couldn't find any agents on BP close to the town, and we live in northern New England so its not exactly a day trip to go see it, although we can fly standby on any airline (a benefit we plan to use to our full advantage in this new venture). 

so this would be a long-distance investment... i guess i should call some local lenders, property managers and agents to see what they think? i know lots of people shy away from student rentals because of potential for damages and high turnover and stuff, but someone is making money doing it so it might as well be us? 

students deserve nice places to live. we aren't trying to be slumlords but i do realize that students probably have slightly lower expectations than other types of tenants, so i feel we wont need to break the bank in the level of finishing details like we did on our own home but we will provide housing that is clean and safe and attractive. also thinking we can use some creative materials and methods to make the units party-proof. maybe we get lucky and find some long term professors or grad students and don't have to do annual turnover on every unit. even so, i budgeted 8% for property management after watching david greene's webinar yesterday.

the heloc would allow for an easy down payment and a nice buffer for rehab, and i have 750+ credit score and good wage earning history, so i think a conventional loan should not be a problem to obtain. a cash out refi might be an option on the horizon if we decide to really crank a proper rehab but the units (from the pictures i saw) are livable as-is.

should i be more specific here on the address/market to get better help? is someone gonna snipe it from me if i am?

should i post this in another category forum? should i abandon the student rental idea altogether?

thanks for any and all insight, and for all the help so far. BP is amazing.

jeff

[Jonathan Bombaci]

@Jeffrey Hanson congrats on making your first post. Thanks for providing so much detail. Out of state investing is a bit more difficult but at the end of the day to be successful you still need to build your team. I would recommend posting the state and city in your posts going forward so people with that market knowledge can chime in. I’m in the MA/NH market. Those numbers would make this a great deal within 1 hour of Boston but if it was in the Springfield area that would be run of the mill. I can’t give you an opinion on your numbers since I have no clue what state or city this is for, and likely I won’t know anything about that area if it’s outside of New England. 

Start by finding an agent you can trust. I’d recommended reaching out to any agent here on BP that operates in the state you’re targeting. They may or may not cover your target area but my guess is they’ll know someone that does and they can pass along their knowledge and opinions on the market. The agent you choose should be able to help you find financing and a property manager. 

On a related note have you checked out Keene NH at all? They have a strong student rental market, affordable prices, and I assume will be within driving distance of where you live. Yes tenant laws are tough in NE states but if you have a strong team they’ll take care of it for you. We own and manage quite a few units in MA and NH. As long as you take time to understand the laws, and aren’t a slumlord, you’ll be fine.

Best,

Jon