First time buying a college rental

[Dan Sargis]

Investment Info:

Single-family residence buy & hold investment in Urbana.

Purchase price: $162,000
Cash invested: $29,700

This was my first time purchasing a house specifically as an investment, as my other rental was my home turned rental property. This one is a different ball game for me because it is located one block from the University of Illinois and is used as a rental for college students. It is a single family, 4 bed / 2 bath house. It gets a pretty good rent for the size, but I still need to catch up on some deferred maintenance.

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

I was originally looking for a SFR away from the university, but it was tough to find something rent ready that would cash flow. When I looked at this one, the cash flow was there and I was able to get very good financing. It is also pretty close to my house so travel to and from wasn't going to be overly burdensome.

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

It was an MLS listing. Negotiated through my agent, I came in pretty close to asking, but also asked for a lot of closing credit.

How did you finance this deal?

Standard residential mortgage with a local bank. I was able to get 30 year fixed at 3% with 20% down payment. Hooray for low interest rates!

Lessons learned? Challenges?

The biggest challenges have been that the house wasn't in great shape, and I don't have landlording systems in place for when issues arise. I am also still trying to figure out appropriate COVID measures. I feel bad coming into the house unless absolutely necessary because I don't want to potentially expose anyone. But at the same time there are improvements to the house I really want to perform. I don't think I've found a balance I'm comfortable with yet.