Single Family Deal -- How would you do it?

[Peter Ricca]

Hi BP -- I'm in the process of closing on my 2nd real estate deal (central Ohio). I have several directions I can go with this property and wanted to ask your opinion. 

Property

• SF Home 3BR 1BA 
• $125k cash deal
• ~$500 closing costs 
• -- $6,000 for new furnace (most likely as it's end of life) 

1. Standard College Rental

• - Cash out refi with a 30 year fixed, get 70% of my money back (possibly more as I'm buying it under market value) 
• - Rent to local liberal arts college students for $1200/mo and (according to the rental calc) cash flow positive around $300/mo 

2. BRRRR 

1. - Spend another $5-6k sprucing the place up with new pergo flooring fixtures
2. - Spend additional $20-30k adding a 4th bedroom to the back porch area (I'm a noob, so not sure how well I'd do price wise first go around) 
3. - Refi at the value of an updated 4BR comp and pull out 70% of that
4. - Rent for a likely higher cash flow (figure around $500/mo) 

3. AirBnB Rental

1. - The college and bustling little downtown has provided a decent AirBnB market
2. - According to AirDNA report I can average about $1100/ mo doing short term rentals (good occupancy rate and solid demand) 
3. - There is intrinsic value here being that my brother lives 20 min away (I'm in NJ) so my family can use it as a place to stay when they visit him. 

Overall, I'm happy that I'm under contract and barring any crazy inspection issues, I think this is a good deal in the fastest growing county in Ohio. Would love your feedback! 

[Peter Ricca]

@Brenden Mitchum excellent points, Covid is definitely looming concern here, but I didn't want to stop me from grabbing what appears to be a good deal. 

Great point on keeping it flexible so I can pivot. The "College Rental" concept was solely because the city has a popular liberal arts college in it, so I'm assuming a lot of my rental demand will be students, but I think I could also find some solid post grad tenants, young professionals, etc. 

Thanks for the advice on adding the bathroom first, I hadn't considered that and will focus on the bathroom.