All Forum Posts by: Antonio Porta

Hi Wade, 

Please see the thread I commented on,  I am an experienced investor in the college rental market. It is a different animal and I would suggest the following tips... 

______________________My post _____________________________________________

I own a 3/1 ranch house 1 block from Rowan University (Glassboro)

It is a completely different market than Northern NJ (where I live). I charge $535 per bed room and they pay all their utilities (gas electric water).

SFR, 1 water meter, they pay. I put all of their names on 1 lease, though give them the option to pay their portion separately, always take 1.5 months security because college students love banging counter tops, throwing beer bottles, and tossing each other into walls after 2 shots of gin.

Students typically get their refund check end Sept-ish, I give them an option to pay Fall semester Sept-Dec (4 months) and spring semester Jan- May (5 Months) up front, with no discount. I provide a receipt for months paid upfront. Some students find it easier to pay it all up front since they have new found loan dispersement money, then can then budget accordingly for beer, POF premium, and netflix.

I write in the lease they need to take care of snow removal and lawn care, though I provide a mower. Any citations for violations I receive I gift to them, as per the lease.

If you WIND up purchasing, please write this down somewhere and staple it. This tip will save you from financial alot of stress in which I endured and cut my teeth on. If you want to target college students only, this is the best strategy:

Always rent from JUNE 1st to May 31st, 1 year lease. I send a letter to the house via regular mail in January. Every January. In the letter, I explicitly ask, if they want to renew for the following year, then I need to know by end of Feb. Why? If you do not do it this way then you risk running your unit vacant because college students tend to start looking for a place to stay around Feb-May for the following year, actually more like Mar-May, but you want the Ad up in Feb. After May, in a predominately non-commuter, most college students go home for the summer. And your house sits. When they return in September, they already know where they are going to live and they start the semester and the house sits vacant because you didn't put in on the market from Feb-May. I learned the hard way, trust me, staple this to your t-shirt. In Glassboro at least, its incredibly ****** market to rent to families, alot like chewing on glass, it may be different for other college towns of course, but Ive had to evict 1 family, and the other, they had a drug operation (found out from neighbors) and a family of 5 plus the family of 3 I rented to living out of the house.

I manage long distance, have contractors on speed dial, and several college friends I can call to run over to the house if needed for 50 bucks a trip. 

@ michael badin Thanks for the advice. Is this applicable for electric and gas? We will look into this and keep you posted. 

Looking to buy a 3 unit. 2 units are on 1 gas meter. Need a quote to separate. Reasonable and experienced needed. Same 2 units on 1 electric meter, also want seperated. 

Any suggestions?

@David Casas 

You have got excellent feed back here.  I will add as a investor in the college market.

I own a 3/1 ranch house 1 block from Rowan University (Glassboro) 

It is a completely different market than Northern NJ (where I live).  I charge $535 per bed room and they pay all their utilities (gas electric water).  

SFR, 1 water meter, they pay. I put all of their names on 1 lease, though give them the option to pay their portion separately, always take 1.5 months security because college students love banging counter tops, throwing beer bottles, and tossing each other into walls after 2 shots of gin.

Students typically get their refund check end Sept-ish, I give them an option to pay Fall semester Sept-Dec (4 months) and spring semester Jan- May (5 Months) up front, with no discount. I provide a receipt for months paid upfront. Some students find it easier to pay it all up front since they have new found loan dispersement money, then can then budget accordingly for beer, POF premium, and netflix.

I write in the lease they need to take care of snow removal and lawn care, though I provide a mower.  Any citations for violations I receive I gift to them, as per the lease.  

If you WIND up purchasing, please write this down somewhere and staple it.  This tip will save you from financial alot of stress in which I endured and cut my teeth on.  If you want to target college students only, this is the best strategy: 

Always rent from JUNE 1st to May 31st, 1 year lease. I send a letter to the house via regular mail in January. Every January.  In the letter, I explicitly ask, if they want to renew for the following year, then I need to know by end of Feb. Why?  If you do not do it this way then you risk running your unit vacant because college students tend to start looking for a place to stay around Feb-May for the following year, actually more like Mar-May, but you want the Ad up in Feb. After May, in a predominately non-commuter, most college students go home for the summer.  And your house sits. When they return in September, they already know where they are going to live and they start the semester and the house sits vacant because you didn't put in on the market from Feb-May. I learned the hard way, trust me, staple this to your t-shirt.  In Glassboro at least, its incredibly ****** market to rent to families, alot like chewing on glass, it may be different for other college towns of course, but Ive had to evict 1 family, and the other, they had a drug operation (found out from neighbors) and a family of 5 plus the family of 3 I rented to living out of the house. 

I manage long distance, have contractors on speed dial, and several college friends I can call to run over to the house if needed for 50 bucks a trip. 

This may not be what you were asking about but I hope this helps and Good Luck!!

@Joe Stretch 

Thank you for that long, well thought out, reply. Love the detail, very helpful! 

I heard from a mortgage guy that FREDDIE MAC's Home Possible is tightening their belt, reducing the 147ish income down to 89kish on July 29th, though the median income may be adjusted, but not likely to help our situation. We are looking at a property in a high census area, which by default, Home Possible will not be allowed.  It was suggested by our mortgage guy to submit an address on a property we are likely considering by end of day tomorrow (Thursday) so it will be grandfathered in (the loan will). 

Are there any great mortgage books  you like etc that will help gain insight on different loan products/ underwriting guidelines ? 

We really want this 3 unit property in a nice area. Heres the challenge: 

Presently 2 oil tanks there. One burner is gas, the other oil burner.  2 units are on 1 gas and 1 electric meter.  Cost for the  conversion from oil to gas ONLY is $7,000.   This would make it more efficient but still is only 1 meter. The contractor said that he does not sub meter for gas, as I would have to call others, which I do not have an issue doing, but said it may cost triple to have separate meters for Gas. I am looking into actual cost, I want to be able to make an offer with considering the cost to sub meter gas.

As a landlord I feel like I would have to include gas in the rent? 

Ive read on here that some landlords calculated the sq footage or price per person and split the utility between the units that way.  It would make it much more easy to just have them separated. The cash on cash return is much more unpredictable with gas being included, and this is concerning for me.

I am wondering how its worked out for other landlords who do any of the above I mentioned and if so, have you gotten any push back from current or even prospective tenants?  Or has it been difficult to rent when a tenants moves out? 

As far as electric goes,  I am looking at submetering electric, We have a  cousin that is an electrician so it should not be too costly. 

Any thoughts are appreciated. THANKS!

@ John Warren 

Thanks for the fast reply. 

I thought you can only use FHA once, unless you move 100 miles away or something like this. What do you mean Refinance FHA and do FHA again for the 3rd move?

@ Stephanie, 

THANK you for the fast reply, a very helpful tool indeed. 

Awesome,thank you for responding. 

My game plan is to go 5 % down conventional for my first and FHA for the second.

My mortgage guy told me the Home Possible product which allows you 5% down is changing its income threshold, from 147k down to 87kish. He explained this is not for all neighborhoods in NJ. Its just those with a higher census track. And he provided a map that we can check where these census areas are, those with low census areas freddie mac is not enforcing the income restriction.

This is not great, as we would not be able to use this product. Has anyone else heard of this? Apparently, it takes place July 29th

@John Warren, thank you for that. So we would bascially save the fha for the 2nd one. 

What loan product would you recommend for the 3rd multi family owner occupy. I know we must live in it for 1 year. Would it be possible to do conventional 5% down for the 3rd  if we went this route for the 1st property? 

Would like to piece together a game plan before we get our first one. Appreciate your thoughts.