Student Housing - Athens, Ga

[Brian Eilering]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $265,000
Cash invested: $50,000

We live roughly 45 minutes away from Athens, Ga, the home of the University of Georgia. With two kids aspiring to attend UGA in their college years, the time was right for us to pull the trigger.

Off-campus housing currently generates $500/room rent for a home in this location/condition. By adding a 5th bedroom and raising rents to the current rates, we will be increasing our monthly cash greatly with just a few fixes.

What made you interested in investing in this type of deal?

We were inspired by the college town podcast featuring the investor from the University of Oregon. Episode #140 with Bill Syrios.

How did you find this deal and how did you negotiate it?

Using Zillow we were able to located a dozen homes I was able to drive by. We narrowed it down to a couple of homes and offered on this one. The market was strong at the time of purchase so little room was available in terms of negotiating.

How did you finance this deal?

We used money from a 1031 exchange as our down payment and used a conventional loan for the balance.

How did you add value to the deal?

Increasing rents to match current market conditions and adding a 5th bedroom. Together, we were able to greatly increase our monthly cash flow.

What was the outcome?

So far, so good. Tenants in place through July of 2021 and we already have potential tenants inquiring for the next school year at our increased rent rates.

Lessons learned? Challenges?

Simple challenge: we need to make repairs including adding a 5th bedroom in a short period of time. Existing students lease ends in late July, new students would like to move in Aug 1.

Purchasing during COVID was a challenge as all of the banks had tightened up their processes. We would have sailed through the process a few months prior. In this case, we actually had to extend closing twice due to loan underwriting.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am an agent so I was able to benefit by managing the process on the buy side while also getting the commission from the sale.