All Forum Posts by: Nick Ferguson

And Yes, to answer your question more directly, it was on the MLS. But my realtor found it, not me.

@Colin Simpson Doing a live-in flip was not something I was comfortable with because I can do basic things like painting, connecting some PVC pipes, etc. but not any real contractor work.  If you're comfortable with that, I think it's a great option to have a hobby, learn a lot, and get a great investment.  

I just found it by getting a realtor and telling her that I was in the market for a 30-40k house and telling her my goals to live in with roommates and then rent out once I moved. She did a great job at showing me my options and guiding me through the HUD/rehab process.

@Colin Simpson .  I kind of faced this dilemma myself a few years ago.  While I was interested in real estate, I wasn't "positive" I wanted to do it just yet.  I had just graduated, was living with my parents, and driving over an hour to work each day so I decided I would move closer to my job. 

I was going to rent but when I saw how much rent was in the area (600-800 for a 1 bed apartment, 800-1000 for a 3/2 not-so-nice house) and how cheap houses were to purchase (30-70k for a not-so-nice to moderately nice 3/2 house) I decided to just buy.  Also, waiting lists for apartments were like 6 months despite them being over-priced compared to what a mortgage would be.  

Here is where I had an opportunity, and you may as well. Because I was a first-time buyer, I was eligible for the FHA 203k rehab loan (which to my knowledge, there is really nothing exactly like it available to investors). I was able to find a 4 bedroom, 2 bath, 1700 sq. ft. house that is gorgeous and has a 2 car garage and is about 1 mile from the local college. The house was a HUD house and was vacant. All of the copper had been stripped and a couple walls torn up. Long story short, because the 203k loan rolls rehab costs into the mortgage, I was able to get out the door with a 52k loan (about 25k purchase and 25k rehab) and the house appraised for 76k when all said and done.

I immediately moved into the house and just put the word out through friends that I was looking for roommates. I ended up getting 3 roommates and collecting $900/month in rent while only paying $575/month mortgage plus utilities. So I basically lived for free. And since with FHA, you only have to put down 3.5%, after closing costs and down payment, my initial investment was around $5k I think. I lived there for 2 years and now I've moved and I still have a $575/month mortgage but I have 5 people in there (one of the non-bedrooms I put a stand-alone closet in and call it a 5th bedroom) paying $1150 per month. It doesn't quite meet the 50% rule but I'm paying it off in 15 years instead of 30 and I could always re-fi or get a HELOC to get some of my cash out if a major expense like a roof or something popped up.

Sorry for the long post and all the round/estimated numbers but I was so young and didn't have a clue what I was doing so I don't have them saved anywhere readily accessible. I did nothing right from an investing business perspective on this one but I bought it for such a good price that it still works despite me not knowing what I was doing 5 years ago. Depending on the market where you are, and whether you can find a great deal on a HUD/203k, that may be an option that is available to you (like it was me) that isn't available to most investors.

5/3 bank does 203k's @ 3.5% down and they're pretty good to work with during the financing process.  Don't make them your regular bank though.  They aren't so good at that, but financing was no sweat. 

 It sounds like your agent is not very well informed and you might need to consider seeking another one.  If you know the right answer this obviously won't hurt you, but if he/she doesn't know something simple like this, what else might he/she miss that could cost you money in a deal? 

@Kim Younkin ... Thank you for the advice.  I think that that's a good way to explain it to them.  Hopefully they'll be honest and up front about it in the beginning.  It's actually in Portsmouth, Ohio which has Shawnee State.  Not a big school but definitely has a market for college kids and much cheaper to purchase than in Athens. 

Hey guys,

I have a house that I'm land-lording from afar (about a 5 hour drive).  It is a large house, near a college with flexible accommodations for up to 5.  My pricing structure is that I charge more for rent for each extra person in the house but they also save money per person with each person in the house.  I charge 900/month for 3 people, 1000/month for 4, and 1150/month for 5.  

Unfortunately, this is a small town with no real options for property management (although I'm looking into grooming someone to do a partial management situation).  The house is a good performing financially and my ultimate goals are to keep the money flowing and not have my property destroyed by college kids.  

There are currently 4 people on the lease resulting in a total of $1,000/month.  However, when the money is deposited directly into my bank, it has been with separate deposits of $200 or $400 dollars so I'm pretty sure there is an extra person who is living there.  

How would you guys handle this situation? On the one hand, the rent has been coming in, I don't want to jeopardize that, and I am too far away to realistically "swing by" or something to check.  On the other hand, there is more wear and tear on the house with an extra person, I'm missing out on potential money revenue, and I'm not sure what additional liability this places on me? 

Thanks, 

Nick

Thank you all.  I've already found this site very useful. 

Thank you @Don Young.  I cannot attend tonight but will keep that on my radar for the coming months. 

I currently live in the Cleveland Akron area of Ohio.  Formerly in Portsmouth, Ohio where I bought my first property.

I lived in that property for nearly nothing while charging my roommates rent and now rent that house to college students.  I'm now 4-5 hours away with no property management in the area so that is nerve racking but it has not been a bad experience. 

I'd like to begin investing in the Northeast Ohio Market within the next year and I am trying to network and learn as much as possible about the area and the business aspects first.