All Forum Posts by: Charles Sinn

@Sam Epperson are you use there is a shortage of housing?  This is something I am curious about and I can't figure out where I stand.  Many units are going to be coming online in the next 6 months.  When IU was dealing with their mold issue, they were able to secure 1100 beds this winter for the Fall 2019 school year.   Which means, there was 1100 vacant beds in just a few apartment complexes that IU secured.   If there was a true shortage, this wouldn't be the case.    I have also seen quite a few rental concessions popping up at some of the higher end apartments that are just a few years old (no longer the brand new "cool" places to live). 

Also - anything under $150,000k in Bloomington seems to be selling for above asking price.  There are a lot of first time home buyers in the market right now at these lower levels which an investor has to compete with.  Its getting hard and harder to make the numbers work

I am interested if the opportunity is right obviously.   Feel free to reach out with some basic details on the properties.  I really like South/East side bloomington.... I don't want anything west of 37 or in Ellettsville.  I like a short commute to home 

The school year has begun at IU, and for the first time in a few years, I have noticed vacancy at some of Bloomington's "hottest" places, which is odd for the start of the IU semester. 

Is this a first sign that we are finally over-built?  Or is a little vacancy planned and expected by these management companies?   I've heard from one leasing manager who runs 3-4 very big properties in town that there are a surprising amount of empty units.  Also, recently build hot spots like Urban Station and the park on Morton seem to have available units.  Even Echo park which is only a year old and more affordable than downtown has empty units.   

I had great experience with Shine.  I didn't get a policy with them, but they had a lot of options for all kinds of things, even Food truck and commercial Auto policies.   If I recall, they were also very responsive.    I can't say the same for the people who service my other commercial auto and GL policies currently. 

What area of town did you buy in?  Some companies specialize in student rentals, others in traditional single family homes with less turnover.   The property management companies seek to make a lot of their profits from the annual turn-over.  So its is important that you learn about their pricing up front.  Especially in regards to leases that are any less than 12 months long.  Many leases in Bloomington are 11 months + 2 weeks, and some are 10 month leases and it affects how they deal with the tenant turn over, pricing etc...

When talking to them about timelines and pricing, be sure to run through the steps they take week by week from July-September so that you know what to expect from them each step of the way.  

Also - Try to find a company that encourages multiple year tenants, with some sort of benefit given to a tenant who stays longer than one school year.  Otherwise, you will find that the management companies would end up looking forward to the turnover and all the revenues they get from turning over the unit.   

Also#2 - There are bad operators in town.  Try leaving some after-hours voicemails with questions and see how quickly they return your calls.   Also see how hard it is to get personal cell phone numbers of key employees.  The more forth-coming they are with those, the higher the likelihood is that they are a good operator who takes care of their...stuff.  

Yes, rental rates do go down as you move away from campus.  But more and more millennial and grad students are starting to live further away from campus, so the rental market it still strong outside of the immediate vicinity of campus.   Also, you will be tempted to buy something west of town based on prices... But be careful, everything gets lower quality as you move west on the map.  

Also do research on the new hospital that is being built.   The biggest winners and losers in the real estate game over the next decade will come from this hospital moving.  Know one knows what will happen with the properties surround the old hospital, but I would bet that any neighborhoods around the new hospital's location will benefit.   These areas arn't really student related housing, but worth looking into. 

Hey Michael,

I hope you enjoy Bloomington!  HAND can be a breeze to deal with or a nightmare.  

HAND is about $100/year... Or $100 inspection, which maybe lasts for 3 years? something reasonable.

https://bloomington.in.gov/housing/rental-occupanc...

 If you purchase a home that was previously a rental, they will have a file on it, and everything should be up to date with minimal repairs needed. 

If you buy a home that was a single family house, you could be in for some trouble.   They are very thorough, which can be annoying, but it also forces you to make repairs that your probably want done anyways.  

Some notes from my experience (just a representative of what I have learned, the list could be MUCH longer, but it will show you how picky they can be). 

-HVAC -- you have to get a receipt from a HVAC contractor saying its running clean

-Bathroom tub needed more caulking around the edge, to prevent water from reaching subfloor

-Toilet was running

-a Window wouldn't hold itself up, which ended up being a pretty expensive repair.  If you buy a house with old wood windows with broken counterweight ropes, its a mess to fix

-I got a condo with a party wall.  In the attic, the drywall between units wasn't seamed.  I had to get drywall compound on all seams

-Closet bi-fold doors were off their hangers 

-Front door needed some more weatherstripping to seal out cold air.  

The 1% rule will be next to impossible to hit... BUT, because you are buying to live in while in school, it is absolutely worth buying, and should wind up cash flowing pretty well once you leave. 

I worked with and recommend Evan Buckmaster in Bloomington.   He is in a large office and knows of deals on and off market.  He is great, and his office is able to get everything done quickly.  Their office is literally next door to the biggest Title company in town, so everyone knows each other. 

Wes, who is your target customer in Bloomington? Students during the year that only need housing for a semester? Parents in for graduation weekend? Knowing this is critical in Bloomington. Bloomington has a TON of vacancy over the summer, so it would be difficult to fill your STR for 4 months out of the year and be profitable over that summer. AirBnB and craigslist is already filled with too many properties and sublets.

Also, Bloomington has a lot of new apartments coming online in the next 12-18 months... This is going to suppress rental prices of individual houses, be it for STR or regular rentals. Unless of course you create a very high end AirBnB like Grant Street Inn, catering to parents able to pay $250-$400/night. I think that is a niche that has not been filled, but any houses within walking distance of campus or downtown are 400K+.

We have an AirBnB in our neighborhood on the south side of town.  Its been going for over a year now, so I assume it is profitable for the owner... BUT, they used to live in it, so it probably has $10,000 worth of furniture already in the house, so keep that in mind. The neighborhood is 240k-400k houses. 

Digging into Data about the Bloomington and Monroe County growth would be a great topic for an RE meetup.  Touch base with Thomas Landis if you haven't already, to come to their next meeting. 

We can speculate about it all day, but the truth is, some very well paid developers, builders, and bankers are continuing to encourage more growth of apartments in Bloomington... so they must be onto something.... unless they are building a tiny house of cards in Bloomington.

Bloomington is in its own world, so you can't relate what is happening here to any other market.  Not only are apartments being built downtown, new developments are still being planned, such as Regency Apartments building another huge development off of tap road (just in time for when I-69 in completed).  The key for getting approval to build anything (multi-family or single family) is density...And City/County want higher density in town. 

Bloomington has always been expensive, so first time home buyers don't usually have a chance at anything in town.  To add to that problem, both the City and County planners are very Liberal and DO NOT want cookie cutter neighborhood developments built.  So there are very few developments in Monroe County where a young couple can buy a sub-$175k house like you can in an Indianapolis suburb.  So.... If you can't afford a house, you might as well get an apartment, and if you are getting an apartment, you might as well get the perks of in-town/downtown living. 

I do believe this is leading to a Glut of apartments, which may not drive rents down, but will at least level off.    Its important to note that many of these new developments where planned 3-4 years go, so they will continue to be built long after the housing need has been met. 

Also*** Taxes in Bloomington are nuts if you want to rent a single family house.  This causes apartments to have the upper hand financially (again think about the City/County encouraging more density) .   I have a $130K condo, if I lived in it, taxes would be $900/year, but as a rental they are about $2100 and that doesn't even include trash and recycling service  AND i have to pay $100/year to HAND to rent the place.  

As far as population increase, I do think the Bloomington population is increasing more than published data, which I think includes a lot of dirty data.   There are a lot of 5th year seniors, students in masters programs, husbands/Wives of students and employees still sticking around Bloomington, and recent graduates who have decided to stay around town.   Many of which have not made their permanent mailing address "Bloomington" from a public records standpoint.