College Station TX - Luxury Town Home - Buy and Hold opportunity

[Dan Naughton]

I'm thinking about a buy and hold opportunity for a luxury town home 2 miles south of Texas A&M University in College Station TX. 

I understand CS / Bryan TX are low income areas, but A&M is growing every year and more and more kids/concerned parents are looking for a safe college living arrangement off campus with a bunch of amenities at their disposal. 

My wife and I will be managing this property on our own from North Houston (45 min - 1 hr away) and will be dealing with college kids as tenants, potentially sororities and fraternities.  However, being a former military officer,  I am confident I can handle landlording college kids.  Also, the rent is $2500 which could be seen as high but the going rate in CS is $700 per room.

Here are the particulars on the deal:

Town Home Specs - built in 2015, 4 br, 4 ba, 1900 sq ft.  Stainless steel appliances, patio balconies, two car garage, very nice finishes.

TH amenities include resort style pool, cabana, and views of Kyle Field (Aggie football stadium)

Purchase Price - $249,900

Financing - 100% financed w/ VA loan, no money down, 3.5%

Rent - $2500

Mortgage - $1123

Prop Taxes - $447 / month

Insurance - $57 / month

HOA - $170 / month

Vacancy factor - $250 / month

Repairs factor - $100 / month

Cash Flow - $356

Cash ROI year 1- 34%

Total ROI year 1 - 111%

Please let know your thoughts or point out anything I'm not thinking about....

Thanks!

[Jim Cummings]

Dan. I'm certainly NOT the Expert on VA Financing, but as a REALTOR for 25+ Years, don't think you'll be able to get ZERO Down VA INVESTOR Financing. You can get VA ZERO down, but most Lenders are going to require it be Owner Occupied - for at least a year. On the properties I'm pursuing, Lender is telling me 25% Down Payment. And IF you're unable to do ZERO down - it doesn't make sense to use VA. The other thought about Townhouse Complexes is the sometime high Monthly HOA Fees, eating into your return. My advice would be consider Duplex or SFR.