All Forum Posts by: Account Closed

Hi Emily,

I have a student rental in a college town 10 minutes from my house. I love student rentals but there certainly are pitfalls.

Pros:

- I have had zero vacancy (100% occupancy) every single year I've owned it.

- Properties rent on a per bedroom rate, typically its higher but I can't speak to all markets

- The student market I'm in signs leases in September for a June 1st move in date. Lots of time to get them rented again

- I have found students to be very respectful and always paying on time. I think that's property and location specific however. I also make an effort to be a resource for their parents if they are in the picture or are paying.

Cons:

- They're typically clueless on easy fixes such as light bulbs, tripped electrical circuits, and they leave windows open with the heat on. You've got baby them with these sorts of things and be prepared to hear from their parents before you even know about the issue. Make procedures very clear from the beginning

- If you inherit a group of partiers, prepare for damage

- Expect annual turnover with new students - if you're paying out leasing fees that gets costly in a hurry

Lastly, there's a landlord association with our college town - see if there's one for you and start going!

@Seth Williams advice is on point from my experience, they'll just assume you're doing 80/20 or 75/25 to maximize cashflow, DSCR and CCR are inversely related, but I don't think it's an absolute inverse relationship.

@Jim Growfer I've had bad luck telling broker's specific metrics such as "I want an 8% cap rate" or "10% cash on cash return" because they'll just fudge their vacancy or maintenance or some other line item to compute those terms. 

So instead, I tell them property specifics: pitched roof, 1980s or newer, separate entrances, separate utilities - things that will likely paint a picture to be a good property to own and then I simply analyze based off of the T12 (with rent roll to corroborate their story) and offer accordingly.

Interesting question - I run into this trouble too.. what you need broker's to send you is legitimate Trailing 12's (T12s) and a Rent Roll and you need to know your market's cap rate. I also have that same DSCR requirement but I don't bother telling broker's.. just my lender.

7k is an awesome number! I would agree, I think MF is your best bet to scale. Just remember, life's too short to own C class properties!

@Jide Alufa typically rent to value is my first quick analysis on where a market lands. RtV is below 1 in my market but in the SFR markets I'm in they're above 1.

What are your goals exactly? I think if we know what you want to achieve we can reverse engineer your ideal "path"

@Justin Kane makes a really good point on the scalability of the larger MF game. 

I think this is an eternal debate... Most of us have limited capital so we making these choices aren't easy but my suggestion is do both. It depends on the market, in my home area I can't justify single family rentals but MF's work... however I've invested in single families in markets where the MF's scared me. 

@Peter Bogdon I gotta say one more thing - there's another popular thread out there right now of someone thinking of leaving college to go full time RE. Don't do that, get your degree and get something from school - we're so deep into this "bull market" a time is going to come to buy tons and tons of properties but it just isn't right now. You can still find and buy great deals, but proceed cautiously. 

I actually did begin investing first, I may be an outlier on that because I left college with no debt, so I was able to acquire a property relatively easily. It was a foreclosure actually, so I fixed it almost entirely by myself and then refinanced it to buy more properties. 

Being an agent can make it easier to find good deals and acquire more properties. I'd say it is more of what you make it however. Many non-agents are sending direct mail, calling property owners, and doing the same job a real estate agent should be doing - but they're looking to buy the property, not broker it to someone else. 

Does that make sense?

Hi Peter,

For starters, welcome! Getting a RE Salesperson license can be very beneficial. Being an agent is often people's first foray into the real estate world. It is a great start, I think I would encourage it and you'll have the opportunity to learn from seasoned professionals and begin shaping your own path in this industry. Especially being in college, obtaining your sales license is an excellent side hustle - I have one friend who bought a 4 unit in his college town and lived it for school... making cashflow the whole way! In terms of actually obtaining your license, every state is different but typically you take a certified RE course sanctioned by your state, then you proceed to take the Federal/State exams and become a licensed agent.. then you go find a broker/brokerage to work for. 

With that said, getting a RE license isn't the end all be all. It is a means to an end. For instance, I'm a licensed agent and take the sales commissions and management fees to buy more properties.. ultimately I want to own and operate my portfolio of properties' and not be a licensed agent at all.

@Nick Quarandillo

Coming from someone who completed college and immediately parachuted into real estate I get it. College seems like a waste. Personally I learned so much from college with regards to social connections, good writing/communication skills, and I walked away with friends for a lifetime. 

I think it would be foolish to leave school - finish school and start getting into real estate NOW. Go get a license or intern at a brokerage or a property management company. Get some exposure in the industry now so you can shape what YOUR goals are then get on the path that leads to them.

Please don't hesitate to message me, I'm only a few years out of school so I understand your perspective. Anyone who's more than a few years out of college simply won't understand your perspective.