All Forum Posts by: Scott Dixon

Hi @Johnathan Lomax

I have invested in a handful of properties in Champaign over the past 5 years or so.  Let me know if you need a second set of eyes on a property you are looking at and I would be happy to give my 2 cents.  

Best of Luck!

Scott Dixon

Hey @Chabu Nsokoshi congrats on the purchase!  I have done individual bedroom leases in Champaign in the past but by far prefer to sign one lease per unit.  Probably goes without saying but one lease helps to reduce the overall management of the property and "dynamics" which can arise when you are matching people up who don't have any prior relationship.  A property of that size your best bet to get one lease would be students and probably niched down into a senior house for a sorority/fraternity. To execute on this niche your location needs to be within short walk to campus and campus town. 

I am sure you are also aware that you will be targeting school year 2018/2019 (leases starting 3rd week 2018) for a group/single lease.  It is highly unlikely to get a group of that size paying the rents you want this time of year in Chambana since the school year cycle has already started.  So the question is can you do individual bedroom leases this year to reduce your 2017/2018 school year vacancy rates then push hard to get a single lease for the next school year?  Secondary alternative might be some hybrid bringing using airbnb as an option especially on big weekends like, Big Ten Football games, Mom's weekend, Dad's weekend, Graduation, etc. 

Best of Luck! 

@Brent Mowery

Hey Brent, welcome to BP and congrats on starting your education in REI. We have a pretty health community of BP members in the Champaign / Urbana area and I will be putting together a information meetup here in the next couple weeks which would be a great way for you to get to know some of the local investors. I will be sure to include you on the meetup post and hope to see you there.

Best of Luck!

@Chang Hee Lee

Curious if this is a student rental?  If so, are all the units leased for the 2017-2018 school year?  There is a good amount of competition nowadays in the campus town area with all the new units built over the last 5 years and if you don't already have leases on all the units you could be looking at some vacancy for the first year of ownership.  In addition there is a high likelihood of considerable differed maintenance (roof, plumbing, electrical, exterior, etc.) which eventually will need to be addressed and will drive up your capital expenditures.  Just looking at this deal at a very high level without digging too deep I don't love the numbers you have presented for the Champaign/Urbana market.   Best of Luck!

Hey @Kyle Williams

Welcome to BP and welcome to the Champagin / Urbana area.  Keep a look out for a Central Illinois meetup usually hosted on the west side of Champaign a couple times a year.  You can expect to see a Meetup posted on BP towards the end of Jan / start of Feb.  In addition there is a group in town called CIRPP which serves as our local REI group. They have 2 events per month and you will find investors of all sizes, Agents, Lenders, and other vendors participating. Congrats on getting rolling in REI and reach out if you have any questions about the local market.

Best of Luck,

Scott Dixon 

Hi @Travis Zappia

This is going to depend on your specific market.  You will want to do a little homework and talk to several students and property managers that handle student rentals in your area.  For my market students have traditionally locked into the next school year lease usually 8-10 months ahead.  For example I have 3 units which are student rentals and 2 of the 3 already have signed leases to begin in Aug 2017.  This can also depend on the number of bedrooms but again will depend on your specific market.

If students sign well ahead of the lease start date in your market this can often stretch out the time between the purchase date and when everything is stabilized with the new higher rent rates after rehab.  

Best of Luck

Scott

Hey @Robert Richardson

Might be good for you to reach out to a couple of the local Peoria Investors (Use the "find members" link under the Community tab) to get their take on Peoria Heights area.  I have a duplex in the Peoria area but have not actively been buying so don't have any deal flow now to send your way.  Do keep in mind that Caterpillar is the largest local employer and is in the bottom of a cycle and as such a good number of local employees have been laid off over the past coupe of years.  Brights side:  You might be able to buy without much competition.  Are you planning of managing remotely or getting a property manager to handle the day-to-day?

Best of Luck,

Scott Dixon 

Hey @Max Householder

All good points and from a high level I think we can all agree that the growth in student debt is not sustainable and something has to give.  Currently I only invest in the University of Illinois area (Urbana/Champaign) and even though the state is a mess in terms of budget the University has strong roots as a top public institution.  There are significant head winds in both student loans and online learning platforms that will continue to pressure Universities to adapt and focus on providing value to students.  Honestly I am looking for our market in Champaign / Urbana to continue to build a strong research park that connects academia to industry.  The U of I Research Park is growing at a steady rate and is positioned well to become a formidable hub for the advancement of Big Data in Agricultural.  

I personally will not invest in University areas which don't have some type of world class College or Department that will help to ensure strong student demand for the foreseeable future.  I know in Illinois smaller schools are in a very tough situation with the lack of state funding and absolutely could fail in the next couple years.  This is a real issue and should be taken very seriously by any investors looking to get involved in such markets.  In addition many markets including ours have been overbuilt in the higher-end student rentals with significant competition and what I would consider to be unacceptable vacancy rates.   

I guess only time will tell but would echo your points on "Buyer Beware" in the student rental markets.  

All the Best

Scott Dixon

Hey @Pat McCandless

I have a triplex which is a couple blocks from the UIUC in Champaign, IL and have had the property for 5 years now.  When I bought the property it was an ugly duckling, to say the least.  Over the past 5 years I have continued to improve the property both on the exterior and interior of each unit.  In addition I added amenities like in-unit laundry which are what a lot of the students in our area expect for a rental.  Through the improvements in the property I have been able to raise the rent by over 40% during the time I have own the property.  So, my advise would be to look for a property which have upside whether that is from mismanagement, below market rents, deferred maintenance, or opportunity to add amenities.  I would caution you that proximity to campus is not enough to indicate the property would be a good student rental, some of the closes areas to campuses are not always the hot areas for student rentals and every campus will be different.  Do your homework and talk to current students to ensure you are buying in the right spot which will have demand.  I Don't have many horror stories but that is probably because the students know I own, manage, and keep a pretty close eye on the property.  I am quick to respond to their needs and show the students I have pride in my units and in turn they usually respect the property.  Another benefit I am enjoying is students as expected have no issue with technology so they have no problem using technology like cozy.co, text, or venmo which makes things easier to manage.  

Best of Luck

Scott Dixon

Just a reminder to anyone in the Central Illinois area:  Bloomington, Peoria, Champaign, Urbana, Decatur, Danville, or any small town in between that we will be meeting up tonight.  Great chance to hang out in a relaxed environment and meet some people with similar interests and mindset.  Hope to see you tonight.