All Forum Posts by: Dave Poeppelmeier

@Jarret Durst welcome to BP! I invest in Student Housing as well, as does @Will Gaston. We've both posted on this topic many times if you want to read up more, but if you're looking at multiple college campuses, here's my 2 cents: pick one market and get good at it. If you're in Huntington, then unfortunately (I say that in jest as I invest at University of Toledo, a former MAC rival) Marshall is probably your easiest route. Even if you don't plan on self managing, it's going to be much easier to see properties, get a feel for the housing culture at Marshall, etc. When you start investing in Student Housing long-distance, it gets much trickier. You need a PM who focuses on Student Housing, not just a general PM. In Athens, that may exist being that OU is the main driver of the region. You need to know when the rental season is, what do students look for regarding housing, is there a high/mid/low end market, etc. 

Student Housing is a fun niche of RE, but it involves a little more hands-on if you're managing yourself. Best of luck to you!

@Janice R. it depends on what kind of relationship you want to have with the PM. Some PMs are full service PMs, in that they handle everything. I agree with @Richard F., in that if an owner is also interacting with the residents, it's going to end badly because the residents are going to run to you when they don't get the answer they like from the PM. You're also likely going to get this with your current residents that you've interacted with, so be ready to say "Sorry, you need to contact _______"

It's hard going from self-management to a PM because you're used to being in control. With a PM, THEY are in control when it comes to managing the property. Regarding not having a copy of the keys: yeah, that's a bit much on the control freak scale of the PM. But, it's how they operate. If you don't like that, then find another PM. But IMO, if you're going to use a PM, be prepared to have them manage, not you. Best of luck!

Quote from @Benjamin Knight:

What application/program do you recommend for managing your books/portfolio.  We are currently using quickbooks but as our portfolio expands I was wondering if there are any other user friendly applications that anyone recommends?  We are ideally looking for something that is designed specifically for real estate.  

 Unless you love accounting, I have one piece of advice: hire someone. When we got to 7 properties or so, we couldn't handle the books anymore, even with one of these programs. I even dropped down to part time in my job to manage the houses with repairs and bookkeeping, and we still couldn't do it. My wife and I absolutely HATE accounting, and when it came to tax time, because we didn't know what we were doing, our accountants at the time (who also didn't know what they were doing) took our crappy reports and probably cost us a lot of money. 

There are bookkeepers out there that will simply manage your books for you, it doesn't have to be a CPA that costs twice as much. They will give your tax professional all of the reports they need to make sure you get all the RE deductions you should be getting. But, you have to be diligent in giving your bookkeepers ALL of your information. You don't simply hand them a box of receipts and say do your thing. Yes, it costs money, but it's being done right and I'll pay for that piece of mind. 

Quote from @Michael P.:

Quote from @Alon A.:

Quote from @Riggies B tang:

There are many reason why units are NOT rented, some are location and some are poor management which is a very important role in your out of state investment journey. In my case, I am not certain what was the main reason but make sure the property management fully vetted with good reviews. 

As for the city regulations: There are many fees that property owner need to pay and depending on where you are buying, there's POS is involved if the seller choose to transfer that to the new owner. Sometimes cost can be very hefty. Your agent probably can give you more information on this part.

The cost of properties in Cleveland is affordable compare to other states which is great for most newbie investors to get their feet wet. However, not much of an appreciation unless you buy and hold for generation wealth.

 What cities the apprecetion in high and also good for cashflow ?

 Obviously columbus Ohio

 Speaking of summoning...

I wholeheartedly disagree with everyone who says College kids will destroy a house. I've been investing in Student Rentals since 2017, and I have yet to have someone destroy a house. With that being said, I give kids good houses to live in, houses that look like the ones they likely grew up in: all walls have fresh paint and no holes, kitchens with cabinet door that are all working and not half hanging off, original wood floors or LVP, etc. If you give kids a bombed out party pad, of course they're going to destroy it more. I also agree with @Ramandeep Sidhu in that you need to have a good management plan in place. I manage my properties myself, and we literally have a discussion of the expectations I have for my tenants, as well as my responsibilities as the owner, before they move in. When I have done that, they report maintenance issues timely, and have done a great job taking care of the house. The student renters that I inherited that didn't have this kind of discussion with are the ones that leave furniture everywhere, oil soaked garages, freeze out the AC units, etc.  @Travis Reed Student Housing is a great niche, but just know that it does take a little more hand holding with the college kids on how a house works, how to be a good renter, and the leasing process is usually a lot crazier than a normal LTR. But, the returns are nice if you do it right. Good luck!

Quote from @William Conn:

Hi, I am a college student who has more than 2 years left before I graduate and I am interested in any way I can start out. I have been listening to podcasts, reading books, and asking around my town for property managers, REI meetings, and anything I can find for the past 5 weeks. What else is something that I can put my time and energy to that will be worth while?

 Congrats William, I think all of us wish we would have started in RE much younger than we did! However, this an absolute marathon, not a sprint. It all depends on what you're going to school for. Do you love your major and you want to do RE on the side, or is RE your thing? I would say is figuring out what you're going to do after college is your primary objective: work at a job and build capital to invest with, or are you going to go directly into RE and work with a brokerage/PM/title company/etc? 

I agree, there could not be a worse topic. I have new investors calling me wanting to by 20 units their first year with unrealistic expectations due to podcasts like this. Yes, they say "outliers" in the request, but that's exactly what it is: the exception, not the rule. 

3 leg parlay with Cavs to cover, Over on Spida points and Allen rebounds. Doesn't matter what game. You're welcome. 

Quote from @Jeremy H.:

Doesn't Cleveland have a declining population? Hasn't it been that way for awhile?

That's my hang-up. I hear a lot about it, I'm sure there's some positives I don't know about, I'm sure there's some success and I'm sure there's some horror stories too. What gets me is the housing is cheap and there's a ton of renters. 

The macro data from some brief research I did awhile back didn't look good. 

In fact, Columbus looked a lot better. If I'm moving to Ohio, why do I move to Cleveland over Columbus? Columbus had an increasing population...there must be a reason more people are moving there...

I mean Cleveland is what, the 2nd poorest city in the nation. The poverty rate is like 30%. 

I'm not trying to be argumentative here, just playing devils advocate. Why should I invest in a city that's losing population and is one of the poorest in the nation?

Jeremy, this is what people that aren't from the Midwest/Great Lakes/"Rust Belt" don't realize: Even though you'll still have "declining population", it doesn't mean that Cleveland is a cesspool. Cleveland has trendy and up and coming neighborhoods, a fantastic restaurant scene, 3 major league sports franchises, and is doing well in general. The Rust Belt will continue to have declining populations because in the heyday of Manufacturing, the Rust Belt was the Mecca of employment. Ask anyone in Detroit about the cultural significance of the Motown Era when Detroit was hopping with the Auto industry. Same thing in Cleveland/Akron/Youngstown: people were flocking to these area for well paying jobs in Steel and Manufacturing. The population is going to continue to decline because people from that era, who stuck around, are literally passing away. Otherwise, if someone is worried about poverty and war zones... don't invest in those neighborhoods! If investors want cash flow, you go to cities like Cleveland, Cincinnati, Toledo, Akron, Dayton (making sure I get all the keywords in for everyone). I understand appreciation is a great way to build wealth, and there are A and B class areas of any Midwest city were, if that's what you're looking for, you can do at a MUCH lower point of entry than the coastal cities. You can invest for appreciation in Columbus, too. Columbus is absolutely the crown jewel of Ohio: Great economy, state government, literally limitless expansion potential as it's surrounded by cornfields, high property values. But, you're not going to cash flow well around there in general, because the secret has been out for a while. That's why investors looking to invest in Ohio (landlord-friendly state for the most part), are looking at the "declining population" areas as places to buy great properties that meet their cash-flow investment criteria. 

Bottom line: Sometimes the macro data doesn't tell the whole story. 

@Zachary Stein First of all, congrats on purchasing your first Rental Property! Most people don't ever get to that point, and get stuck in Analysis Paralysis. However, it seems you have a little catch-up to do, since these are very basic processes in RE. I would suggest looking in the BP Rookie Podcast and Real Estate Podcast for episodes regarding managing a rental property to give you some more guidance. There's also tons of articles and posts on here with great advice, and it's all free!

To get to your question, I agree with Joseph and Will. Asking for First and Last Month's rent is outdated I feel, and I remember even as a young professional there was an apartment that I wanted to rent, and they asked for first, last, and security deposit, and there was no way I had that much free cash available. A local RE attorney can definitely help you know what your local rules and regulations are regarding rent collection, deposits, etc... but you can also get this information for free (along with leases) at a local REIA or Investors group. It's good to have an attorney in your back pocket for when you will eventually need them, but this kind of stuff is what the RE community is for!

Again, congrats on your purchase, and best of luck to you.