Multi Family Deal Working Right Now

8 Replies

Hello Everyone,

I'm considering a deal that is with an owner finance structure for a multifamily dwelling. The investment will feature an eight room 1 bath that situated between two big colleges here in Augusta, Georgia. Currently the deal is structured as follows:

Price: $42,000

Down Payment: $4500.00

@ 4.5% with a 5 year balloon.

How would you guys structure this deal and if I am catering to students how would you structure the rent amounts and etc.? 

Is it currently being used and set up as an apartment? 8 bed, 1 bath? If so, what is the occupancy, and what are the current rents? Any deferred maintenance? This doesn't sound like a property college students would live at. Most want their own bathroom. 

Josh,

Thanks for the reply. Its just a big single family home I guess you could say, with four rooms on each side of the house. That's a great point with the bathroom situation but I remember staying in a setup like this when I was at Georgia Southern for a year. The sharing bathroom sucked but whoever owned the home was making a profit for sure. It was all guys in the house so the sharing a restroom was not too bad.

8 beds and 1 bath sound like a rough situation no matter how you are renting it, whether to a family or students, or anyone.  If you are going to structure it at all to benefit yourself, get the lowest payment possible because properties like this are likely to have high turn-over. If you know the area and you know there are lots of other situations like this with too many beds and not enough baths, then you know the tenants will be understanding, because that's just the way it is in this neighborhood.  Would this place even rent to college students?  Just because it's near a college doesnt have anything to do with students renting.  I am speaking from my experience with Athens, GA.  

Or if you are owner-financing it, and truly taking ownership, turn a bed into a couple baths.  6 beds and 3 baths should rent easier and a much better ratio of people per bath.  

You'd need to check with the city to see if they allow eight non-family members to live in the same house. Most communities will not allow that. 

And let's be serious about the one bath situation. Can you imagine what that thing is going to look like on the Saturday morning after the beer pong tournament?

Nothing significant to add but in UC Berkeley area a unit with a 4 to 1 ratio was tight enough. Those had sinks in the small rooms as well. Lots of turnover would be the norm. As they become junior/ seniors they will likely move on if not sooner.




Originally posted by @Ethan Atkinson :

8 beds and 1 bath sound like a rough situation no matter how you are renting it, whether to a family or students, or anyone.  If you are going to structure it at all to benefit yourself, get the lowest payment possible because properties like this are likely to have high turn-over. If you know the area and you know there are lots of other situations like this with too many beds and not enough baths, then you know the tenants will be understanding, because that's just the way it is in this neighborhood.  Would this place even rent to college students?  Just because it's near a college doesnt have anything to do with students renting.  I am speaking from my experience with Athens, GA.  

Or if you are owner-financing it, and truly taking ownership, turn a bed into a couple baths.  6 beds and 3 baths should rent easier and a much better ratio of people per bath.