All Forum Posts by: Robert Lindsley

@Kyle Scofield - That's great to hear!  Thanks a ton for looking at this and giving me your thoughts.

I agree with your equity point and I'm thinking of taking the first few months of cash flow and paying more of the loan down to gain equity quickly.

I'll be going after private/hard money for this loan.  Do you think 10% is about the right number or is there a different number I should be using?

Thanks!
Robert.

Hi @Kyle Scofield.  Thanks for your thoughts.

I'll add CapEx to the equation. Good call - and yes, college students are not the best caretakers. The current owner told me that 10 years ago he rented it to a fraternity and it was a disaster! I did add a high maintenance percentage to cover any direct damage.

As part of the town rules there needs to be an onsite property manager.  My plan is to charge one student 50% of the rent to take care of the basics (lost keys, plugged toilets, etc).  Bigger stuff would escalate to me and I'd get the handyman out.

The house is one house with 15 bedrooms -- there's one kitchen, one living room.  Utilities are not separated and would be paid by me (and are included in the costs).

For garbage, there is a pre-existing deal with the college house across the street.  They pay for the trash service but the dumpster is on my property.  In exchange my tenants get to use their laundry room.

Thanks!
Robert.

Yes, insurance and tax are calculated into the costs.  I'll update the post to note that.

Hi there!

I'm thinking about buying a college house and wanted to verify it's a good deal and it could get financing. My biggest concern is that the property is not being offered at a discount -- it's being sold at market rate. Hopefully the ROI will counter that and let me build equity quickly.

Here are the details:

$319k (with an ARV of $319k)
15 bed / 6 bath
Gross rent: $9050/month
Mortgage: $2799.45 (100% financing at 10%)
Total Operating Expense $3849.33/month (Maintenance 17%, Vacancy 7%, tax and insurance included)
Monthly Cashflow: $2401.21

If you have any thoughts on this property, I'd love to hear them.  I've never bought a college house before, but at first glance the numbers seem to be great.

Thanks!
Robert.

I'm also thinking about buying a student house in the New Hampshire area.  I'd love to get more info on insurance if you don't mind.  It's a 15 bed/6 bath and can legally have 16 renters.  Thanks a ton!

@Edward Rhoads Thanks for your insights!  I'm in the process of talking to a few wholesalers and hope to have some leads soon.  I'm also planning a trip to Indianapolis in the next couple of weeks so I can check out areas and potential properties before I invest.

@Paul Timmins Great advice! Thanks very much. I've been to a local Boston REIA once -- they were doing an onsite case study for a flip which was amazing. http://bostonareia.com.  I definitely need to go to more meetings to continue networking.

In addition to that I've been taking training for almost a year and have a coach I'm working with, along with access to all the private money I need -- the big caveat is that the deal has to make sense (65% of ARV minus repairs). So for me right now they key is finding the right deal in the right area.

I'm definitely going to reach out to @mike hurney and @justin silverio.  Thanks for the mentions.  Also thanks for the book recommendations.  I just finished reading The Millionaire Real Estate Investor by Gary Keller and I'm now reading a Biggerpockets book The Book on Investing in Real Estate with No (and Low) Money Down.  I'll put your recommendations on my list next.

Thanks a ton for your help!
Robert.

@Nadine Lajoie Can you share what software you're using?  I use Freedomsoft to analyze my deals but it's not very automated.  I'd love to find a quicker way!

@James Wise  Thanks!  I'm psyched to jump in.

@Jay Hinrichs Thanks a ton for your thoughts on this!  I've been looking for some perspective and I really appreciate yours.  I've never purchased a buy & hold, let alone one that's a thousand miles away from where I live.  I basically have $50k cash that I can invest, and this had seemed like a great option.

I'm assuming (probably incorrectly) that once I purchase the property, Morris is out of the picture and I'm working with the property management company.  If the property manager can handle finding the right tenants and dealing with evictions, etc, wouldn't that plus a home warranty basically cover anything that may come up?

Also, I'm not sure about the area.  If it's a B- or C+ I'd be ok investing there, but I definitely don't want to be investing in a war zone.  I'm almost thinking I should take a trip out there to check out the neighborhoods!

Thanks again for all your thoughts and help with this!

Robert.